Mercer Consumer, a service of Mercer Health & Benefits Administration LLC AFFORDABLE CARE ACT WHAT IT MEANS FOR YOU New York City Bar Association Presentation

Mercer Consumer, a service of Mercer Health & Benefits Administration LLC

AFFORDABLE CARE ACT WHAT IT MEANS FOR YOUNew York City Bar Association PresentationFebruary, 2014

Mercer Consumer, a service of Mercer Health & Benefits Administration LLCConfidential and ProprietaryCopyright 2014 Mercer LLC. All rights reserved.

Today’s Speakers

Frank W. Blackwell, Relationship Manager, Mercer ConsumerFrank has worked with thousands of individuals and businesses on their life, health and disability insurance plans. His Association experience includes member and member firms of the State Bar of California, the California Medical Association, the California Pharmacists Association, the California Optometric Association and now the New York City Bar Association.

Michelle Black, Sr. Associate, Client Services Manager, Mercer ConsumerMichelle brings over 20 years of insurance management experience to her role of administering the Sponsored Life, Health, and Disability Insurance Programs of the New York City Bar Association, the State Bar of California, the New York County Medical Society, the California Medical Association, the California Pharmacists Association, and the California Optometric Association. .

Gregory Trotta, Account Executive, Empire Blue Cross Blue ShieldGregory manages relationships with key national brokerages and general agents. He consults on various aspects of the healthcare industry including: underwriting and participation requirements; corporate, administrative and clinical policies, and healthcare reform. Gregory earned his juris doctorate degree from Villanova University School of Law

Nicholas Hellmuth, Small Business Account Consultant, United Healthcare

Nick is a small business sales representative for UnitedHealthcare in NY. He manages relationships with brokers and General Agents on a local and national level assisting with the sale, service and retention of accounts .Nick graduated from The Villanova University School of Business and is licensed in Accident, Life, and Health insurance in the state of NY.


ACA - What It Means For YouAgenda

Discussion Topics for Today

1 Individual Mandate

2 Tax Credits

3 New York State of Health – Individual and Small Business (SHOP)

4 Sponsored Plans of the Bar

5 Oxford and Empire Blue Cross Blue Shield

6 Questions

1 ACA What It Means For YouIndividual Mandate


Everyone has to have

Minimum Essential CoverageBy April 1, 2014

Or

Pay a Penalty

Failure to Pay Penalty

Taxpayers who are required to pay a penalty but fail to do so will receive a notice from InternalRevenue Service (IRS) stating that they owe the penalty. If they still do not pay the penalty, the

IRS can attempt to collect the funds by reducing the amount of their tax refund in the future.However, individuals who fail to pay the penalty will not be subject to any criminal prosecution

or penalty for such failure. (Congressional Research Service 7-5700)

ACA - What It Means For YouIndividual Mandate


Minimum Essential Coverage

Coverage Under a Government-Sponsored Plan including:

Medicare Part AMedicare Advantage Plans

Medicaid State Children’s Health Insurance Program (CHIP)

TRICARE and the TRICARE for Life programDepartment of Veterans Affairs (VA) Health Care Program

Peace Corps Program

Employer-Sponsored Plans with respect to any employee including:

Coverage offered by an employer which is a government plan.Any other plan or coverage offered in the small or large group market.

Any plan established by an Indian Tribal government.




Minimum Essential Coverage (continued)

Plans in the Individual Market

Grandfathered Health Plans

Self-funded Student Health Plans

Refugee Medical Assistance supported by the Administration for Children and Families

State Health Benefits Risk Pool

Any other coverage the HHS Secretary recognizes as meeting the requirements outlined in 45 CFR §156.604.


Minimum Essential Coverage must include

Essential Benefits:

Emergency Services

Hospitalization

Maternity and Newborn Care

Mental Health/Substance Abuse Treatments

Prescription Drugs

Rehabilitative Services

Laboratory Services

Preventive/Wellness Services

Pediatric Dental and Vision

8




PENALTY

The penalty will be calculated as the greater of either:

A percentage of the “applicable income,” defined as the amount by which anindividual’s household income exceeds the applicable filing threshold for theapplicable tax year. The filing threshold comprises the personal exemptionamount plus the standard deduction amount.

The percentage will be: 1.0% in 2014, 2.0% in 2015, and 2.5% thereafter

OR



PENALTY (continued)

A flat dollar amount assessed on each taxpayer and any dependents

$ 95 in 2014

$325 in 2015

$695 in 2016 and beyond (adjusted for inflation)

The amount is reduced by one-half for dependents under the age of 18.

The total family penalty is capped at 300% of the annual flat dollar amount.



Exemptions From Tax Penalty

Religious (1402(g)(1) of the Internal Revenue Code of 1986)

Undocumented / Not a Citizen

Incarcerated

Cannot afford to purchase (e.g. contribution exceeds 8% of income)

Gap in coverage of less than 3 months

Native Americans

Income below tax filing thresholds

2 ACA What It Means For YouTax Credits


ACA - What It Means For YouTax Credits

Tax Credits = Financial Support through the New York State of Health

Individuals and Families

Subsidies (premium credits)

Taxpayers with incomes between 138% and 400% of the Federal Poverty Level

Sliding scale of tax credits paid directly to insurers to help pay for the insurance



Tax Credits = Financial Support through the New York State of Health

Individual and Families

Credit calculation based on the second lowest cost silver plan offered, but the dollar amount is applied to all available plans

Available for Household incomes between 138% and 400% of the federal poverty level (FPL) (max: $45,960 for individuals and up to $94,200 for a family of 4)

May apply for some or all of the credit at time of application



Individual and family eligibility

Must not have access to Affordable and Minimum Essential Coverage through an employer

Affordable is defined as employee contribution towards employer health plan costing less than 9.5% of the employee’s wages from that employer

Somewhat discriminatory against dependents not subsidized by employer plans

Must be a U.S. citizen or a legal resident

Subsidy Estimator

NYStateOfHealth.NY.gov/PremiumEstimator



Federal Poverty Levels

Persons in Family/Household

Poverty Guideline

1 $11,670

2 15,730

3 19,790

4 23,850

5 27,910

6 31,970

7 36,030

8 40,090



• Premium required to pay cannot exceed these amounts

Income Level Premium as a % of income130% - 150% FPL 3% - 4%150% -200% FPL 4% - 6.3%200% - 250% FPL 6.3% - 8.05%250% - 300% FPL 8.05% - 9.5%300% - 400% FPL 9.50%

For example:• Married couple with 2 children earning $47,100 annually (200% FPL)• Annual premium for second lowest cost silver plan is $10,000 annually• Tax credit equals $10,000 minus $2,968 (6.3% of $47,100)

$7,032 premium tax credit $2,968 premium payment



Employer Tax Credit - 2014

Partial Credit available to Small Business with 50 lives and under who:– Provide at least 50% of the cost of health care coverage– Employ less than 25 full-time employees (excludes business owners and family

members)– Paying annual wages averaging less than $50,000 per FT employee

Maximum Credit for tax years 2014 and beyond:– For employers with ten or fewer full-time employees and average annual wages

below $25,000 For Profit - 50% of Employer contribution for employees Tax-Exempt - 35% of Employer contribution for employees



Employer Tax Credit – 2014From the IRS questions and answers about the Credit…

Q. Who is an employee for purposes of determining FTEs and average annual wages?

The following individuals are not considered employees for purposes of the credit:

Owners of the small business; such as sole proprietors, partners, shareholders owning more than 2% of an S Corporation or more than 5% of a C Corporation

Spouses of these owners; and family members of these owners, which include a child, grandchild, sibling or step-sibling, parent or ancestor of a parent, a step-parent, niece or nephew, aunt or uncle, son-in-law or daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law. A spouse of any of these family members should also not be counted as an employee.

3 ACA What It Means For YouNew York State of Health exchange


Benchmark New York Plan:

Oxford EPO small group planAdded missing Essential Benefits

Became the basis to establish actuarial value

Exchange Goals:

Cover many of the 2.7M uninsured under 65 (16%)

Create a platform where plan benefits could be more easily compared

21

ACA - What It Means For YouNew York State of Health

Platinum

Gold

Silver

Bronze

• Plan pays 90%• Enrollee pays 10%






Small Business Health Options Program

SHOP tax credits available to firms that:

Employ fewer than 25 full-time employees (excludes business owners and family members)

Pay annual wages averaging less than $50,000 per full-time employee

Maximum credit for tax years 2014 and beyond:

For employers with ten or less full-time employees and averages annual wages below $25,000

For Profit — 50% of ER contribution

Tax-Exempt — 35% of ER contrib

22

Platinum

Gold

Silver

Bronze







Type of Service Platinum Gold Silver Bronze CatastrophicDeductible $0 600$ 2,000$ 3,000$ 6,350$ Max. OOP 2,000$ 4,000$ 5,500$ 6,350$ 6,350$ Cost Sharing Inpatient Hosp, SNF, Hospice $500 per adm. $1,000 per adm. $1,500 per adm. 50% co-ins 0% co-ins Outpatient Facility -surgery $100 $100 $100 50% co-ins 0% co-ins Surgeon $100 $100 $100 50% co-ins 0% co-ins PCP $15 $25 $30 50% co-ins 0% co-ins Specialist $35 $40 $50 50% co-ins 0% co-ins Prescription Drugs $10/$30/$60 $10/$35/$70 $10/$35/$70 $10/$35/$70 0% co-ins Mail order (90 day supply) 2.5 times 2.5 times 2.5 times 2.5 times na Rehab & Hab Therapy $25 $30 $30 50% co-ins 0% co-ins ER $100 $150 $150 50% co-ins 0% co-ins Ambulance $100 $150 $150 50% co-ins 0% co-ins Urgent Care $55 $60 $70 50% co-ins 0% co-ins DME /Med Supplies 10% co-ins 20% co-ins 30% co-ins 50% co-ins 0% co-ins Eyewear, Hearing Aids 10% co-ins 20% co-ins 30% co-ins 50% co-ins 0% co-ins Pre-adm testing 0% copay 0% copay 0% copay 50% co-ins 0% co-ins Diag, x-ray, Imaging, lab $35 $40 $50 50% co-ins 0% co-ins Chemo, radiation, $15 $25 $30 50% co-ins 0% co-ins Mental Health $15 $25 $30 50% co-ins 0% co-ins



SHOP Exchange

MetroPlus Health PlanBronze, Silver, Gold, Platinum

1 HMO plan at each level

Health RepublicBronze (2), Silver (3), Gold (2), Platinum (2)

EPO Plans

OxfordBronze (1 EPO plan)

Silver (2: EPO,PPO plans)Gold (1 EPO plan)

Platinum (2: EPO,PPO)



Category Example 4Number of adults 2Children ages 19-25 1Children under 19 1Family Type Ind w FamAnnual taxable income 95,000$ Percent of FPL Exceeds 400%Estimated Subsidy -$

Subsidized Premium For AdultsFor Children under 19 Total Cost

Affinity 1,259.16$ Full Cost 1,259.16$ Emblem 1,098.13$ Full Cost 1,098.13$ Empire 1,250.72$ Full Cost 1,250.72$ Fidelis 1,111.93$ Full Cost 1,111.93$ Health Republic 1,104.15$ Full Cost 1,104.15$ Health First 1,254.00$ Full Cost 1,254.00$ Metro Plus 1,023.89$ Full Cost 1,023.89$ Oscar 1,195.32$ Full Cost 1,195.32$ United 1,830.93$ Full Cost 1,830.93$



Category Example 3Number of adults 2Children ages 19-25 1Children under 19 1Family Type Ind W FamilyAnnual taxable income 50,000$ Percent of FPL 322%Estimated Subsidy 645.21$

Subsidized Premium For Adults For Children under 19 Total Cost

Affinity 613.94$ 45.00$ 658.94$ Emblem 452.92$ 45.00$ 497.92$ Empire 605.51$ 45.00$ 650.51$ Fidelis 466.71$ 45.00$ 511.71$ Health Republic 458.93$ 45.00$ 503.93$ Health First 608.79$ 45.00$ 653.79$ Metro Plus 378.68$ 45.00$ 423.68$ Oscar 550.10$ 45.00$ 595.10$ United 1,185.71$ 45.00$ 1,230.71$


Sole Proprietors

Consistent with federal requirements, sole proprietors will purchase coverage through the Individual Exchange. There are nearly 1.1 million sole proprietors in the State of New York, of which 23% are uninsured and 14% are insured in the nongroup market (Artifact 6.1.6). Twenty-three percent of sole proprietors have income below 139% of FPL and 34% of sole proprietors have incomes between 139-399% of FPL and would be income-eligible for Insurance Affordability Programs when available in 2014. Consequently, the Individual Exchange will enable these sole proprietors to access affordable, comprehensive health insurance.

Blueprint Summary for Section 6.0 SHOP, NY.Gov

October 26, 2012

ACA - What It Means For YouNew York State Of Health Exchange

4 ACA What It Means For YouCity Bar Sponsored Health Plans

This document and any recommendations, analysis, or advice provided by Mercer Consumer, a service of Mercer Health & Benefits Administration LLC (Mercer Consumer) (collectively, the “Mercer Consumer Analysis”) are intended solely for the entity identified as the recipient herein (“you”). This document contains proprietary, confidential information of Mercer Consumer and may not be shared with any third party, including other insurance producers, without Mercer Consumer’s prior written consent. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modeling, analytics, or projections are subject to inherent uncertainty, and the Mercer Consumer Analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Except as may be set forth in an agreement between you and Mercer Consumer, Mercer Consumer shall have no obligation to update the Mercer Consumer Analysis and shall have no liability to you or any other party with regard to the Mercer Consumer Analysis or to any services provided by a third party to you or Mercer Consumer. Mercer Consumer makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or reinsurers. Mercer Consumer makes no assurances regarding the availability, cost, or terms of insurance coverage.

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Mercer Consumer, a service of Mercer Health & Benefits Administration LLC AFFORDABLE CARE ACT WHAT IT MEANS FOR YOU New York City Bar Association Presentation