Cracking the Code: Healthcare Reform What I need to know as an individual agent.
eBook Individual products
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Contents
Six Major Changes to Date 1. Dependent Care
2
2. Rescissions & Appeals
3
3. Preventive Services
4
4. Grandfathered Plans
5
5. Removal of Limits
6
6. Patient Protections
7
Hot Topics in Health Reform Medical Loss Ratio Rebates
9
Women’s Preventive Services
10
Summary of Benefits & Coverage
11
Essential Health Benefits
12
Impacts to Premiums in 2014
13
Individual Mandate
14
Exchanges (What we know) Plans on the Exchange
16
Exchange Timeline
17
Your Book of Business
18
Financial Assistance Available on the Exchange
19-21
Contact
22
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Six Major Changes to Date
This information is only a high-level summary of certain provisions of the health care reform law. This information does NOT attempt to summarize all provisions of the health care reform law. This information is NOT and should NOT be used as legal or tax advice; it should NOT be used as a basis for decisions on how the health care reform law will affect you and/or your business. Should you have any questions on how the health care reform law (including the high level summary of certain provisions of health care reform) will affect you and/or your business, you should seek professional advice from attorneys or other advisors.
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1
1. Dependent Care
What does this mean to you?
What happened? 1. Young adults can stay on their parent’s plan until
their 26th birthday.
• They don’t need to be enrolled in school • Regardless of dependent’s marital status • They don’t need to live with their parents
or be financially dependent on them.
2. The law provides that kids under age 19 can get
coverage regardless of pre-existing conditions. • And as you probably know, Humana and
several other carriers do not have child-only policies. Your clients need to apply during the enrollment period if your state offers this.
• Educate clients on coverage options for their entire family. • Inform clients that kids under age 19 can get coverage – even with pre-existing conditions*. • Alert clients when their dependents are about to age off their plan and what their options are.
Free fact sheet: Young Adults and ACA
*Issuers may restrict enrollment of children under age 19, whether in family or individual coverage, to specific open enrollment periods if allowed under State law.
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2. Rescissions and Appeals
What happened?
What does this mean to you?
Rescissions • Health insurance issuers cannot cancel someone’s
coverage (except in the case of fraud or an intentional misrepresentation).
Appeals • It is now federally mandated that the insured has the
right to appeal decisions made by their health plan to an outside, independent decision maker.
• Explain the importance of clients providing truthful information at the time of application. • Understand the process for helping clients through the external appeals process.
Free resource:
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3. Preventive Services
What happened? • All policies must cover certain in-network preventive
What does this mean to you?
services at 100%. Applies to new plans beginning on or after Sept. 23, 2010.
• No co-pays, co-insurance or deductible when services
are provided in-network.
What’s Covered (examples) • Immunizations • Flu shots • Blood pressure and cholesterol screenings • Mammograms and colonoscopies
• Type II diabetes screening • Obesity screening and counseling • Tobacco use screening
• Educate clients about which services are covered at 100%. • Highlight these services in your marketing initiatives. • Use the 100% covered services as a talking point throughout the year.
Free resource:
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4. Grandfathered Plans What happened? Clients who are currently on a plan that existed on March 23, 2010 (the day the law was enacted) are exempt from some of the new consumer protections.
Clients WILL NOT receive: • 100% preventive services (as implemented with ACA). • “essential health benefits” required in 2014.
What does this mean to you?
Clients WILL receive: • no lifetime limits on coverage for all plans. • no rescissions of coverage except in the case of fraud
or intentional misrepresentation.
A plan CANNOT lose grandfathered status if the insurer: • adds new benefits. • makes modest adjustments to existing benefits. • voluntarily adopts new consumer protections
under the new law. • makes changes to comply with State or Federal laws. • changes premiums.
The insured themselves can also make certain plan changes allowed by their policy without losing grandfathered status, like an increase in deductible.
• Find out which of your clients have a “Grandfathered Plan.” • Familiarize yourself with the differences between grandfathered and non-grandfathered plans. • Alert clients when they may be impacted due to a plan change.
Free resource:
In addition to changes by the insurer, there are also changes the insured themselves can make without losing grandfathered status. Members may retain grandfathered status if they make a plan change allowed by their policy (example: an increase in deductible).
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5. Removal of Limits
What happened? Lifetime Limits • There is no longer a cap on coverage
What does this mean to you?
for “essential health benefits” like doctors’ office visits and hospital stays.
Annual Limits • Annual limits will be phased out over
the next three years until 2014, when they will be prohibited. This prohibits annual dollar limits on essential benefits for all health plans issued or renewed on or after September 23, 2010.
• Educate clients about the removal of annual and lifetime limits. • When appropriate, let clients know the impacts to their plan.
Free resource:
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6. Patient Protections
What happened?
What does this mean to you?
Emergency Room Visits • Emergency room services are now covered both in- and
out-of-network at the same level (if it is considered an emergency).
OB/GYN Visits • Your clients do not need a referral to get care from an
in-network OB/GYN.
• Educate clients on the new protections. • Use the new plan features in your marketing messaging.
Free download:
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Hot Topics in Health Reform
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Medical Loss Ratio (MLR) Rebates Also known as, the 80/20 Rule
What does this mean to you?
What happened? Insurers are required to spend at least 80% of premiums on claims and activities that improve healthcare quality for members. ... OR the insurer must rebate the difference to the policyholder.
• Rebates must be paid by August 1 each year! • Once rebates are mailed, help clients understand why they did/did not receive the rebate.
How are the rebates calculated? Using a government-prescribed calculation formula at a state, market segment and legal entity level.
Free download:
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Women’s Preventive Services
What does this mean to you?
What happened? August 1, 2012 marked an important date that phases in coverage for even more (#6 and #7 below) preventive services covered at 100% (no co-pays, deductible or co-insurance), with in-network providers: 1. Annual well-woman visits 2. Screening for gestational diabetes 3. Testing for the human papillomavirus, or HPV 4. Counseling for sexually transmitted infections
• When your HumanaOne major medical plan members renew on or after Aug. 1, 2012, remind them if they go to an in-network provider, the new women’s preventive services will be covered at 100%. • Send your clients educational information/articles about the services on their plan that are covered at 100%.
5. Counseling and screening for HIV 6. Contraception methods and counseling
Free article:
7. Breastfeeding support, supplies, and counseling 8. Screening and counseling for domestic and interpersonal violence
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Summary of Benefits & Coverage
What does this mean to you?
• As an individual agent, you
What happened? The SBC document intended to provide consumers with consistent and comparable information regarding health plan benefits and coverage across health insurance carriers. It includes: • Covered benefits • Cost-sharing provisions • Limitations • Exclusions
are not obligated to distribute an SBC to your client. • You may receive questions from your clients when they receive their SBC in the mail.
Why? 1. Since it is required they receive the SBC within 7 days of application, they may receive the SBC before their application is approved or before their coverage options are finalized. 2. They will receive another SBC if their plan changes from the original application.
Free agent fact sheet:
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Essential Health Benefits
What happened? States have submitted “benchmark plans”
What does this mean to you?
These plans must cover 10 categories of mandated essential health benefits:
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1. Ambulatory patient services
• Stay up to date with
2. Emergency services
decisions made in your state
3. Maternity and newborn care
“essential benefits.”
4. Pediatric services, including dental and vision care 5. Rehabilitative/habilitative services and devices 6. Mental health and substance use disorder services,
about details around these • Understand the plans in your state so that clients come to you for guidance when it is time to purchase.
including behavioral health treatment
7. Preventive and wellness services and chronic disease management
FREE Information Bulletin:
8. Hospitalization 9. Prescription drugs 10. Laboratory services
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Impacts to Premiums in 2014
The law mandates significant changes that provide additional new benefits and protections, which may put upward pressure on premiums: • Age Bands: Older individuals cannot be required to pay more than three times what a younger individual pays, which may result in lower premiums for older individuals, but higher premiums for younger individuals. • New taxes and fees on premiums: The law imposes a new sales tax on health insurance premiums. This will add as much as $475 per year to the average family premium*.
How much will premiums increase? • On average, plans will have more benefits due to mandated minimum “actuarial value of 60% (more benefits = higher premium). • As an example of premium impact, consulting firm Milliman concluded that in the state of Ohio “Prior to the application of the premium tax credit subsidy, the individual health insurance market premiums are estimated to increase by 55% to 85% above current market average rates (excluding the impact of medical inflation).”* Premium impact will vary by state as well as age and/or health status. *Source: Milliman Client Report for Ohio, August 2011.
What does this mean to you?
• Be prepared to answer questions on the impacts on the price of coverage. • Highlight the new preventive services, protections, and essential benefits, etc.
Free article:
http://www.ohioexchange.ohio.gov/Documents/MillimanReport.pdf
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Individual Mandate In 2014, more than 30 million Americans will find coverage under the law or pay a penalty. Shopping for and purchasing insurance options will still be complex. This is YOUR OPPORTUNITY to be a source of knowledge for your clients and prospects, and guide them through the new environment created by healthcare reform!
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Exchanges
(What we know)
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Plans on the Exchange
What is an Exchange? • Exchanges will be marketplaces for purchasing insurance. • Each state must set up an Exchange or use the federal government Exchange. • Insurance carriers have the option of whether or not to sell plans on the Exchange.
Plan tiers are categorized by “actuarial value.” Example: a Platinum Plan has an actuarial value of 90%. For the standard population, this means: • the plan will pay 90% of their healthcare expenses.
90% Platinum Plan
80% Gold Plan
70% Silver Plan
60% Bronze Plan
Catastrophic Plan
• the enrollees themselves will pay 10% through a combination of deductibles, co-pays, and co-insurance.
The Catastrophic Plan is a lower-cost health plan with limited benefits available to people under age 30 and to people with financial hardships.
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Exchange Timeline Open enrollment period BEGINS October 1, 2013.
PHASE 1:
PHASE 2:
If a person’s application is finalized between October 1 and December 15, 2013, their effective date is 1/1/14.
For the open enrollment period continuing from December 16, 2013 – March 31, 2014: • If a person’s application is finalized between the first and fifteenth day of any subsequent month, the Exchange must ensure a coverage effective date of the first day of the following month.
• If a person’s application is finalized between the sixteenth and the last day of the month for any month between December 2013 and March 31, 2014, the Exchange must ensure a coverage effective date of the first day of the second following month.
Open enrollment period ENDS March 31, 2014. • From 2015 forward, open enrollment will
most likely end on or before December 31.
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Your Book of Business At time of purchase, or renewal, your clients may fit into a general category: Group 1
Group 2
Group 3
Individual with annual income of $10,830 to $43,336
Individual with annual income of $43,336
2014: $95 per adult and $47.50 per child (up to a family maximum of $285)
OR
Family of 2 with annual income higher than
100-400% FPL
OR Family of 3 with annual income of $18,310 to $73,240 OR
OR
Financial Assistance
Family of 2 with annual income of $14,470 to $58,280
Higher than 400% FPL
Family of 4 with annual income of $22,050 to $88,200 Must purchase ON the Exchange in order to receive government subsidy, or may be eligible for Medicaid coverage, depending on your state.
$58,280 OR Family of 3 with annual income higher than $73,240 OR Family of 4 with annual income higher than $88,200 Option to purchase on OR off the Exchage since they will not receive a subsidy.
Opt to pay penalty
OR 1% of household income, whichever is GREATER 2015: $325 per adult and $162.50 per child (up to a family maximum of $975) OR 2% of household income, whichever is GREATER 2016: $695 per adult and $347.50 per child (up to a family maximum of $2,085) OR 2.5% of household income, whichever is GREATER
18 FOR AGENT USE ONLY, FPL dollar amounts change annually.
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Financial Assistance Available on the Exchange
1. Premium Subsidies (Also known as, Premium Tax Credits)
Who is eligible? Clients who are 100 to 400% FPL How much is the tax credit? See calculation: How this is calculated Income $
%
100-400 FPL
Individual with annual income of $10,830 to $43,336 OR
X Income Level = See FPL chart on pg. 21
Group 1
$ Maximum your client will be required to pay for the second lowest cost Silver Plan.
Family of 2 with annual income of $14,470 to $58,280 OR
Income Level
Premium as a Percentage of Income
Up to 133% FPL
2% of income
133-150% FPL
3-4% of income
150-200% FPL
4-6.3% of income
200-250% FPL
6.3-8.05% of income
250-300% FPL
8.05-9.5% of income
300- 400% FPL
9.5% of income
Family of 3 with annual income of $18,310 to $73,240
Financial Assistance
For clients who are 100% to 400% FPL (Federal Poverty Level). Ensure that your clients do not have to pay more than a percentage of their income for health insurance. Tax credit is calculated using the following formula and chart.
OR Family of 4 with annual income of $22,050 to $88,200
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Financial Assistance Available on the Exchange (Cont’d.)
Premium Subsidies Example
Example: • Nathan is a 45-year-old male with a 2014 income that is 250% of FPL (about $28,735). • The second lowest cost Silver Plan in the Exchange in Nathan’s area is projected to be about $5,733. • Nathan will not be required to pay more than 8.05% of income, or $2,313 to enroll in the second lowest cost Silver Plan.
Income
X Income Level =
$28,735
See FPL chart on pg. 21
8.05%
Income Level
$2,313 Maximum your client will be required to pay for the second lowest cost Silver Plan.
What does this mean? Nathan only pays $2,313 for a plan that normally sells on the Exchange for $5,733.
Premium as a Percentage of Income
Up to 133% FPL
2% of income
133-150% FPL
3-4% of income
150-200% FPL
4-6.3% of income
200-250% FPL
6.3-8.05% of income
250-300% FPL
8.05-9.5% of income
300- 400% FPL
9.5% of income
Nathan
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Financial Assistance Available on the Exchange (Cont’d.)
2. Cost-Sharing Subsidy • For clients who are 100% to 250% FPL.
Federal Poverty Guidlines (FPL), 2011
• Protects your clients from high out-of-pocket costs
% OF FPL
at point of service.
• Allows the purchase of a Silver Plan (which typically
covers the cost of medical care at 70%) with a HIGHER percentage of coverage (see chart at right).
Who is eligible? • For clients who are 100% to 250% FPL.
1
P E R S O N S I N FA M I LY 2 3
4
100%
$10,890
$14,710
$10,530
$22,350
133%
$14,484
$19,564
$24,645
$29,726
150%
$16,335
$22,065
$27,795
$33,525
200%
$21,780
$29,420
$37,060
$44,700
250%
$27,225
$36,775
$46,325
$55,875
300%
$32,670
$44,130
$55,590
$67,050
400%
$43,560
$58,840
$74,120
$89,400
Note: Federal Poverty Guidelines establish the maximum family income levels for determining eligibility for certain federal programs.
• Protects your clients from high out-of-pocket
Source: U.S. Department of Health and Human Services, www.aspe.hhs.gov.
costs at point of service.
What is the benefit? • Allows the purchase of a Silver Plan (which
typically covers the cost of medical services at 70%) with a HIGHER percentage of coverage (which means lower deductibles and co-payments).
70% Platinum Plan
Annual Income
New Coverage %
100 - 150%
94%
150 - 200%
87%
200 - 250%
73%
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To download slides from the full presentation, visit: humana.com/agentnews
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