3 The DC Health Benefit Exchange (DC HBX) is not a separate market. It is really just a tool to use in purchasing individual and small group insurance. The health plans available in the DC HBX are the same plans that would otherwise be available in the market. The DC HBX is simply a method for selecting a health plan that provides information and options not available currently.
4 Small employers can structure a plan to mimic what is currently offered to their employees, but without adding additional costs or administrative burdens on the employer, employees can select from a wider array of plans to best suit their individual needs. In short, without eliminating what is currently available, the DC HBX expands options available to small employers and their employees
6 There are several reasons for recommending a consolidated marketplace: DC is a small jurisdiction and needs the economies of scale to support the DC HBX. A consolidated marketplace will provide a consistent consumer experience.
7 The DC HBX will increase transparency and enhance competition based on price, quality and service. Individuals, business, agents and brokers will have access to information on all health plans available in DC in one place. Individuals and small business employees will be able to compare and select from all available health plans.
9 After 2014, all non-grandfathered health plans will have to meet a state specific Essential Health Benefits (EHB) requirement, so there will be some modification in all plans. However the basis for determining EHB for DC is the top selling plans in the DC market, so there should not be significant changes in plans as a result of complying with the EHB. All health plans in the DC HBX will have to meet a certain metal level (platinum, gold, silver, or bronze) criteria that will identify the relative share of costs to be paid through premiums vs. other cost sharing features (deductibles, co- pays, etc.). This will make it easier to compare plans.
10 How Will Producers Interact with the DC HBX?
11 Licensed insurance agents and brokers will be eligible to sign up to access the DC HBX. Once registered they can: compare price, quality and service information for all health plans available in DC; access health plan information on the DC HBX web site; sign up employers to purchase insurance through the DC HBX; input employee information to develop quotes for small group health plans; and facilitate the enrollment of employees and individuals into the DC HBX.
12 How Will Small Business Employers Select Coverage Through the DC HBX?
13 The process will work much as it does currently – employers can work with an agent or broker to select a metal level and plan that best suits the needs of their employees. The employer will then have options for determining how to split the cost, including an option of an equal premium for all employees calculated, based on the average age of the employees.
14 Individual employees, however, will then have the opportunity to see all available plans at the selected metal level and their cost for each plan (their cost is based on the relative cost of the plan to the employers selection). Individuals may select any plan. The selection of individual plans by employees will not impact the employers contribution – even if all employees select a different plan. Employers will make one payment to the DC HBX and the HBX will submit the premiums to all insurers selected by the employees.
16 Employers, or their broker, will be able to input their employee census into the DC HBX and get price quotes and comparative information that presents straightforward apples-to-apples comparisons on benefits, cost sharing, quality and customer service information. Because of the EHB and metal level requirements, there will likely be less need for individual negotiations on benefit and cost sharing design.
17 Individuals and small business employees will be able to compare premiums, quality measures and customer service measures for insurance plans sold in the DC HBX. They will also be able to see the provider network for each plan before selecting a plan. The information available to employees in the DC HBX will be presented in ways designed not to overwhelm them. Employee selection will be limited to the metal level selected by the employer, which will reduce the number of health plan options employees will see
18 There will be optional criteria guidelines to further reduce options to a manageable number, if necessary, for example: Select particular insurers to review Select maximum employee contribution Supplemental information will be available by drilling down so employees can look at only the information that interests them. In addition to the broker, a Call Center will be established to answer questions about the DC HBX
20 Mod Squad, Inc. has three employees: Age Pete Cochran45Owner & Benefit Selector Linc Hayes35 Julie Barnes25 There are 3 health insurers with the following monthly premiums: 253545 Alpha Insurance $ 260.00 $ 300.00 $ 400.00 Beta Insurance $ 224.00 $ 290.00 $ 380.00 Gamma Insurance $ 210.00 $ 276.00 $ 360.00
21 The owner Pete, after discussions with his broker and looking at the information provided in the DC HBX about benefits, premiums, cost sharing, quality and customer service, selects Beta for the group as the reference plan for determining a starting premium for each employee. Based on Petes selection, the starting premium for each employee is $298.00 [(224+290+380)/3 = 298] and Pete decides MSI will pay $250 of the premium and the employees starting contribution is $48. The employees are not limited to Beta, they can select any plan and will pay an adjusted premium based on the relative cost of their plan to the reference plan, but the employers cost does not change. The employees will go into the DC HBX and they will see information about benefits, cost sharing, provider network, quality and customer service and the following premiums: Alpha BetaGamma Julie Barnes $ 84.00 $ 48.00 $ 34.00 Linc Hayes $ 58.00 $ 48.00 $ 34.00 Pete Cochran $ 68.00 $ 48.00 $ 28.00
22 Each employee selects their preferred plan based on the information provided in the DC HBX. Pete selects Beta Linc selects Beta Julie selects Beta Alpha BetaGamma Julie Barnes $ 84.00 $ 48.00 $ 34.00 Linc Hayes $ 58.00 $ 48.00 $ 34.00 Pete Cochran $ 68.00 $ 48.00 $ 28.00
23 Each month $48 is deducted from Pete's pay Each month $48 is deducted from Linc's pay Each month $48 is deducted from Julie's pay $144 Monthly total deducted from employee pay That $144 plus $750 for the MSI contribution ($250 for each employee) is paid to the DC HBX which allocates the premium to the individual insurance companies based on the age-based premiums for each employee. $380 is sent to Beta Insurance for Pete's coverage $290 is sent to Beta Insurance for Linc's coverage $224 is sent to Beta Insurance for Julie's coverage $894
24 Each employee selects their preferred plan based on the information provided in the DC HBX. Pete selects Alpha Linc selects Beta Julie selects Gamma Alpha BetaGamma Julie Barnes $ 84.00 $ 48.00 $ 34.00 Linc Hayes $ 58.00 $ 48.00 $ 34.00 Pete Cochran $ 68.00 $ 48.00 $ 28.00
25 Each month $68 is deducted from Pete's pay Each month $48 is deducted from Linc's pay Each month $34 is deducted from Julie's pay $150 Monthly total deducted from employee pay That $150 plus $750 for the MSI contribution ($250 for each employee) is paid to the DC HBX which allocates the premium to the individual insurance companies based on the age-based premiums for each employee. $400 is sent to Alpha Insurance for Pete's coverage $290 is sent to Beta Insurance for Linc's coverage $210 is sent to Gamma Insurance for Julie's coverage $900