Presentation on theme: "Agenda Exchange Context Exchange 101 Implications for Employers"— Presentation transcript:
1Rhode Island Exchange Planning March, 2012 Deb Faulkner Faulkner Consulting Group
2Agenda Exchange Context Exchange 101 Implications for Employers What is an Exchange?Who will use Rhode Island’s Exchange?RI Exchange StatusImplications for EmployersIs it really funding basics? Do you mean the schedule and timeline?
3Exchange ContextFederal reform, post 2014, envisions affordable coverage for virtually all RIers, through the following elements:Individual Mandate requiring that all Rhode Islanders purchase affordable health insuranceMedicaid Expansion to all RI citizens under 133% FPL (childless adults)Commercial Market Reforms Making health insurance accessible to all, leveling the playing fieldExchange Offering federally subsidized and unsubsidized coverage for individuals and small businesses
4RI Health Benefits Exchange Rhode Island Executive Order established the RI Health Benefits Exchange as a division within the Executive AgencyEx-Officio MembersAppointed by the GovernorSmall Business RepDirector of DOAConsumer RepDirector of HealthFormer Health Insurance ExecutiveLaborDirector of AdministrationDirector of HealthConsumer RepConsumer RepE-Commerce ExpertFormer US Attorney (with hospital system expertise)Former Delivery Sys GovernanceSmall Business RepCommissioner of Health InsuranceCommissioner of Health InsuranceSecretary of EOHHSSmall Business RepSmall Business RepPhysician (not currently practicing)Former Insurance ExecutiveLabor
5Agenda Exchange Context Exchange 101 Implications for Employers What is an Exchange?Who will use Rhode Island’s Exchange?RI Exchange StatusImplications for EmployersIs it really funding basics? Do you mean the schedule and timeline?
6Why establish an Exchange? Mission The Rhode Island Health Benefits Exchange will serve as a robust resource for Rhode Islanders and Rhode Island businesses to learn about and easily compare the quality and affordability of their health insurance options, enroll in coverage and, if eligible, access subsidies for coverage.
7RI Exchange Goals Improve the health of Rhode Islanders Achieve near universal coverageFavorably impact health insurance cost trendsFavorably impact health care delivery system effectiveness and efficiencyAdd value to employer health insurance purchasing
9Rhode Islanders seeking Health Insurance The RI Health Benefit ExchangeA robust marketplace for all Rhode IslandersRhode Islanders seeking Health InsuranceMedicaid eligible individualsSubsidy eligible individualsIndividuals (self pay –no subsidy)Employees of Small EmployersEmployees of Large Employers(1) Web Portal: a robust marketplace for all Rhode Islanders to identify health insurance options and purchase coverage(2) Help Rhode Islanders Choose Health Insurance Display insurance options in an easy to understand, highly interactive web page(3) Enroll Determine eligibility, enroll in coverage, &facilitate subsidy
10Post 2014: Exchange UsersRI anticipates three categories of Exchange usersShop through Exchange:901,000(check affordability, compare prices)Employer-BasedIndividualMedicaid (1)Use Exchange to Determine Eligibility: 256,000Ind.Medicaid (1)Employer-basedInd.Enroll through Exchange: 81,000(1) Medicaid totals do not include 17,000 Medicaid eligibles over 65 who will also use the system.Source: Preliminary estimates of post-2014 volume , modeled using CPS, DHS, OHIC, ACS and MEPS data and estimates of undocumented immigrants.
11Exchange Project Status Achieving our mission requires an aggressive change initiative impacting: Policy: business policy, practices and processesOperations: people, roles & organizational structuresTechnology: the systems that support the new policies & practicesUse Mission
12Agenda Exchange Context Exchange 101 Implications for Employers What is an Exchange?Who will use Rhode Island’s Exchange?RI Exchange StatusImplications for EmployersIs it really funding basics? Do you mean the schedule and timeline?
13Implications for Employers Key Elements of ACA: Implications for EmployersIndividual MandateEmployer Penalties (over 50), Tax Credits (Under 25)Commercial Market ReformsEssential Health BenefitsExchange: SHOP (Small Business Health Options Program) Individual Exchange
14Next StepsLess than 18 months from today - need fully operational exchangeFall 2012“Operational Readiness”January 2013Achieve certificationSummer 2013Soft LaunchOctober 2013Open enrollment beginsDecember 2014Exchange Establishment funding endsDecember 2015Medicaid funding (90% federal match) endsUse updated deadlines from Meg – no legislation (we used executive order, in september I believe). Can call Applying for implementation funds October, Add gate review, technology RFP
16Exchange Principles Exceptional Customer Experience Simplicity AffordabilityFlexibilityTransparencyFiscal PrudenceAlignment with other governmental health reform initiativesCatalyst
17Small Employer Tax Credits Small employers will need to purchase insurance through the SHOP Exchange to access tax credits.Who is Eligible Employers with <25 employees with average wages of up to $50,000Amount of Credit Sliding scale up to 50% of the amount they contribute toward insurance premiumsSHOP Requirement (after 2014) In order to receive the credit after 2014, small employers must purchase through the state’s SHOP Exchange.Timing Credits are available starting in Employers may only receive the credit for 2 years after 2013.Source: Health Policy Brief: Small Business Tax Credits, Health Affairs, Jan 14, 2011, Robert Wood Johnson Foundation
18Employer PenaltiesBeginning in 2014, some small businesses may have to pay a penalty if they do not offer affordable coverage.Who Businesses with 51 or more FTEsPenalty $2,000 per employee (excluding the first 30 employees) if they do not offer coverage for employees who average 30+ hours per week.1Coverage Must cover at least 60% of the actuarial value of the cost of benefits.Affordability Requirement Employee’s premium cannot exceed 9.5% of their household income.If not, employees may purchase insurance on their own through the exchange using tax credits.Employers will either pay $3,000 per employee receiving the tax credit, or $2,000 per employee excluding the first 30 workers (whichever is less).1 Note that there is no penalty for part-time employees not offered coverage.Source: Kaiser Family Foundation employer penalty flowchart
19Individual MandateWho is exempted from the requirement to purchase insurance?Religiously opposed to acceptance of benefits from a health insurance policyUndocumented immigrantsPersons who are incarceratedMembers of an Indian tribeIncome below the threshold requiring filing a tax return ($9,350 - individual, $18,700 - family)Anyone who has to pay more than 8% of income for health insurance, after taking into account any employer contributions or tax credits.What insurance coverage is acceptable?Medicare/Medicaid/CHIPTRICARE or veteran’s health programA plan offered by an employerInsurance bought directly that is at least at the Bronze levelA grandfathered health plan in existence before the health reform law was enactedWhat is the penalty for not having insurance? 12014: $95/adult, $47.50/child ($285 family max) or 1% of family income, whichever is greater2015: $325/adult, $162.50/child ($975 family max) or 2% of family income, whichever is greater.2016 and Beyond: $695/adult, $347.50/child ($2,085 family max) or 2.5% of family income, whichever is greater. After 2016, penalty amounts are increased annually by the cost of living.Source: Kaiser Family Foundation individual mandate flowchart1 The penalty is pro-rated by the number of months without coverage, though there is no penalty for a single gap in coverage of less than 3 months in a year. The penalty cannot be greater than the national average premium for Bronze level coverage in an Exchange .
20Context: Commercial Reforms Making health insurance accessible to all, leveling the playing fieldYoung adults on parents’ coveragePre-existing condition protectionsNew restrictions on rate factors“Essential benefits”
21Starting Point Under 65 RI Population: Current Health Insurance Status Total = 901,000(1) Medicaid total does not include 17,000 eligibles over 65.(2) Chart uninsured total based on ACS 2009 data. ACS data for 2010 shows 126,000 uninsured, mostly at lower incomes.Source: Census Bureau American Community Survey 2009, RI Medicaid, Commercial insurance data as reported to OHIC, Large Group/SI includes both carrier reported data and additional subscribers based on ACS data for total privately insured population.
22Work to Date: Policy Populations Served How Best to Serve Individuals How Best to Serve Small BusinessesI changed this entirely, if you hate it lets change it back…agree this was super hard and I might have given too much
23Work to Date: Operations Detailed workplan for operationalizing RI’s Exchange by 2014Business requirementsBusiness process design focused on efficiencies across agencies, improved consumer experience
24Work to Date: Technology Translating business requirements into technical requirementsTechnology “Gap Analysis”New England Collaborative – Innovator grant