2. The Affordable Care Act Presented by Brad Knerr Account Executive bknerr@vanbeurden.com (805)503-4719 www.vanbeurden.com

3. Agenda – The Affordable Care Act (ACA) – A look back – major health reform changes since 2010 – On the horizon – What you should know about 2014 changes – Analysis www.vanbeurden.com

4. Affordable Care Act The Affordable Care Act (ACA) was signed into law on March 23, 2010 to improve the quality of health care and increase access to care for individuals and businesses. California has been a leader in supporting the Affordable Care Act. It passed legislation to conform with the law, and was one of the first states to establish its own health insurance exchange. www.vanbeurden.com

5. A quick look back 2010 to present

6. 5 Timeline Changes to appeal ProcessAnnual rate review processMedical Loss Ratio rebates Flexible Spending Account contributions cap ($2,500) limit Elimination of lifetime limits on Essential benefits Health premium regulation, Medical Loss Ratio (MLR) Patient-centered Outcomes Research Institute (PCORI) fee Medicare tax increase for high earners Expanded coverage for early retirees Increased penalty for non- qualified HSA withdrawals, including over the counter drugs Expanded Regulatory Compliance imposed on employers now offering group benefits. Non-compliance could result in fines. No deduction for retiree drug subsidy Extending coverage to young adults up to age 26 Women’s extended preventive services with no cost-sharing W-2 reporting on value of employer sponsored plans Grandfather status New rescission rules Non-discrimination rules No pre-existing conditions for enrollees under age 19 Preventive care at no additional cost Regulating annual limits on essential benefits Small business tax credits No prior authorization for emergency services 2010201120122013 As a result of the ACA, many people have benefitted from expanded coverage and cost savings. Since the law was passed, many provisions have been enacted creating a foundation for the 2014 market.

7. What’s ahead for 2014? The Individual/ Family Market

8. 7 Individual/Family Plans Grandfathered vs. Non-Grandfathered- If you purchased your plan prior March 23,2010 and did not make any significant plan changes your plan is grandfathered. If your plan was purchased after March 23, 2010 or if you made any changes to your plan after March 23, 2010 then your plan is non-grandfathered Grandfathered Plans Plans and networks do not change on January 1, 2014

9. 8 Individual/Family Plans ACA Compliant Plans Platinum Plan = 90% Actuarial Value* Plan pays 90% of health costs Enrollee pays 10% Gold Plan = 80% Actuarial Value* Plan pays 80% of health costs Enrollee pays 20% Silver Plan = 70% Actuarial Value* Plan pays 70% of health costs Enrollee pays 30% Bronze Plan = 60% Actuarial Value* Plan pays 60% of health costs Enrollee pays 40% Each plan in every metal level must cover the same set of essential health benefits. While the range of benefits will be very similar among the plans, the coverage will vary across these levels, based on the amount of cost- sharing required. *Note that the actuarial values must fall into a 4 percentage point range of their category, so the plan and member plan percentages may vary.

10. 9 Individual/Family Plans Deductibles: Plan design deductibles Silver and above may not exceed $2,000 (single) or $4,000 (family).. Limits on Cost-Sharing: All cost-sharing (including copayments) for Essential Health Benefits services must count toward the out-of-pocket maximum. In addition, cost-sharing (deductibles, coinsurance, copayment, or similar charges) will be limited to the dollar amounts in effect that year for HSA-eligible high deductible health plans. Essential Health Benefits include: Ambulatory Patient Services Emergency ServicesHospitalizationMaternity & Newborn Care Mental Health and Substance Abuse Services Prescription DrugsRehabilitative Services and Devices Laboratory Services Preventative and wellness services Pediatric Services

11. The Exchanges- Covered CA Individual/Family Plans

12. 11 Individual/Family Plans Individual Mandate- any individuals without government approved coverage are subject to a tax/penalty. Each tax/penalty applies to each individual, up to a max of three household members. Health Insurance Penalty Phase-In Schedule Pay the greater of the two amounts Year Percentage of income above tax-filing threshold Set dollar amount 2014 1.0% $95 2015 2.0% $395 2016 2.5% $695

13. 12 Individual/Family Plans Elimination of Pre-existing Conditions and Medical Underwriting- all plans will become guaranteed issue, no longer will carriers be able to decline or “rate-up” an applicant due to medical history. Open Enrollment- Because plans will be Guaranteed issue there will be an open enrollment period. 2014- 10/1/2013-3/31/2014 2015 and subsequent years- 10/1-12/7 Enrollment and Changes can only be made during those times unless a qualifying event happens ie marriage, birth of a child, adoption, etc.

14. 13 The Exchanges Beginning in 2014, all Americans must purchase health insurance or pay a tax. To facilitate purchasing, states are setting up health insurance exchanges for individuals and small businesses to purchase coverage. California’s Exchange will have two parts: Covered California- Individual & family plans SHOP – Small Business Health Options Program Enrollment thru the Exchanges starts on October 1, 2013- 3/31/2014

15. 14 The Exchanges: Covered CA Individual/Family Plans Tax Credits/Subsidies – if you fall between 138% and 400% of the Federal Poverty Line and purchase your insurance inside the exchange (Covered CA) you could be eligible for a government subsidy, in the form of an advanced premium tax credit. # of people Household138% FPL400% FPL 1$1,300$3,723 2$1,761$5,043 3$2,222$6,363 4$2,682$7,683 5$3,143$9,003 6$3,604$10,323

16. The Exchanges- Covered CA Individual/Family Plans Covered CA- Individual Health Insurance Exchange o Online marketplace to view the standardized plans across the different carriers in your region. – 13 carriers participating across the state

17. The Exchanges- Covered CA Individual/Family Plans

18. Analysis At Van Beurden Insurance we will analyze your circumstances, assess your situation, and present all appropriate options.

19. Need More Information? Brad Knerr (805)528-1484 x 4719 bknerr@vanbeurden.com