Page 1 The Health Benefit Exchange and the Small Group Market Department of Health and Social Services

Page 2 Agenda  Welcome and Introductions  Health Insurance Exchange Markets  Employer Eligibility  Participation and Contribution Requirements  Purchasing Models  Premium Billing, Collection, Remittance  Key Issues for Delaware  Questions/Open Discussion

Page 3 Overview of the Health Benefit Exchange | What is it?  “Expedia” for health insurance:  Organized commercial insurance marketplace for individuals and small employers (up to 50 employees)  Enables consumers to compare plans and enroll in coverage  One-stop shop for publicly subsidized health coverage:  Medicaid  Delaware Healthy Children Program (CHIP)  Subsidized commercial insurance  Source of information on carriers and plan performance

Page 4 Exchange | Core Responsibilities  Develop single, streamlined eligibility process for all public health coverage programs  Offer “qualified health plans” in five benefit groups, which will differ based on point-of-service cost sharing (e.g., co-pays, co-insurance, deductibles):  Platinum (90% actuarial value)  Gold (80% AV)  Silver (70% AV)  Bronze (60% AV)  High Deductible Health Plan (individual market only)

Page 5 Exchange | Core Responsibilities  Offer health plans in the individual and small group markets:  Premium subsidies and lower out-of-pocket costs available to eligible individuals and families with income up to 400% of the Federal Poverty Level (e.g., up to $43,561 for an individual)  Premium subsidies available to small employers with lower-wage employees  Develop “calculator” to enable people to estimate total cost of coverage (e.g., premiums, co-pays, deductibles)

Page 6 Exchange | Single Premiums

Page 7 Income as % of FPL Annual IncomeMonthly IncomePremiums as % of Income Monthly Premium 133%$14,484$1,2073%$ %$16,335$1,3614%$ %$21,780$1,8156.3%$ %$27,225$2, %$ %$32,670$2,7229.5%$ %$38,115$3,1769,5%$ %$43,560$3,6309.5%$ Exchange | Single Premiums

Page 8 Income as % of FPL Annual IncomeMonthly IncomePremiums as % of Income Monthly Premium 133%$29,725$2,4773%$ %$33,525$2,7944%$ %$44,700$3,7256.3%$ %$55,875$4, %$ %$67,050$5,5879.5%$ %$78,225$6,5199,5%$ %$89,400$7,4509.5%$ Exchange | Family of Four Premiums

Page 9 Employer Eligibility  In 2014, Small Business Health Options Program (“SHOP”) Exchange will offer health insurance to small employers  Businesses with 50 or fewer full-time employees allowed to purchase coverage through SHOP Exchange in 2014 and 2015;  SHOP Exchange must serve groups of 100 or fewer full-time employees in 2016 and beyond; and  State may choose to expand Exchange to larger groups in  Employers with low-wage workers may be eligible for premium subsidies through the Exchange  Firms with up to 25 employees;  Average wages of $50,000 or less; and  Up to 50% tax credit available for two years.

Page 10 Individual and SHOP Exchange  State may choose to establish two Exchanges:  Individual market Exchange – American Health Benefit Exchange  Employer Exchange – SHOP Exchange  Or one Exchange that serves both the Individual and Employer markets  For administrative purposes, a single Exchange with separate risk pools can be used to serve both markets  Combining the Individual and SHOP Exchange does not require the State to merge these two markets

Page 11 Participation and Contribution Requirements  Under current underwriting rules, insurers require employers to meet certain participation and contribution requirements  Participation:  Employers with five or fewer employees generally required to have all employees enroll in employer-sponsored insurance (with exceptions for spousal coverage)  Employers with six or more employees required to enroll 75% of eligible employees in employer-sponsored insurance  Contribution:  Employers must contribute at least 50% of premium

Page 12 Purchasing Models of the Exchange  Federal law provides flexibility in how the SHOP Exchange can offer coverage to employers and their employees  Upcoming federal regulations will further define the purchasing options for the SHOP Exchange  Four potential purchasing models:  One Carrier, One Plan  One Carrier, Multiple Plans  All Carriers, One Plan Level  All Carriers, All Plan Levels  Each model can support range of contribution strategies

Page 13 Option 1 -- One Carrier, One Plan Monthly Premiums for Single Coverage Plan/CarrierCarrier ACarrier BCarrier CCarrier D Platinum$540$531$518$554 Gold$480$472$460$492 Silver$420$413$403$431 Bronze$360$354$345$369 70% Employer contribution = $289 and 30% Employee contribution = $124

Page 14 Option 2 -- One Carrier, Multiple Plans Monthly Premiums for Single Coverage Plan/CarrierCarrier ACarrier BCarrier CCarrier D Platinum$540$531$518$554 Gold$480$472$460$492 Silver$420$413$403$431 Bronze$360$354$345$369

Page 15 Option 2 -- One Carrier, Multiple Plans Example of Contribution Split Between Employer and Employee Carrier BTotal PremiumER ShareEE Share Platinum$531$289$242 Gold$472$289$183 Silver$413$289$124 Bronze$354$289$65

Page 16 Option 3 – Multiple Carriers, One Plan Level Monthly Premiums for Single Coverage Plan/CarrierCarrier ACarrier BCarrier CCarrier D Platinum$540$531$518$554 Gold$480$472$460$492 Silver$420$413$403$431 Bronze$360$354$345$369

Page 17 Option 3 -- Multiple Carriers, One Plan Level Example of Contribution Split Between Employer and Employee Silver LevelTotal PremiumER ShareEE Share Carrier A$420$289$131 Carrier B$413$289$124 Carrier C$403$289$114 Carrier D$431$289$142

Page 18 Option 4 – All Carriers, All Plan Levels Monthly Premiums for Single Coverage Plan/CarrierCarrier ACarrier BCarrier CCarrier D Platinum$540$531$518$554 Gold$480$472$460$492 Silver$420$413$403$431 Bronze$360$354$345$369

Page 19 Option 4 – All Carriers, All Plan Levels Example of Employee Share of Monthly Premiums Plan/CarrierCarrier ACarrier BCarrier CCarrier D Platinum$251$242$229$265 Gold$191$183$171$203 Silver$131$124$114$142 Bronze$71$65$56$80 ** Employer share of premiums fixed at $289, or 70% of Carrier B’s Silver Level plan’s premiums.

Page 20 Premium Billing, Collection, Remittance

Page 21 Premium Billing, Collection, Remittance

Page 22 Key Issues for Delaware  Should the State establish one Exchange or separate Exchanges to serve the individual and group markets?  Should the individual and small group market risk pools be combined or remain separate?  What type of purchasing model will best meet the needs of Delaware employers, employees, and insurers?  Is there a particular market segment that the SHOP Exchange may best serve?

Page 23 Key Issues for Delaware  Should the State’s Exchange establish minimum contribution and participation requirements for small employers purchasing coverage through the Exchange?  How will these contribution and participation requirements apply in an “employee choice” model?  Should small groups be limited to 50 or fewer employees until 2016, when the definition of small groups must be expanded to 100 employees?  What might be the effect on the broader commercial insurance market from the introduction of the Exchange?