WPBENWLP 03/13

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55 Subsidies for individuals For exchange plans only To be eligible, individuals must: –Earn between 100% and 400% of federal poverty level (FPL) –Not have access to minimum essential coverage through their employer or have access to coverage, but it is not affordable –Not be eligible for minimum essential coverage through government-sponsored programs such as Medicare and Medicaid Premium credits – For any level plan Cost-sharing subsidies – Silver Plan only Income ranges of 100% - 400% FPL Individual: $11,490 to $45,960 Family of four: $23,550 to $94,200

66 Penalties for individuals 2014: Greater of $95 or 1% of taxable income 2015: Greater of $325 or 2% of taxable income 2016: Greater of $695 or 2.5% of taxable income 2017 and beyond: Annual adjustments KAISER EXAMPLE $50k annual pay example over 2014,15 & 16

77 7 WHATWHENWHO PAYS HOW MUCH Comparative Effectiveness Research Fee Reinsurance Assessment Tax on high earners Tax on unearned income Insurer fees High-cost insurance tax Plan/policy years ending 10/1/12 1/1/2014 Tax year beginning 1/1/2013 Tax year beginning 1/1/2014 Tax year beginning 1/1/2018 Insurers of fully insured plans; sponsors/administrators of self-insured plans Issuers of fully insured plans Individuals Issuers of fully insured plans Issuers of fully insured plans; sponsors/administrators of self-insured plans $1 per person per year; adjusted for subsequent years Estimated at $5.25 per person per month.9% increase on Medicare, in excess of $200K single/$250K married 3.8% on unearned income in excess of $200K single/$250K married Estimated at 2.46% of premium, plus state fee 40% on plan costs exceeding “Cadillac” thresholds Reform-related taxes and fees

88 Coverage Requirements for EHBs Applies to: Individual and Small Group Non-grandfathered plans On and off exchange Does not apply to: Large Group plan ASO plans Grandfathered plans Benchmark plan: Each state will select for the purpose of defining EHBs If no selection, default is SG plan with the highest enrollment

99 Coverage Requirements for EHBs Categories 10 identified in the law Any category not covered by the benchmark must be supplemented Habilitative services Pediatric vision On and off exchange plans Pediatric dental On exchange plans need not include if standalone dental is available on exchange Off exchange plans need not include if reasonably assured that enrollee is also enrolling in an exchange-certified standalone dental plan Plan must cover the greater of One drug in each category and class, or The same number of drugs in each category and class as the EHB benchmark Coverage Requirements for EHBs

10 Categories Mental Health parity rules apply to Individual and SG plans Adult vision and dental are not EHBs, even if covered under the benchmark States may require services to be covered beyond the EHB benchmark coverage State will be responsible for the cost of these services for plans offered on the Individual exchange or SHOP. Issuers may choose to cover services beyond EHBs Substitution of benefits or quantitative limits within specific EHB category is permitted Must be actuarially equivalent Large group and self-funded plans do not need to cover all 10 categories of EHBs. However, if they do cover EHBs The out-of-pocket maximum applies to any EHBs EHBs cannot have annual or lifetime dollar limits Coverage Requirements for EHBs

11 Rate Changes Expected in The most significant changes will be in markets for individuals and small employers Rating constraints, product constraints, new benefit mandates, and new taxes will have the biggest impact. The impact will vary significantly between each individual and each small employer.

12 Rate Changes Expected in Different studies forecast a range of impact One report, led by former CBO Director Doug Holtz-Eakin of the American Action Forum, found that on average, premiums for young, healthy people in the individual and small group market would jump 169% while the costs for older, less healthy people would decrease by an average of 22% A study by the actuarial firm Milliman in Ohio shows the changes expected for small employers will range from a decrease of 25% to an increase of 130% In Indiana, Milliman found that the increase in premiums in the individual market beginning in 2014 could range from 75%-95% and rates for others would decrease Other studies conducted by Dr. Jonathan Gruber of MIT in Maine, Wisconsin, Minnesota and Colorado found that premiums in the individual market may increase as much as 85% and premiums in the small group market may increase more than 20%

13 OPEN Enrollment Periods DEFINED OPEN ENROLLMENT periods will exist On Exchange THE ACA DOES NOT ADDRESS Open Enrollment periods Off Exchange

14 States with OE Requirements NY and ME require year round open enrollment. OH has year round open enrollment products for people who do not otherwise have access to coverage. CA requires an open enrollment period to allow currently covered individuals to move to an equal or lesser plan if they have had 18 months of continuous coverage. WI requires carriers to allow current enrollees to move to less rich coverage at renewal. Child-only open enrollment periods exist in CA, CO, GA, KY, IN, MO.

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17 *All exchanges required to offer this option through SHOP.

18 Options for Small Employers Employers who have 50 or fewer employees will have at least the following options in 2014: Offer a fully insured plan through either: A SHOP exchange – Employer may be eligible for a temporary two-year tax credit to offset part of the employer premium contribution The off-exchange market Offer an ASO plan, if allowed by state law, where EHB and metal level requirements don’t exist Stop offering coverage and let employees buy through the Individual market Combine to be able to purchase through the large group market Offer “non-affordable” coverage to some employees to make them eligible for subsidies on individual exchanges

March 23 Health care law enacted August HHS started issuing planning grants to states July 11 HHS issued first set of proposed rules December Deadline for states to submit exchange plans January 1 HHS determines whether state exchange will be ready by October October 1 Open enrollment begins January 1 Exchange coverage begins Target date For exchanges to be financially self-sufficient State option To expand exchange eligibility to larger groups Exchange Timelines Many of the details, regulation and guidance regarding these programs are still up in the air.

20 Supposed to take effect several years ago On April 18, 2011, the Department of Labor held a public forum The Labor Department has stated it will issue regulations on the auto enrollment requirement in the future, and will give employers adequate notice of when to comply. Although the Labor Department has previously said that it would require auto enrollment in 2014, that date has been pushed off to the indefinite future. Automatic enrollment applies to employers with 200 or more lives Automatic Enrollment

21 APPLICABILITY TO MULTIEMPLOYER PLANS – CONFUSING RECORDKEEPING REQUIREMENTS Keep detailed records on look-back, stability periods, determination of full-time employee status ASSESSMENT AND PAYMENT OF EXCISE TAX IRS will send notice after it examines employee tax returns and employer informational filing under IRC 6056 (employer reporting to IRS on health insurance) Employer has opportunity to respond to notice before paying If employer liable, IRS will send demand for payment Miscellaneous Provisions

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24 Legal ANTHEM BLUE CROSS IS THE TRADE NAME OF BLUE CROSS OF CALIFORNIA. ANTHEM BLUE CROSS AND ANTHEM BLUE CROSS LIFE AND HEALTH INSURANCE COMPANY ARE INDEPENDENT LICENSEES OF THE BLUE CROSS ASSOCIATION. ®ANTHEM IS A REGISTERED TRADEMARK OF ANTHEM INSURANCE COMPANIES, INC. THE BLUE CROSS NAME AND SYMBOL ARE REGISTERED MARKS OF THE BLUE CROSS ASSOCIATION. Legal