Presentation on theme: "Kevin Conrad, RHU President of the Ohio Association of Health Underwriters."— Presentation transcript:
Kevin Conrad, RHU President of the Ohio Association of Health Underwriters
Small Group Today Small Group as of 2014 Small Group as of 2016 Defined by Ohio as groups of 2-50 Defined by ACA as groups of 1-50 Defined by ACA as groups of 1-100
Small Group (2-50) Today Small Group in 2014 0% rate up 134% rate up Healthy Group Sick Group 0% rate up 134% rate up Healthy Group Sick Group Healthy Groups and Sick Groups pay the same rate There will be both winners and losers depending on the health of your group
Small Group (2-50) Today Small Group in 2014 20 yr. old 8x 60yr. old * Most carriers use something close to this ratio 20 yr. old 3x 60 yr. old There will be both winners and losers depending on the average age of your group
Small Group (2-50) Today Small Group in 2014 25 yr. old 2.4x 25yr. old male female * Most carriers use something close to this ratio and this ratio disappears as the age increases Unisex rates There will be both winners and losers depending on the average gender of your group
Small Group (2-50) Today Small Group in 2014 Most group carriers charge the same rate for smokers and non smokers Non smokers 50% smoker There will be both winners and losers depending on the smokers in your group
“Specifically, Milliman's report projects that individual premiums in Ohio could increase by as much as 55 to 85 percent in 2014 not including current medical trend, which has been an average increase of 7 to 8 percent nationwide each year. Moreover, some individuals may see their premiums increase by 90 to 130 percent depending on their current health status, while others may see decreases. Those in the small group market (employers with 2 to 50 employees) are projected to experience average increases of 5 to 15 percent in 2014, not including yearly medical trend increases. However, some small groups may see increases of up to 150 percent, while others may see decreases of 40 percent depending on the group's current health status.” http://www.insurance.ohio.gov/newsroom/pages/09202011millimanre port.aspx
2014 Coverage Options 1.Individual Coverage a.Public Health Insurance Marketplace (Subsidy) b.Off / Private Health Insurance Marketplace 2.Full Insured Group Coverage a.SHOP Health Insurance Marketplace (ER Tax Credit) b.Off / Private Health Insurance Marketplace 3.ASO / Partially Self Funded Group Coverage ERISA 4.Do nothing and pay the individual penalty
2014 Coverage Options Individual and Fully Insured Group Market will offer the “Metallic Plans”. 1.Platinum (90% Actuarial Equivalent) 2.Gold (80% Actuarial Equivalent) 3. Silver (70% Actuarial Equivalent) 4.Bronze (60% Actuarial Equivalent)
Essential Health Benefits 1. Ambulatory patient services 2. Emergency services 3. Hospitalization 4. Maternity and newborn care 5. Mental health and substance use disorder services, including behavioral health treatment 6. Prescription drugs 7. Rehabilitative and habilitative services and devices 8. Laboratory services 9.Preventive and wellness services and chronic disease management 10.Pediatric services, including oral and vision care BIG CHANGE: Theses are the same for both the Individual Market and the Small Group Market.
New Landscape For the first time in Ohio, a person can buy an individual medical policy that is as good as a plan they would get through an employer. What does these mean: Someone with pre-existing medical conditions can leave their job and start their own business. Someone with pre-existing medical conditions can retire early and be guaranteed good medical coverage. No longer dependent on COBRA.
Individual Subsidies Someone buying medical coverage on their own will pay based on income if that person makes less the 400 of the FPL. Their share ranges from 0% to 9.5% of W2 Income. Example of what it will cost for the second lowest priced Silver Plan for a person age 45 making $35,000 (305% FPL) Estimated total Premium: $416 (could change) Estimated Tax Credit: $139 (could change) You Pay (9.5% of W2 income): $277 (won’t change)
Uncharted Territory As a result of all the changes we have discussed so far something very unusual is going to happen in the insurance world. Employers with a young healthy work force which in insurance terms is the best risk will see the largest increases. While employers with an older sicker work force will likely see a slight rate reduction. There is a lot to consider going forward…
Your 2014 BIG Decision Keep it or drop it???? Do you need to offer medical coverage to get and keep your employees? What’s the family income of your employees? Are the employees better off on their own? Can benefits other then medical be offered to get and keep my employees? IE: dental, vision, disability Remember there are no penalties if you have less then 50 employees and drop your coverage.
Penalties for 50+ Employers Shared Responsibility Payment (penalty) $2000 Employer does not offer coverage. Employer offers coverage to less then 95% of full time (30 hours) employees and their dependents (children). The penalty is triggered if at least one full time employee receives a premium tax credit to help pay for coverage on the Marketplace. It is paid monthly based on the number of full time employees each month (minus the first 30).
Penalties for 50+ Employers Shared Responsibility Payment (penalty) $3000 Medical plan offered to the Employee was not affordable. It cost the Employee more then 9.5% of their W2 Box 1 wages for Employee only coverage (Safe Harbor). The medical plan does not provide Minimum Value. The plan must cover at least 60% of the total allowed cost of benefits that are expected to be incurred under the plan. The penalty is triggered if at least one full time employee receives a premium tax credit to help pay for coverage on the Marketplace. It is paid monthly based on the number of employees that actually received a premium tax credit that month.
Counting Employees Employers will determine each year if they have more then 50 FTE. The ACA defines a full time employee as anyone who works an average of 30 hours per week or at least 130 hours in a month. In the new world of the ACA two 15 hour per week employees equal one FTE (full time employee). Employer may use any six month period in 2013 to determine if they have more then 50 FTE (transition relief). It’s important to start tracking employee hours NOW.
Counting Employees XYZ Company 40 employees working more then 30 hours. 20 employees working 29 hours. 20 x 29 = 580 hr weekly x 4 weeks = 2320 hr monthly /120 = 19 FTE The employer has a grand total of 59 FTE. What is this employer's penalty if don’t offer affordable MV coverage?
Employee Notice Employers with one or more employees and for most firms with more then $500,000 in annual dollar volume of business. Required regardless if you offer a benefit plan. Must be provided to both full-time or part-time employees. Must be provided to each new employee at time of hire beginning October 1, 2013 (2014 within 14 days of DOH). Must notify current employee by Oct 1, 2013. There is one for Employers who offer coverage and one for employers who do not offer coverage. http://www.dol.gov/ebsa/healthreform/ http://www.dol.gov/ebsa/healthreform/ New COBRA notice also available on the DOL’s website. http://www.dol.gov/ebsa/COBRA.html http://www.dol.gov/ebsa/COBRA.html