An ACA Update for 2018: What Lies Ahead! presents An ACA Update for 2018: What Lies Ahead! Presented by: Rodger Bayne President, Benefit Indemnity Corporation rodger.bayne@benefitindemnity.co

Course Objective: Students will be brought up to date with various changes to the ACA landscape. Changes initiated by regulators, the administration, Congress (through the Tax Reform legislation & Budget negotiations) will be reviewed for discussion and impact. The class will look forward to the impact, cause and effect of various potential changes and market responses by health insurance carriers, insurance producers and what those mean to consumers.

Introduction ACA Changes Effective or Imminent Tax Reform Individual penalty / mandate 20 states file suit Idaho defies ACA Association Health Plans pending Utah Rx initiatives/requests Short term medical plans

Tax Reform Three Taxes delayed by Tax Reform Individual Penalty Health Insurance Tax Suspended in 2017 In place for 2018 – projected $14.8 billion Suspended for 2019 by Tax Reform Cadillac Tax Delay in this tax extended till 2022 Medical Device Tax Tax Reform extends the delay of this 2.3% tax through 2019 Opens New ACA Repeal Argument

Individual Mandate Repealed Individual Behaviors No penalty after 2018 No demand for individual penalty avoidance Reduction in employee MEC preventive plan contributions Employer Behaviors Pay 100% of preventive only MEC plans Avoid penalties where possible Insurance Professional Behaviors Ignore the changes Sell individual during open enrollment or as a service to group customers Spurs new Constitutional Challenge to the ACA

20 States File Suit The “New Coke” Smart or Lucky? ACA Revised by Tax Reform to no longer include penalty tax Requirement to purchase still exists Re-opens an admitted constitutional challenge Establishes grounds for full repeal Courts have already concluded that the ACA cannot be separated from the Mandate Mandate NOW unconstitutional with no taxation “out”

Idaho Ignores Federal Law Idaho offers to approve non-ACA complaint health plan filings Higher costs for sicker “groups” $1,000,000 maximum Older age rates above “modified community rate” More… Carriers Swiftly Adopt and File Product Stay Tuned!

Association Health Plans Pending Subject to Final Regulations Association Health Plans Could look like Idaho Could change the face Could, Could, Could… maybe.

Utah and Others Request Canadian Rx Utah, Vermont, West Virginia, Oklahoma Requesting the right to import Canadian prescription drugs for distribution in their states 2003 federal law that created the Medicare Part D program. That law says the U.S. Department of Health and Human Services can approve drug importation plans if it is convinced the plans will save money and will not create any public health concerns.

Short Term Medical Plans New Expansion Regulations Donald trumps Obama’s Executive Order Reversing the Restriction on Short Term Policies to last no longer than 90 days. Could be used to just under 1 year Could Create More Aggressive Use “Wild wild west of product sales” “ACA becomes more established as high risk pools”

Market Evolution Minimum Essential Coverage Preventive Only plans (often called MECs) Individual value Avoided penalty Provided Only Preventive Coverage

Market Evolution Minimum Essential Coverage Preventive Only plans (often called MECs) Employer value Enrollment avoids penalty A implications

Market Evolution Minimum Essential Coverage Preventive Only plans (often called MECs) Broker value Satisfying employer demand for solutions Small revenue (often – sometimes abused) Helps gain participation for overall group

Market Evolution Self-Funded Plans Employee value More Options Quality Coverage Most Often Better Service

Market Evolution Self-Funded Plans Employer value More… Lower Cost Options Innovation Transparency Lower Cost

Market Evolution Self-Funded Plans Broker value All of the above Solutions for their customers

Market Evolution Worksite Products Individual/Employee value Greater in the WW West scenario Short Term plus…

Market Evolution Worksite Products Employer value Same scenario Offer smaller benefits with employer dollars Offer voluntary plans to cover gaps

Market Evolution Worksite Products Broker value More work More revenue? More confusion?

Summary The hole in the ACA dike is expanding rapidly Conceivable complete failure within the ten years “we” predicted Change = Opportunity

Questions? For a copy of the Presentation, email: marketing@benefitindemnity.co