Changes under the Healthcare Reform 1

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First there were two choices Under the Affordable Care Act every individual must have Minimum Essential Healthcare Coverage or Pay a Tax Penalty. 3

Minimum Essential Coverage Minimum Essential Coverage is some form of major medical healthcare coverage such as: Medicare TRICARE or VA Medical Benefits – Must be comprehensive, not limited in scope. Medicaid Hawk – I Employer based health insurance Major medical health insurance purchased on the individual market 4

Tax Penalty Minimum $95$325$695 Percent of Income past Filing Threshold 1%2%2.5% If an individual does not have Minimum Essential Coverage they must pay the greater of the two penalties on their taxes. In years after 2016 the penalty is indexed to the rate of medical inflation. Parents are responsible for their children too! 5

Tax Penalty Example 1 Eric has the option to get affordable minimum essential health insurance in 2014, and decides not to get it. In 2014 Eric earned $14,000. Eric has a filing threshold of $12,000. Eric must pay the greater of; $95, the minimum flat amount or $20, 1% of his income past the tax filing threshold. ($14,000 - $12,000) = $2,000 * 1% = $20 Eric must pay a tax penalty of $95 6

Penalty Example 2 In 2014 Jenny had the option to purchase affordable health insurance, that provides minimum value, and did not. She earned $120,000 in Jenny has a filing threshold of $12,000. She has to pay the greater of; $95, the minimum flat amount or $1,080, 1% of her income past the tax filing threshold. ($120,000 - $12,000) = $108,000 * 1% = $1,080 Jenny must to pay a $1,080 tax penalty. 7

There are a number of exceptions to the requirement for Minimum Essential Coverage  If a person is incarcerated  If a person is an undocumented immigrant  If a person is a member of an Indian Tribe  If a person qualifies for a religious exemption  If a person is a member of a healthcare sharing Ministry  If premiums for health insurance would cost more than 8% of your annual household income  If your income is below the filing threshold for taxes  If paying for health insurance would be a hardship for your household 8

Do I need to make any changes to avoid the penalty?  Are you uninsured? – Call the Marketplace  Do you like your current health insurance?  As a preview you can only qualify for tax credits on plans purchased on the health insurance marketplace.  You may be able to keep your current plan.  Or you can shop on the marketplace to see if there is a better deal.  Are you on Medicare? – No change needed  Are you on Medicaid? – No change needed  Are you on Iowa Care? – Watch out, Iowa Care is scheduled to end this year, a new program, Iowa Health and Wellness will be starting, and you will need to enroll in that. 9

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The Iowa Health Insurance Marketplace Iowa is using the Federal Health Insurance Marketplace. The Marketplace is a place for people to look for affordable minimum essential coverage There is a single application process for Medicaid, Iowa Health and Wellness, HAWK-I, Tax Credits, and Cost Sharing Subsidies. Applicants shopping for insurance on the Marketplace will have the choice of multiple private insurers. 11

Who can use the Marketplace? Anyone can use the Iowa Health Insurance Marketplace. Only people who meet certain income, and health coverage conditions can qualify for government programs and tax credits. If you’re interested you can apply and see if you qualify for any help. 12

Medicaid Provides medical coverage for certain people. Medicaid is available to low income persons who fall into certain eligibility groups; Children under 21 Parents with a child under 18 Pregnant women Certain women in need of care for breast & cervical cancer Persons over 65 If you are receiving nursing home benefits or are dual eligible. People who are blind or disabled Certain persons on Medicare People who meet social security disability requirements and are employed You may apply for Medicaid on the Marketplace Expanded Medicaid – Iowa’s Waiver Program : Iowa Health and Wellness and Marketplace Choice 13

HAWK-I Covers Children who live in families with incomes below 300% of the federal poverty level. To qualify you must; Be under 19 Have no other health insurance Live in Iowa Be a U.S. citizen Not qualify for Medicaid Not be a dependent of a State of Iowa Employee Provides medical services for free or very limited cost. Monthly fees range from $0 to $40 per month. You may apply for HAWK-I on the Marketplace. 14

What will insurance plans on the Marketplace Look Like? Benefits will include Prescription drugs Emergency services Hospitalization Maternity & newborn care Pediatric services Laboratory Services Ambulatory Patient Services Mental health & substance abuse services Rehabilative & habilative services and devices Preventative & wellness services and chronic disease management 15

What will insurance plans on the Marketplace Look Like? Bronze - Lowest premium and highest out of pocket costs. Cost sharing of 60% paid by insurer and 40% by the individual. Silver - Lower premiums than gold and platinum, but with higher out of pocket costs. Cost sharing of 70% paid by insurer and 30% by the individual. Gold - Lower premiums than platinum, but with higher out of pocket costs. Cost sharing of 80% paid by the insurer, and 20% by the individual. Platinum - Highest premium with lowest out of pocket costs. Cost sharing of 90% by insurer, and 10% by the individual. Catastrophic Plans – Certain people up to the age of 30 may select to purchase plans with very high deductibles and low premiums. 16

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Federal Poverty Level Guidelines (FPL) Household Size 100%133%150%200%300%400% 1$11,490$15,282$17,235$22,980$34,470$45,960 2$15,510$20,628$23,265$31,020$46,530$62,040 3$19,530$25,975$29,295$39,060$58,590$78,120 4$23,550$31,322$35,325$47,100$70,650$94,200 5$27,570$36,668$41,355$55,140$82,710$110,280 6$31,590$42,015$47,361$63,180$94,770$126,360 7$35,610$47,361$53,415$71,220$106,830$142,440 8$39,630$52,708$59,445$79,260$118,890$158,520 Each Additional Person $4,020$5,347$6,030$8,040$12,060$16, * Based on Modified Adjusted Gross Income If you income and household size fall within this chart you may get benefits.

Modified Adjusted Gross Income? Modified Adjusted Gross Income is the amount of gross income earned, with a few things added in and deducted. There are some deductions taken away, such as business expenses. There is some money that is normally non-taxed added in, such as non-taxable interest. The take away is that if you are near the income cut off, you still might qualify for assistance. The only way to find out is to apply. 19

Health Premium Tax Credits Certain people may qualify for tax credits to help them purchase insurance They must: Have a household Modified Adjusted Gross Income between 100% and 400% of the federal poverty guidelines. Not have Minimum Essential Coverage from some other source. Be lawfully present in the U.S., and may not be incarcerated. Must purchase health insurance through the exchange. A person might still qualify for tax credits if coverage from their employer is not Affordable or does not provide Minimum Value. 20

What is considered Affordable under the law? What is Minimum Value? An Employer’s plan is Affordable if the cost to insure the employee only is less than 9.5% of the employee’s household income. An Employer’s plan provides Minimum Value if it covers 60% of the expected medical expenses. 21

How do I save with a Health Premium Tax Credit? The tax credit can reduce what you owe in taxes OR what you pay for health insurance premiums. Tax Credit = cost of the Silver benchmark plan – a households required contribution. The Silver benchmark plan is the second least expensive Silver plan in the marketplace. 22

Example: Silver plans: A, B, C, and D. A costs $100 a month, B costs $110 a month, C costs $120 a month, and D costs $130 a month. B is the Silver benchmark. 23

Required Contribution? A household’s required contribution is a fixed percentage of the household income. This is a sliding scale based upon the annual income. (see table) The goal is to keep healthcare spending to a limited portion of a households income. Go to sidy-calculator/ to estimate your tax credit! % of FPLInitialFinal

Example 1 Household of 2 adults making $60,000 per year. Their required contribution is 9.5% or $5,700 per year. The Silver benchmark premium is $7,000 per year. $7,000 (Silver Benchmark) - $5,700 (Required Contribution) = Their Tax Credit = $1,300 $1,300 in Tax Credits 25

Example 2 Family of 4, two adults and two children making $40,000 annually. The Silver benchmark premium is $10,781, their required contribution is 5.89% or $2,650 per year. $10,781 (Silver Benchmark) - $2,650 (Required Contribution) = Tax Credit = $8,131 $8,131 in Tax Credits 26

Things to Consider with Health Premium Tax Credits The tax credit may be taken and applied towards any of the plans available on the market place. The tax credit may be applied monthly towards your insurance premium to reduce the monthly premium or taken at the end of the year as a lump sum. The tax credit amount is based off of the cost of the Silver benchmark plan. The amount of the tax credit is capped at the cost of the actual plan purchased. 27

The Final Tax Credit is Figured at the End of the Year If you overestimate your income you may get a refund at the end of the year. If you underestimate your income you may owe the government money. The amount you need to pay back is limited by income and household size. (see table*) If your income changes during the year, let the Marketplace know! FPL %SingleFamily Less than 200% $300$ %-300%$750$1, %-400%$1,250$2, *26 CFR 1.36B-4(a)(3)

Cost Sharing Subsidies If a consumer is enrolled on a Silver plan they may qualify for cost sharing subsidies to decrease their share of costs. 29 Federal Poverty LevelCoveredConsumer Pays Normal Silver for 250%+70%30% 200% to 250%73%27% 150% to 200%87%13% 100% to 150%94%6$

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How do I sign up? Go to or call You can only enroll in a plan during Open Enrollment or Special Enrollment. Open Enrollment for the first year is from October 1 st 2013 till March 31 st, Open Enrollment for 2015 starts October 15 th 2014, through December 7 th If you don’t sign up during the open enrollment you might be able to sign up during a Special Enrollment period. 31

Special Enrollment Period  May enroll or change Qualified Health Plan Within 60 days in individual market and 30 days in small group market from qualifying event Special Enrollment Period Qualifying Events Loss of minimum essential coverage Material contract violations by Qualified Health Plans Gaining or becoming a dependent Gaining or losing eligibility for premium tax credits or cost sharing reductions Gaining lawful presenceRelocation resulting in new or different Qualified Health Plan selection Enrollment errors of the MarketplaceExceptional circumstances* 32 * May be granted on a case by case basis.

What if I need help signing up? Navigator Certified Application Counselor Funded by federal grants to help people enroll in the marketplace Cannot have a conflict of interest Must provide information in an impartial manner Must provide consumer education and outreach programs Must be trained and have passing scores on certification test May not charge a fee for their services Volunteers Must disclose any potential conflicts of interest to applicants Must act in the best interest of the applicant Must complete trainings and receive passing scores May not charge for consumer services 33 Their job is to help people select insurance plans. Must be trained in health insurance Must be licensed by the state of Iowa Must act in the interest of their clients. Insurance Agents and Brokers

Other Sources of Help You can call the marketplace, Or you can shop online at healthcare.gov 34

Watch out for Fraud If you are suspicious about a request for personal information DO NOT GIVE IT OUT! The ONLY website for the Marketplace is healthcare.gov If you get a suspicious phone call. DO NOT give out your personal information. Call the Marketplace and let them know

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Other Consumer Protections Under the Healthcare Reform Coming in 2014 Health Insurance Companies cannot refuse to cover you during open enrollment. They can’t charge you more because you have chronic or pre-existing conditions. They can’t charge more for women than men. 37

What Can Affect My Insurance Rates? Insurance companies can now only vary their rates based upon; 1. Age (limited ratio of 3 to 1) 2. Tobacco Use (limited ratio of 1.5 to 1) 3. Number of person on the policy 4. Where you live 38

Additional Consumer Protections These Reforms are in Effect Plans must be presented in a uniform manner to make easy “apple to apple” comparisons of coverage. Medical Loss Ratio Rebates Dependant coverage extended up to age 26. Insurers may only rescind policies in the case of fraud Insurance Companies can no longer set lifetime or yearly spending limits. These Reforms are Coming in 2014 The waiting period to get on group plans is limited to 90 days. 39

When can an Insurance Company Cancel a Policy? If the consumer qualifies for Medicare If the consumer does not pay their monthly premiums If the consumer commits fraud on their application. If the policy is no longer offered or is removed from the Marketplace. 40

Things to Remember? All individuals will face a tax penalty if they don’t have minimum essential coverage and they don’t have an exception. Low and Middle income individuals may qualify for government programs or tax credits to help them get health insurance. The change in laws may expand the benefits you receive on new policies and it will change the way premiums are calculated. Open enrollment runs Oct.1, 2013 – March 31, 2014!!!!!!! Individuals may select Marketplace policies on healthcare.gov. 41

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Go to healthcare.gov to shop or enroll Call –2596 Presented By: State Interagency Team: Iowa Insurance Division Iowa Department of Human Services Iowa Department of Public Health 43