 2015  Will Arkansas be operating as a State Partnership Marketplace or will Arkansas become a State- Based Marketplace?  Implications for the Small Group Market and Small Employer Health Options Program (SHOP):  Employer or employee choice model  Active purchaser or market based Key Aspects for Employers

 New definition of Small Group moves to 100 employees in 2016  Rating rules apply to groups  Essential Health Benefits (EHB) package applies to groups  New way rates are built for groups  HHS has reserved the right to define “Essential Health Benefits” Package for 2016  May result in a standardized EHB in all 50 States  State waiver for private option ends in 2016 Known Changes to the Market beyond 2015

New Rating Methodology for in 2016  Gender rating removed  Industry rating removed  Common geographic rating established by regulators  Tobacco load nationally 50% (Arkansas 20%)  Health status and pre-existing conditions no longer considered  Age rating reduced from 6:1 ratio oldest to youngest to 3:1

Essential Health Benefits Prescription drugs Rehabilitative and “habilitative” services and devices Laboratory services Preventive and wellness services and chronic disease management Pediatric services, including dental and vision care Non-grandfathered small group health plans – offered on or off the SHOP, must provide these government-mandated essential health benefits Essential health benefits include services in the following 10 categories: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment

Premium Rate Calculation  Unique rate calculation for every member  Member-level, rather than employee-level, census required to comply  Every member on an employee contract has a unique rate  Rates developed for up to 3 minor children  4 th minor child (and any additional) is free  Children age 21+ must be rated as adults

2017 Marketplace  Marketplace can allow large groups (100+) to purchase through online marketplaces similar to SHOP for small employer groups.  Implications

 Essential Health Benefits Package  Employee Choice Model  Employer Open Enrollment Period “Large Group” Purchasing on Marketplace

 Self-Funding  Grandfathering  Defined contribution through private exchanges Employer Strategies to Stay “Outside Marketplace”

ACA Impact on Employer Group Coverage Cost

 Employee/Incentives to drive engagement (Wellness and Health Management Incentives/Programs)  Medical Home Models  Health Improvement Tools Employer Strategies to Control Costs

 Management of “pre-crisis” chronic conditions – new models of Case Management  Focused Provider Panels  Home Monitoring, Electronic Health  Reference-based pricing  Onsite health care  New payment mechanism Employer Strategies to Stay “Off Exchange” and Control Costs

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