kynecting to Insurance Kentucky Primary Care Association November 7, 2013

2 Presentation to Federally Qualified Health Centers

3 States must allow groups with less than 100 employees into Exchanges Administrative Simplification begins to phase in Summary of Benefits and Coverage Exchange coverage notice Increase Medicaid payment for primary care doctors Benefit coverage changes o Preventive Care at 100% in network o Children under age 26 o No pre-existing conditions under age 19 o No lifetime / annual dollar limits on essential benefits o Patient protections Affordable Care Act: Timeline Overview of the ACA and kynect Individual coverage mandate Individual subsidy State Exchanges operational Rating rule changes Essential health benefits Medicaid expansion

4 Affordable Care Act: Notable Impacts Overall Impacts: Introduces new consumer protections Improves quality of healthcare Increases access to affordable healthcare Reduces the overall growth rate of healthcare spending Introduces changes to Medicaid and Medicare Offers small business owners a chance to receive tax credits for providing coverage Requires individuals to have health insurance coverage beginning in 2014 Major impacts on states: Ability to implement a new health insurance marketplace: Health Benefit Exchange o Exchanges are designed to make comprehensive health insurance plans available to qualified individuals, including small businesses and their employees, the Federal Government is calling this a Marketplace. Overview of the ACA and kynect

5 Improving Quality, Lowering Cost and Increasing Access to Affordable Care Mandates inclusion of preventive care coverage Provides relief for seniors who hit the Medicare Prescription Drug “Donut Hole” Requires that 80 cents / premium dollar must be spent on care Rebuilds the primary care workforce Increases Medicaid payments to primary care doctors Improves Medicaid and KCHIP Establishes state Health Insurance Exchanges for consumers to shop for health plans Through Exchanges, identifies affordability programs including Medicaid, CHIP, and tax credits for private insurance plans that consumers may be eligible to receive Affordable Care Act: Notable Impacts, continued Overview of the ACA and kynect

6 Affordable Care Act: Insurance Market Reforms The ACA included a number of insurance market reforms also intended to increase access to affordability of health coverage: Prohibits pre-existing condition exclusion for children Allows young adults up to age 26 to remain on parents’ health plan Ends the practice of rescinding health coverage Overview of the ACA and kynect

7 Paths to Coverage through kynect Even if a consumer thinks they know what IAP(s) they are eligible for, applying for health insurance through kynect will show them any and all IAPs that apply to them. Medicaid is a health program that is funded by both state and federal governments. This was enacted in Medicaid The Kentucky Children's Health Insurance Program (KCHIP) is free or low-cost health insurance for children. KCHIP A Qualified Health Plan (QHP) is a health plan that is subject to a specified list of requirements related to marketing, choice of providers, plan networks, essential benefits, and other features. QHP The Advanced Premium Tax Credit (APTC) provides assistance for purchasing health insurance. Cost Sharing Reductions (CSR) provide assistance for payment of healthcare services received by individuals. QHP with APTC / CSR Paths of Coverage

8 The pre-screening process is a tool that determines the potential eligibility for IAPs. The information is entered anonymously and results are not saved. Potential eligibility is based on minimum information entered by the individual (including age, gender, and household income). This process gathers household information and individual information from the SSP module to determine potential eligibility. No verification of an individual’s information is performed during the pre-screening process. The Pre-Screening Process – Eligibility Determination kynect Policy & Procedure Instructor-Led Training Lesson 5: Paths of Coverage

9 The Pre-Screening Process – Pre-Screening Assumptions An individual must be a resident of or intend to reside in the Commonwealth of Kentucky and must be a citizen or lawfully present in the United States. These are not verified during the pre-screening process. Family size is defined as the number of Individuals in the household. For pregnant women, the number of expected children is added to the family size. A disclaimer will appear with the pre-screening results stating that if medical expenses are greater than income, then the individual may still be eligible for assistance. Cost Sharing Reduction eligibility is not included in the pre-screening eligibility tool. The following assumptions have been made in regard to the eligibility pre-screening process: kynect Policy & Procedure Instructor-Led Training Lesson 5: Paths of Coverage

10 The Pre-Screening Process – Pre-Screening Eligibility Rules Paths of Coverage MAGI Medicaid Eligibility will be determined based on the following categories: Parents and caretaker relatives Pregnant women Children under 19 Adults age with income less than 133% of the FPL KCHIP KCHIP provides coverage to qualified children meeting the following criteria: Children age 19 and under with income equal to or less than 213% of FPL who are not eligible for Medicaid.

11 The Pre-Screening Process – Pre-Screening Eligibility Rules Paths of Coverage Qualified Health Plans (QHPs) Individuals will be eligible to purchase QHPs by meeting the following criteria: Resident of Kentucky Note: QHPs are private insurance and not a form of Medicaid. QHPs with APTC The criteria to receive a QHP with APTC is: Not Eligible for Medicaid, KCHIP, Medicare or other minimum essential coverage Income between % of FPL

12 Essential Health Benefits The Essential Health Benefits are: Ambulatory patient services, Emergency services, Hospitalization, Maternity and newborn care, Mental health and substance use disorder services, including behavioral health treatment, Prescription drugs, Rehabilitative and habilitative services & devices, Laboratory services, Preventive and wellness services and chronic disease management, and Pediatric services including oral and vision care General insurance information

13 Kentucky Health Benefit Exchange regulations require the following individuals to have pediatric dental essential health benefits. There are two possible ways to purchase the pediatric dental essential coverage: Additional Requirements – Dental Insurance on kynect Individuals under age 21 These plans may offer adult dental coverage in addition to the required pediatric dental coverage. Stand alone dental plans Plans that include pediatric dental coverage are considered plans with “embedded” dental coverage. Managed Care Organizations (MCO) will always contain a pediatric dental benefit. QHP w / Dental Pediatric Dental

14 Individual Coverage Options and Qualified Health Plans All individuals and / or households that buy coverage via kynect will have a cap (maximum amount) placed on their total possible out-of-pocket spending. Out-of-pocket spending includes the following expenses that are associate with healthcare: The amount owed by an insured person for a healthcare service covered by the person’s health plan before the health insurance plan begins to pay. Deductible An insured person’s share of the costs of a covered healthcare service, calculated as a percent of the amount of the service. Coinsurance General insurance information The amount that must be paid for an individual’s health insurance or plan. Premium Note: Premiums are out-of-pocket expenses but do not contribute to an individual’s out-of-pocket maximum. A fixed amount for a covered health service, usually when the service is accessed. The amount can vary by type of covered service. Copay

15 Actuarial value is the percentage of total average costs for Essential Health Benefits that a plan will include. For an average population actuarial value represents the share of healthcare expenses the plan covers for a typical group of enrollees For example, if a plan has an actuarial value of 70%, on average, an individual would be responsible for 30% of the costs. However, the individual could be responsible for a higher or lower percentage of the total costs of covered services for the year, depending on their actual healthcare needs and the terms of their insurance policy. The premium tax credits we have been discussing are generally based on a plan with an actuarial value of 70%. Actuarial Value Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

16 QHPs – How Actuarial Value and Premiums Relate Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR) Actuarial Value Dollars The Impact on the Standard Consumer - Generally higher premiums as actuarial value increases - Generally lower deductibles as actuarial value increases - Generally lower copays and coinsurance rates as actuarial value increases Deductibles Premiums Copays / Coinsurance

17 MAGI is the methodology that uses federal income tax rules and concepts to: Count income Determine household composition and family size Federal income tax rules and concepts of adjusted gross income (with some modifications) are used, but it is NOT simply a number off a tax return Modified Adjusted Gross Income (MAGI) Methodology MAGI Medicaid Modified Adjusted Gross Income is NOT equal to net income on a tax return

18 The calculation of MAGI closely mirrors how the Internal Revenue Service (IRS) determines adjusted gross income for tax purposes WITH some modifications MAGI takes IRS’ Adjusted Gross Income, and “modifies” it by adding back in: o Tax exempt interest o Social Security income o Certain Foreign Investment income For Medicaid, this Modification excludes: o Scholarships / Grants for educational purposes o Certain income of American Indian/Alaska Native o Lump Sum Income (lump sum is only counted in the month of receipt) What is MAGI? MAGI Medicaid

19 The ACA requires a coordinated process for determining eligibility for all IAPs, including: 1.Medicaid 2.KCHIP 3.Advanced Premium Tax Credits (APTC) 4.Cost Sharing Reductions (CSR) kynect will consider eligibility for these programs, looking first to the most comprehensive programs, Medicaid and KCHIP, and then evaluate for APTC and CSR. Coordinating Eligibility Across All IAPS Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

20 Tax credits are not the same as tax deductions. Tax credits directly reduce an individual’s tax liability (dollar for dollar). Tax deductions reduce the amount of your taxable income, which is used to calculate your tax liability. What are Advanced Premium Tax Credits? APTC lowers the cost of insurance for eligible consumers by providing tax credits. What is a tax credit? Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR) APTC is called “payment assistance” on kynect

21 Available for individuals with income between % FPL. Must be a tax filerMust be a tax filer If married, filing jointly A Kentucky resident Citizen or lawfully present Must not be incarcerated Cannot be eligible for government insurance or affordable Employer-sponsored insurance Individuals earning less than 100% FPL may be eligible to receive APTC when denied Medicaid due to immigration status. APTC Eligibility Criteria Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

22 Individuals who fall into the following groups are ineligible for APTC: Undocumented aliens Taxpayers who are married filing separately Non-Tax filers Individuals who are eligible for Medicaid, Medicare, or any other government insurance Anyone with income below 100% and denied Medicaid for a reason other than immigration status. Individuals who have Affordable Employer-sponsored Insurance o Premiums are no more than 9.5% of the annual family income and the plan value covers at least 60% of the essential health benefit costs Individuals NOT Eligible for APTC Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

23 MEC is the minimum coverage an individual needs to have to meet the individual responsibility requirement under the ACA. Individuals that have health coverage that meets MEC, pre-ACA, will be in compliance with the individual responsibility requirement. Individuals ARE NOT eligible to receive APTC if they already have Minimum Essential Coverage, or are eligible for MEC as defined below: Eligible to receive Medicaid or KCHIP Eligible for programs such as Medicare, Peace Corps, VA Medical, or other qualifying programs (verified through the Federal Data Service Hub (FDSH)) The individual’s employer provides an affordable health plan Minimum Essential Coverage (MEC) and APTC Eligibility Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

24 The APTC amount is determined based on the second lowest cost silver plan, this plan is considered the benchmark plan. Premiums offered on kynect can only be adjusted by four factors Age Family Composition Geography Tobacco use The cost of the benchmark plan (second lowest Silver plan) for APTC calculation is adjusted by age, family composition and geography. It is not adjusted by Tobacco. The cost is then sent to the Federal Hub along with the family’s income and household size. Then the Hub determines the maximum APTC based on this information. The APTC Calculation Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

25 Individuals who fall into the following groups are ineligible for APTC: Undocumented aliens Taxpayers who are married filing separately Non-Tax filers Individuals who are eligible for Medicaid, Medicare, or any other government insurance Anyone with income below 100% and denied Medicaid for a reason other than immigration status. Individuals who have Affordable Employer-sponsored Insurance o Premiums are no more than 9.5% of the annual family income and the plan value covers at least 60% of the essential health benefit costs Individuals NOT Eligible for APTC Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

26 MEC is the minimum coverage an individual needs to have to meet the individual responsibility requirement under the ACA. Individuals that have health coverage that meets MEC, pre-ACA, will be in compliance with the individual responsibility requirement. Individuals ARE NOT eligible to receive APTC if they already have Minimum Essential Coverage, or are eligible for MEC as defined below: Eligible to receive Medicaid or KCHIP Eligible for programs such as Medicare, Peace Corps, VA Medical, or other qualifying programs (verified through the Federal Data Service Hub (FDSH)) The individual’s employer provides an affordable health plan Minimum Essential Coverage (MEC) and APTC Eligibility Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

27 The APTC amount is determined based on the second lowest cost silver plan, this plan is considered the benchmark plan. Premiums offered on kynect can only be adjusted by four factors Age Family Composition Geography Tobacco use The cost of the benchmark plan (second lowest Silver plan) for APTC calculation is adjusted by age, family composition and geography. It is not adjusted by Tobacco. The cost is then sent to the Federal Hub along with the family’s income and household size. Then the Hub determines the maximum APTC based on this information. The APTC Calculation Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

28 kynect calculates the amount of APTC by comparing the cost of the benchmark plan to the family’s maximum premium contribution limit. The difference = the APTC amount. The APTC Calculation (continued) APTC = Benchmark Plan Premium – Annual Premium Limit The cost of the benchmark plan is not adjusted by tobacco use, additional premium cost due to tobacco use, is the responsibility of the applicant. Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

29 Individuals who are determined eligible for and purchase a QHP with APTC must be informed that they must: Agree to file a federal income tax return File a joint income tax return with their spouse if they are married at the end of the year Attest that no one else will be able to claim them as a dependent on their federal income tax return Attest that they will claim a personal exemption deduction on their federal income tax return for any individual: Who is listed on the application as a dependent; Who is enrolled in coverage through kynect; and Whose premium for coverage is paid in whole or in part by APTC Tax Filing Requirements : Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

30 When the individual files their taxes at the end of the year, the taxpayer’s APTC will be reconciled by the IRS with what the taxpayer should have received (using actual household income and family size for the taxable year).  If the APTC was less than the actual premium tax credit, the individual will receive an additional credit to reduce their tax liability (for most this will mean an additional amount of refund).  If the APTC was greater than the actual tax credit, the individual will owe the excess as an additional tax liability. Reconciliation Because of the tax implications related to APTC it is important that we stress the importance that consumers REPORT ALL CHANGES. Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

31 Cost Sharing Reductions are intended to reduce the out-of-pocket expenses an individual must pay when obtaining medical services. CSR is only available for Silver plans purchased through kynect. A Silver plan is one that provides essential health benefits and has an actuarial value of 70%. All other metal level plans (Bronze, Gold and Platinum) will also have out-of-pocket maximums. However, consumers will not receive a CSR in these plans. CSR Plans Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

32 To be eligible for CSR, an individual must meet the following eligibility requirements* Enroll in QHPs Eligible to receive APTC The individual is enrolled in a Silver level plan (with income less than 250% FPL) Carriers receive funding directly from the government to buy down out of pocket expenses for qualified enrollees. *There is an exception to these requirements regarding American Indians or Alaskan Natives (AIAN) CSR Eligibility Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

33 CSR benefits are based on the income categories described below: Income is greater than or equal to 100% FPL and is less than or equal to 150% FPL Income is greater than 150% FPL and is less than or equal to 200% FPL Income is greater than 200% FPL and is less than or equal to 250% FPL The table below defines these values for consumers who purchase Silver level plans Categories of CSR Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

34 There are two separate types of CSR specifically for AI / AN who are members of a Federally recognized tribe or nation. 1.AI / AN are eligible for CSR (100%) at any metal level of QHP if their income is below 300% FPL, regardless of where they get their medical care. They must apply for the Income Affordability Programs to get this benefit. 2.While enrolled in a QHP, they are eligible for $0 cost sharing (no copays or deductibles) when getting services from Indian Health Services, a tribe or tribal organization, or through Indian contract health services - no matter what their income is. They do not have to apply for an IAP. CSR- American Indians / Alaskan Natives Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR)

35 Can an individual decline his Employer-sponsored insurance and be eligible for APTC / CSR? EXAMPLE: Joe has a gross household income of $ / month Joe’s employee premium is $ / month Effectively, Joe’s premium is 12% of his household income Yes, because the premium amount exceeds 9.5% of his income, Joe’s ESI is deemed to be unaffordable and Joe may disenroll from ESI, and apply for APTCs and Cost Sharing Reductions (CSRs) Advanced Premium Tax Credit (APTC) and Cost Sharing Reductions (CSR) Knowledge Check

36 Application Intake – QHP Special Enrollment “Triggering Events” Birth, adoption, placement for adoption or placement for foster care: Marriage, or an individual loses minimum essential coverage (MEC): Gaining coverage due to a qualifying event: Coverage effective on the date of birth, adoption, placement for adoption, or placement for foster care. Coverage effective on the first day of the following month. Coverage effective date will be the date of the event that triggered the special enrollment or the regular effective dates as described on the previous slide. Paths of Coverage The following life events will trigger a “special enrollment” period for individuals. Depending on the type of event, the effective coverage start dates will differ.

37 Medicaid has continual Open Enrollment period on kynect; however, applications made between December 16, 2013 and December 31, 2013 that result in eligibility in one of the new programs will have a start date of January 1, 2014 to coincide with the start date of the new eligibility group. Medicaid and KCHIP enrollment: Consumers will be able to gain as much as 3 months of retroactive coverage if the consumer states that they’ve had medical expenses in the previous 3 months. For individuals covered by the new groups, retroactive coverage cannot predate the start of the eligibility group. Application Intake – Effective Start Dates - Medicaid Paths of Coverage

38 Exemptions from the requirement to have health insurance do exist. Exemptions from having to meet the minimum amount of coverage for individuals may be granted based on the following situations: Religious conscience Healthcare sharing ministry Indian tribes No filing requirement Short coverage gap Hardship Unaffordable coverage options Incarceration Not lawfully present Insurance Coverage Exemption Process Exemptions

39 October 1, 2013– Jan 1, 2014 Jan 1, 2015 March 31, 2014 Initial Open Enrollment Initial coverage starts Key Dates for kynect for Individuals – Health Insurance Overview of the ACA and kynect Annual Open Enrollment October 15- December 7

40 October 1, 2013– Jan 1, 2014 Jan 1, 2015 March 31, 2014 Businesses with less than 50 employees may offer plans from kynect to their employees Key Dates for kynect for Small Businesses – Health Insurance Overview of the ACA and kynect Initial coverage starts Annual Open Enrollment - 30 day continuous periods whenever the business chooses to initiate their enrollment

41 Questions?

42 Next webinar: November 21, am – 12 pm EST kynect FAQs and Tips Post your questions on the KyPCA kynection forum Lindsay Nelson