EDCOE BENEFITS WORKSHOP Jeremy M. Meyers, Superintendent Coleen M. Johnson, Executive Director, Personnel Services September 2014

My own prescription for health is less paperwork and more running barefoot through the grass. Leslie Grimutter 2

Part 1 Understanding Health Care Reform This information is provided based on our current understanding of the Act; it does not constitute legal advice. 3

Implementation of ACA The Patient Protection and Affordable Care Act was signed into law March 23, The Act requires: Every person has health insurance Insurance meets minimum coverage standards Insurance must be affordable Insurance is available to everyone and is available through employers, state exchanges, or Medicaid. 4

Implementation of ACA Some parts of the law have already been implemented, but many regulations are not final yet. What has already been implemented?  Dependent coverage to age 26. (2010)  Lifetime limits. (2010) Plans no longer have lifetime limits on essential health benefits.

Implementation of ACA continued  No cost sharing for Preventive Health Services. (2010) You and your family may be eligible to receive important preventive services with no co-pay or deductible. Examples include: blood pressure screening, cholesterol screening, type 2 diabetes screening, immunizations. 6

Implementation of ACA continued  Employers are required to report the value of employer health plans on W-2 forms (2012 year). The amounts reported are not taxable; the reporting is informational only.  Summary of Benefits and Coverage (SBC) must be available to employees to compare health plan offerings. (2012) This information can be obtained in our Personnel Services Department or on the CVT website. 7

Implementation of ACA continued PCORI Fees = Patient Centered Outcomes Research Institute Plan sponsors must pay a fee to help fund the PCORI based on the average number of covered lives under the plan (2012). $2 per covered life Ends in plan year ending September 30,

Implementation of ACA continued  State Exchange Notification. (2013) Employees must receive notification about the state Benefit Exchange. 9

ACA Implementation continued  Health Benefit Exchanges. (2014) Beginning January 1, 2014, state health insurance marketplaces began offering coverage options. These marketplaces are called “Exchanges”. California’s Health Benefit Exchange is called “Covered California”. 10

ACA Implementation continued Exchange Reinsurance Fee (2014) Insurers and plan sponsors must pay reinsurance fees to Health & Human Services. Purpose: stabilize premiums in the individual market during the first 3 years of the public exchange.  2014 estimated fee = $63 per covered life  2015 estimated fee = $44 per covered life 11

ACA Implementation continued  Open enrollment for Covered California began in October Coverage became effective January 1,  Individuals will be eligible to receive an advance tax credit (“subsidy”) to purchase from the exchange if their income is between 133% - 400% of the Federal Poverty Level.  Individuals eligible for coverage through employer sponsored plans are generally ineligible for premium assistance tax credits (unless the employer plan does not meet certain criteria). 12

ACA Implementation continued  Individual Mandate to Obtain Health Coverage Beginning January 1, 2014, most people over the age of 18 are required to have health insurance for themselves and their dependents or pay a penalty. This mandate will be monitored by the IRS. 13

What’s Next? continued  The Free Rider Penalty Effective January 1, 2015: Rule #1: –Employers must offer health coverage to at least 95% of full-time employees (working 30 hours or more per week or 130 hours per month) and their dependents (children up to age 26). EDCOE already offers health coverage to 100% of its regular employees working 20 hours per week or more. 14

What’s Next? continued Rule #2: Employers must offer at least one affordable plan that provides at least 60% of the cost of covered services. Affordability = an employee’s contribution for employee only coverage equals less than 9.5% of their income. All of the plans offered by EDCOE meet this minimum value test of 60% (“actuarial value”). CVT has two plans (Blue Cross and Kaiser “Bronze” plans) that provide this minimum value. 15

What’s Next? continued  Health Coverage and Workforce Reporting Employers will be required to submit detailed reports to the IRS regarding each employee’s health coverage. (2015 calendar year – due January 2016) 16

What’s Next?  Automatic enrollment Employers will be required to automatically enroll newly eligible full-time employees in employer sponsored health coverage. EDCOE/CVT already requires full-time employees to enroll in health insurance. Implementation has been delayed pending final regulations. 17

Part 2 CVT Plan Updates

First let’s review some basic terms… Annual Deductible – the amount an employee pays for services before the plan begins to pay Co-insurance – the employee’s share of costs expressed as a percent (80/20 plan means the employee pays 20% of the cost for services plus any deductible) Co-Pay – a fixed amount paid for a covered service ($20 per office visit) Maximum Out-of-pocket – the most an employee pays during the year before the plan begins to pay 100% of the covered amount Preferred Provider – a health care provider who contracts with the health insurer to provide services at a discount 19 Common Terms

California’s Valued Trust 20 EDCOE is a member of California’s Valued Trust (CVT). CVT is California’s largest self-funded public schools trust specializing in healthcare benefits for the education community. CVT is governed by equal representation from management, CTA and CSEA members. CVT Basic Healthcare Information:

CVT Changes for Rate Increases Anthem Blue Cross PPO Plans: +1.4 – 4.8% Kaiser Permanente: +8.6%. -2.9% for Delta Dental +2.7% for VSP Health care reform fees 1 contributed to 1% of the PPO rate increases and 2% of the Kaiser rate increases for Patient-Centered Outcomes Research Institute (PCORI) Fee and Transitional Reinsurance Fee 21

CVT Changes for No annual dollar maximums for all covered expenses Maximum out of pocket (OOP) limits for medical and pharmacy plans have changed per ACA ACA yearly limit on cost sharing $6,350 for individuals $12,700 for families PPO plans - now includes deductibles, coinsurance, medical, pharmacy co-pays Kaiser - now includes deductibles, coinsurance, medical co-pays 22

CVT Changes for Pharmacy Co-Payment Benefit Enhancement –Available for members participating in Alere or Accordant Health Management Programs 1 –“Pharmacy step down” = reduced pharmacy co-pays for certain condition-related prescriptions for members enrolled in Alere or Accordant Health Management Program 1 Programs designed to support patients with chronic diseases 23

Anthem Blue Cross Bronze Plan New in Offered to meet the requirements for the Affordable Care Act mandate for minimum coverage Available to all units in EDCOE –Deductible: $5,000 individual/$10,000 family –70/30 coinsurance $6,350 individual/12,700 family –First 3 office visits $60 copay, remaining visits subject to deductible and coinsurance –Prescriptions are subject to deductible then $25 Generic/$50 Brand –Not compatible with a Health Savings Account 24

Kaiser Bronze Plan Offered to meet the requirements for the Affordable Care Act mandate for minimum coverage Available to CSEA, Charter, Management staff –Deductible: $4,500 individual/$9,000 family –60/40 coverage after deductible –Calendar year out of pocket max = $6,000 individual $12,000 family –Prescriptions are not subject to deductible – Generic covered at 70% (not to exceed $50) –Includes vision care 25

Online Benefit Calculator 26

Delta Dental Eligible employees – 20 hours per week 100% employer paid premium (for full-time employees) Basic coverage – 70% of approved fees for covered services Copay percentage increases by 10% each year (up to 100%) if enrollee visits the dentist at least once each year Implants now part of the basic benefit paid at 50% Delta Dental

Vision Service Plan For full-time eligible employees, 100% employer paid premium.* Basic coverage: ($15.00 copay each plan year) Exam every 12 months Lenses every 12 months Frame every 24 months Contact lenses - $50.00 copay Frame allowance is now $150 vsp.com

Employee Assistance Plans Provide free confidential counseling, education, and referral to employees and their family members. Mental health services Legal guidance Financial guidance Work/life services (referrals for child care, adult care, academic service providers) ValueOptions MHN (code: sia) 29

Take advantage of free screenings and immunizations Register and use Telemedicine (MDLIVE) for non-emergency situations Use the Benefit Calculator to be sure the plan is the best fit for the family based on usage Use the Section 125 option for pre-tax premium deductions Consider higher deductible plans or a Wellness Plan 30 How Can Employees Get the Most for their Money?

Questions Coleen Johnson, Executive Director –(530) – Sharon Cooper, Employee Benefits Technician –(530) – 31

Resources 32 Blue Cross - Covered California - CVT - EDCOE’s benefit calculator ––

Resources continued Delta Dental - Healthcare.gov - Kaiser - Kaiser Family Foundation - VSP

Looking after my health today gives me a better hope for tomorrow. Anne Wilson Schaef 34