Association Insurance Cooperative PPACA 2013 – 2014 Summary Handouts: Click HereClick Here

Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Qualified Health Plans (QHPs) State Essential Benefits Package Option Qualified Health Plans (QHPs) State Essential Benefits Package Option PPACA Topology Large/Small Employer Employer Penalty Flow Chart Pay or Play Strategies by Employer Size

Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Qualified Health Plans (QHPs) State Essential Benefits Package Option Qualified Health Plans (QHPs) State Essential Benefits Package Option PPACA Topology Large/Small Employer Employer Penalty Flow Chart Pay or Play Strategies by Employer Size

Essential Health Benefits To be defined by regulations, but they include minimum benefits in ten general categories and the items and services covered within those categories: 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 and devices Laboratory services Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care.

Employer Must Comply With Cost-Sharing Limits The four prescribed coverage levels vary based on the percentage of full actuarial value of benefits the plan is designed to provide, as follows: Bronze: designed to provide benefits actuarially equivalent to 60% of full value; Silver: designed to provide benefits actuarially equivalent to 70% of full value; Gold: designed to provide benefits actuarially equivalent to 80% of full value; Platinum: designed to provide benefits actuarially equivalent to 90% of full value. The Kaiser Foundation estimates that the annual deductible for a bronze plan could range from $2,750 to $6,350 Affordable Premiums Individuals who get insurance through their employer can get subsidized coverage in an Exchange if their premiums are unaffordable (more than 9.5 percent of their household income) or the plan is inadequate (pays less than 60 percent of the cost of covered benefits).

Health Insurance Exchanges Qualified Health Plans (QHPs): An Exchange will be required to make qualified health plans (QHPs) available to qualified individuals and qualified employers. An Exchange cannot make available any health plan that is not a QHP. A qualified health plan (QHP) is an Exchange-certified “health plan” that offers an “essential health benefits package.” To provide the essential health benefits package, a plan must provide: essential health benefits; limit cost-sharing; provide either bronze, silver, gold, or platinum level coverage (that is, benefits that are actuarially equivalent to 60%, 70%, 80%, or 90% (respectively) of the full actuarial benefits provided under the plan

State Essential Benefits Package Option One of the three largest products in the small group market in the state ◦ New Mexico: Lovelace New Mexico: Lovelace One of the three largest health plans offered to federal or state employees The Health Maintenance Organization (HMO) with the largest commercial enrollment in the state

Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Qualified Health Plans (QHPs) State Essential Benefits Package Option Qualified Health Plans (QHPs) State Essential Benefits Package Option PPACA Topology Large/Small Employer Employer Penalty Flow Chart Pay or Play Strategies by Employer Size

Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Qualified Health Plans (QHPs) State Essential Benefits Package Option Qualified Health Plans (QHPs) State Essential Benefits Package Option PPACA Topology Large/Small Employer Employer Penalty Flow Chart Pay or Play Strategies by Employer Size

Putting the Numbers Together

Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Minimum Essential Coverage Minimum Value Health Insurance Premium Tax Credit Employer Shared Responsibility Payment Essential Health Benefits Compliance With Cost-Sharing Limits Affordable Premiums Disclosure of Return Information Qualified Health Plans (QHPs) State Essential Benefits Package Option Qualified Health Plans (QHPs) State Essential Benefits Package Option PPACA Topology Large/Small Employer Employer Penalty Flow Chart Pay or Play Strategies by Employer Size

Your Company is Grandfathered Grandfathered Health Plans – ACA Exceptions Grandfathered Plan: March 23, 2010 and not make any major changes in coverage Examples of changes in coverage that would cause a plan to lose grandfathering include: Eliminating benefits to diagnose or treat a particular condition. Increasing the up-front deductible patients must pay before coverage kicks in by more than the cumulative growth in medical inflation since March 23, 2010 plus 15 percentage points. Reducing the share of the premium the employer pays by more than five percentage points since March 23, Alternatives: Self-Fund; Defined Contribution Arrangement

Your Company Employs Under 50 FTEs No financial requirements to contribute toward workers’ health care costs Have most to gain under the ACA Tax credits for some to maintain or begin offering coverage started in 2010 ◦ Credit varies with employer size and average wage ◦ As of 2014 employer can only get them for 2 consecutive years; For 25 or fewer workers - max tax credit of 35% of employer contribution now, 50% starting in Small group health insurance market already has guaranteed issue – new insurance options through SHOP exchanges

Your Company Employs Under 50 FTEs Considerations: Those with Group Coverage – Group Insurance Rates Will Increase Significantly in plus FTEs – Self Fund with a comprehensive insurance carrier Defined Contribution Arrangement In 2014, employees earning less than 400% of the Federal Poverty Level ($92,000 for a family of four) per year who purchase a personal policy will receive a federal subsidy on their premium if their company doesn’t offer a group plan. o Every employer with less than 50 employees should switch from group coverage to simply giving employees tax-free allowances via an HRA to purchase their own individual policy. o Currently, employers and their employees can save up to 50% in 2013 by switching now to individual vs. group health insurance. Currently, employers and their employees can save up to 50% in 2013 by switching now to individual vs. group health insurance. o Large employers are already implementing Sears (60K FT/45K PT); Darden (olive Garden, Red Lobster)

Your Company Employs 50 to 100 FTEs Same option as smaller employers to purchase coverage through the exchanges Considerations: ◦ Play or Pay? ◦ Group Insurance Too Expensive ◦ High Deductible Health Plan + GAP ◦ Self-Fund ◦ Defined Contribution Arrangement

Your Company Employs 101+ FTEs Almost all currently offer health insurance - 90% in 2010 and coverage unlikely to change Same penalties as outlined for mediums No access to Exchange/SHOP options until 2017 Group Insurance Will Cost will Continue to Increase Expense Incurred Mini-Meds Gone 2014 Considerations: ◦ Play or Pay? ◦ High Deductible Health Plan + GAP ◦ Self-Fund ◦ Defined Contribution Arrangement

SELF-INSURED PLANS SELF-INSURED PLANS

DEFINED CONTRIBUTION PLANS DEFINED CONTRIBUTION PLANS

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