PPACA New Directions

Timeline Highlights 2012 Steps for 2012 from the previous chart W-2 Reporting W-2 Reporting MLR Refund (Not Listed) MLR Refund (Not Listed) Medical Device Fee Medical Device Fee SBC (Done by carriers) SBC (Done by carriers) 60 Day Advance Notice 60 Day Advance Notice

Timeline Highlights 2013 FSA's Reduced FSA's Reduced ER Ded for Medicare Rx ended ER Ded for Medicare Rx ended EDUCATION for New Hires EDUCATION for New Hires Quality Reporting Quality Reporting CER Fee CER Fee

First Real Deadline: Delayed Currently, the mandated Federal deadline for employers to notify employees about state- specific exchanges to be set up before 2014 by state governments (or by the federal government on the states’ behalf) has been delayed. Many expected that the exchange notification deadline would be extended, however, as the U.S. Department of Labor (DOL) hasn’t yet released proposed regulations or indicated whether it will provide a model notice.

Part 1 of 3 State exchange basics. This is a description of the state exchange, the services provided by the exchange and how to contact the exchange (website and customer service number). One wrinkle: not all states have decided how they’re going to comply (the National Conference of State Legislatures provides an up-to-date chart of state implementation efforts). Employers in multi-plan states will have an even more challenging time.

Part 2 of 3 Individual plan value This explains whether employees will receive at least 60 percent coverage of essential health benefits through employer-provided coverage, and whether employees may be eligible for a premium tax credit if they purchase a plan on the state exchange.

Tax implications. Because health insurance premiums under employer-sponsored coverage may be paid with pre-tax dollars, buying coverage through a state exchange may change an employee’s tax obligations. Employees using an exchange to purchase coverage may lose their employer’s tax-free contribution (if any) to their health coverage. Part 3 of 3

Impact on Small Businesses The District groups will have to purchase their coverage through the HBX The Health Benefit Exchange (“HBX”) Executive Board adopted recommendations to unify commercial small group and individual plans within the District’s Exchange insurance marketplace. Only Grandfathered plans will be allowed outside the HBX

Impact on Small Businesses Cont Implementation Prohibiting Discrimination Due to Pre-Existing Conditions or Gender. Eliminating Annual Limits on Insurance Coverage. Making Care More Affordable. Establishing Affordable Insurance Exchanges. Increasing the Small Business Tax Credit. Increasing Access to Medicaid Promoting Individual Responsibility.

Impact on Small Businesses Cont. The District’s HBX will provide transparency for selecting health coverage that does not currently exist by creating a single source to review price, quality, customer service information, and other consumer focused measures about all health plans available in the District.

Impact on Small Businesses Cont. Open enrollment for all HBX participants will begin on October 1, 2013 for plans that will be effective on January 1, Small business employers will be able to choose coverage in the Exchange through their existing broker or benefits manager during their regular renewal time. Grandfathered plans, those in place since March 23, 2010, will be exempted from operating in the District’s HBX insurance marketplace.

Tax Credit As an incentive for tax years 2010 through 2013, the maximum credit is generally 35% of the cost of covering employees, although it is 25% for tax-exempt employers. The tax credit increases on January 1, 2014 to 50% for most employers and 35% for tax-exempt employers.

Impact on Small Businesses Cont. There are no penalties for not offering coverage to employees for small businesses with 50 or fewer employees.

Funding of HBX The District of Columbia has been awarded over $82 million in grants from the federal government to help plan for and set up a health exchange for the District. The government officials held meetings in each ward to get resident input and conducted research on the best ways to set up the District’s Health Benefit Exchange. The District planning to be ready for residents and small businesses to sign up for health insurance through the HBX starting October 1, 2013.

Consumer Information Cont. On October 1, 2013, when the Health Benefit Exchange opens, it will be open only to individuals buying their own coverage and to the employees of D.C. small businesses (those with 1-50 employees) and their family members.

DC Producers (Insurance Agents & Brokers) The HBX Executive Board and all District agencies implementing the HBX are encouraging producers to and small business owners as well as non-profit organizations to participate in public meetings and working groups that occur no less than every other week. Producers are an intricate part of the success of the plan This will be a private & Government collaboration

Overview Prepare for questions and frustrations Identify resources for ideas and compliance Define roll of Agencies and Brokers Promote compliance and planning

Overview Prepare for questions and frustrations Identify resources for ideas and compliance Define roll of Agencies and Brokers Promote compliance and planning

Long-term goal Add value to client / broker relationships Promote compliance and smooth implementations Provide clear contextual answers Communicate ahead of the change

The Present Situation Plan sponsors and brokers are frustrated by being forced off the current system Change implementation is close to deadlines before being clearly understood Flow of income is at risk for all in the health delivery and insurance systems

Potential Alternatives Remain unclear and risky Looking at other countries the brokers' role may be at risk Brokers are needed more than ever Brokers role is being given attention

Recommendation Stay informed Keep a positive outlook on our future Add value to brokers and clients Ask lots of questions Do not encourage risky behavior

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