1. Rhode Island Exchange Planning March, 2012 Deb Faulkner Faulkner Consulting Group

2. Agenda Exchange Context Exchange 101 Implications for Employers
What is an Exchange?
Who will use Rhode Island’s Exchange?
RI Exchange Status
Implications for Employers
Is it really funding basics? Do you mean the schedule and timeline?

3. Exchange Context
Federal reform, post 2014, envisions affordable coverage for virtually all RIers, through the following elements:
Individual Mandate requiring that all Rhode Islanders purchase affordable health insurance
Medicaid Expansion to all RI citizens under 133% FPL (childless adults)
Commercial Market Reforms Making health insurance accessible to all, leveling the playing field
Exchange Offering federally subsidized and unsubsidized coverage for individuals and small businesses

4. RI Health Benefits Exchange
Rhode Island Executive Order established the RI Health Benefits Exchange as a division within the Executive Agency
Ex-Officio Members
Appointed by the Governor
Small Business Rep
Director of DOA
Consumer Rep
Director of Health
Former Health Insurance Executive
Labor
Director of Administration
Director of Health
Consumer Rep
Consumer Rep
E-Commerce Expert
Former US Attorney (with hospital system expertise)
Former Delivery Sys Governance
Small Business Rep
Commissioner of Health Insurance
Commissioner of Health Insurance
Secretary of EOHHS
Small Business Rep
Small Business Rep
Physician (not currently practicing)
Former Insurance Executive
Labor

5. Agenda Exchange Context Exchange 101 Implications for Employers
What is an Exchange?
Who will use Rhode Island’s Exchange?
RI Exchange Status
Implications for Employers
Is it really funding basics? Do you mean the schedule and timeline?

6. Why establish an Exchange?
Mission The Rhode Island Health Benefits Exchange will serve as a robust resource for Rhode Islanders and Rhode Island businesses to learn about and easily compare the quality and affordability of their health insurance options, enroll in coverage and, if eligible, access subsidies for coverage.

7. RI Exchange Goals Improve the health of Rhode Islanders
Achieve near universal coverage
Favorably impact health insurance cost trends
Favorably impact health care delivery system effectiveness and efficiency
Add value to employer health insurance purchasing

8. Exchange Web Portal: Massachusetts

9. Rhode Islanders seeking Health Insurance
The RI Health Benefit Exchange
A robust marketplace for all Rhode Islanders
Rhode Islanders seeking Health Insurance
Medicaid eligible individuals
Subsidy eligible individuals
Individuals (self pay –
no subsidy)
Employees of Small Employers
Employees of Large Employers
(1) Web Portal: a robust marketplace for all Rhode Islanders to identify health insurance options and purchase coverage
(2) Help Rhode Islanders Choose Health Insurance Display insurance options in an easy to understand, highly interactive web page
(3) Enroll Determine eligibility, enroll in coverage, &
facilitate subsidy

10. Post 2014: Exchange Users
RI anticipates three categories of Exchange users
Shop through Exchange:
901,000
(check affordability, compare prices)
Employer-Based
Individual
Medicaid (1)
Use Exchange to Determine Eligibility: 256,000
Ind.
Medicaid (1)
Employer-based
Ind.
Enroll through Exchange: 81,000
(1) Medicaid totals do not include 17,000 Medicaid eligibles over 65 who will also use the system.
Source: Preliminary estimates of post-2014 volume , modeled using CPS, DHS, OHIC, ACS and MEPS data and estimates of undocumented immigrants.

11. Exchange Project Status
Achieving our mission requires an aggressive change initiative impacting: 
Policy: business policy, practices and processes
Operations: people, roles & organizational structures
Technology: the systems that support the new policies & practices
Use Mission

12. Agenda Exchange Context Exchange 101 Implications for Employers
What is an Exchange?
Who will use Rhode Island’s Exchange?
RI Exchange Status
Implications for Employers
Is it really funding basics? Do you mean the schedule and timeline?

13. Implications for Employers
Key Elements of ACA: Implications for Employers
Individual Mandate
Employer Penalties (over 50), Tax Credits (Under 25)
Commercial Market Reforms
Essential Health Benefits
Exchange: SHOP (Small Business Health Options Program) Individual Exchange

14. Next Steps
Less than 18 months from today - need fully operational exchange
Fall 2012
“Operational Readiness”
January 2013
Achieve certification
Summer 2013
Soft Launch
October 2013
Open enrollment begins
December 2014
Exchange Establishment funding ends
December 2015
Medicaid funding (90% federal match) ends
Use updated deadlines from Meg – no legislation (we used executive order, in september I believe). Can call Applying for implementation funds October, Add gate review, technology RFP

15. Backup

16. Exchange Principles Exceptional Customer Experience Simplicity
Affordability
Flexibility
Transparency
Fiscal Prudence
Alignment with other governmental health reform initiatives
Catalyst

17. Small Employer Tax Credits
Small employers will need to purchase insurance through the SHOP Exchange to access tax credits.
Who is Eligible Employers with <25 employees with average wages of up to $50,000
Amount of Credit Sliding scale up to 50% of the amount they contribute toward insurance premiums
SHOP Requirement (after 2014) In order to receive the credit after 2014, small employers must purchase through the state’s SHOP Exchange.
Timing Credits are available starting in Employers may only receive the credit for 2 years after 2013.
Source: Health Policy Brief: Small Business Tax Credits, Health Affairs, Jan 14, 2011, Robert Wood Johnson Foundation

18. Employer Penalties
Beginning in 2014, some small businesses may have to pay a penalty if they do not offer affordable coverage.
Who Businesses with 51 or more FTEs
Penalty $2,000 per employee (excluding the first 30 employees) if they do not offer coverage for employees who average 30+ hours per week.1
Coverage Must cover at least 60% of the actuarial value of the cost of benefits.
Affordability Requirement Employee’s premium cannot exceed 9.5% of their household income.
If not, employees may purchase insurance on their own through the exchange using tax credits.
Employers will either pay $3,000 per employee receiving the tax credit, or $2,000 per employee excluding the first 30 workers (whichever is less).
1 Note that there is no penalty for part-time employees not offered coverage.
Source: Kaiser Family Foundation employer penalty flowchart

19. Individual Mandate
Who is exempted from the requirement to purchase insurance?
Religiously opposed to acceptance of benefits from a health insurance policy
Undocumented immigrants
Persons who are incarcerated
Members of an Indian tribe
Income below the threshold requiring filing a tax return ($9,350 - individual, $18,700 - family)
Anyone who has to pay more than 8% of income for health insurance, after taking into account any employer contributions or tax credits.
What insurance coverage is acceptable?
Medicare/Medicaid/CHIP
TRICARE or veteran’s health program
A plan offered by an employer
Insurance bought directly that is at least at the Bronze level
A grandfathered health plan in existence before the health reform law was enacted
What is the penalty for not having insurance? 1
2014: $95/adult, $47.50/child ($285 family max) or 1% of family income, whichever is greater
2015: $325/adult, $162.50/child ($975 family max) or 2% of family income, whichever is greater.
2016 and Beyond: $695/adult, $347.50/child ($2,085 family max) or 2.5% of family income, whichever is greater. After 2016, penalty amounts are increased annually by the cost of living.
Source: Kaiser Family Foundation individual mandate flowchart
1 The penalty is pro-rated by the number of months without coverage, though there is no penalty for a single gap in coverage of less than 3 months in a year. The penalty cannot be greater than the national average premium for Bronze level coverage in an Exchange .

20. Context: Commercial Reforms
Making health insurance accessible to all, leveling the playing field
Young adults on parents’ coverage
Pre-existing condition protections
New restrictions on rate factors
“Essential benefits”

21. Starting Point Under 65 RI Population: Current Health Insurance Status
Total = 901,000
(1) Medicaid total does not include 17,000 eligibles over 65.
(2) Chart uninsured total based on ACS 2009 data. ACS data for 2010 shows 126,000 uninsured, mostly at lower incomes.
Source: Census Bureau American Community Survey 2009, RI Medicaid, Commercial insurance data as reported to OHIC, Large Group/SI includes both carrier reported data and additional subscribers based on ACS data for total privately insured population.

22. Work to Date: Policy Populations Served How Best to Serve Individuals
How Best to Serve Small Businesses
I changed this entirely, if you hate it lets change it back…agree this was super hard and I might have given too much

23. Work to Date: Operations
Detailed workplan for operationalizing RI’s Exchange by 2014
Business requirements
Business process design focused on efficiencies across agencies, improved consumer experience

24. Work to Date: Technology
Translating business requirements into technical requirements
Technology “Gap Analysis”
New England Collaborative – Innovator grant