Health Insurance Marketplace Brochure

What to expect in 2014HealtH insuranceMarketplace

This guide will review:the ways purchasing health insurance in arizona is expanding

changes to health plan benefits • Essentialhealthbenefits • Actuarialvalue • Rating

What individual consumers need to know • Healthinsuranceoptionsforindividualsandfamilies • Costsharingreductionsandpremiumtaxcredits • Incomerequirementsforfederaltaxcreditsand

cost-sharingreductions • Penaltiesforuninsuredindividuals

What businesses need to know • Healthinsuranceoptionsforsmallgroupemployers • Healthinsuranceoptionsforlargegroupemployers • Taxesandfeesforbusinesses • BlueCrossBlueShieldofArizona(BCBSAZ)and

theneweraofhealthcare

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The Affordable Care Act (ACA) includes several provisions geared to extend greater access to health insurance benefits to more people. Beginning in 2014, most Americans must purchase a minimum amount of health insurance or be taxed by the government.

While there is a lot to be done before the ACA is fully implemented, this useful guide provides important information to help you understand the implementation of the ACA in Arizona.

Overview

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Thewayspurchasinghealthinsurance inArizonaisexpandingTheACArequireseachstatetooperateahealthinsurancemarketplace,alsoknownasanexchange,wherepeoplecanpurchasecoverage.Thehealthinsurancemarketplaceisanonlinesitewhereconsumerscan compareplansofparticipatinginsurersandpurchasehealthinsurance.TheU.S.DepartmentofHealthand HumanServices(HHS)runsthemarketplaceinstatesthatchoosenottocreateone,suchasthecaseinArizona.

Thosewhowishtocanstillbuyhealthinsuranceprivately—however,peoplewhodon’thaveahealthinsuranceplanofferedatwork,orwhocan’taffordit,maybeabletogetitthroughthefederalhealthinsuranceexchangestartinginOctober2013atopenenrollment.TheseplanswillbecomeeffectiveonJanuary1,2014.

Individuals and businesses now have more ways to purchase health insurance.

individuals 1. Directpurchasethroughabrokeror insuranceprovider

2. Thosewhoareeligibleandwishtoobtain afederalsubsidyorpremiumtaxcredit maypurchasehealthinsuranceonthe marketplace

3. Thosethatdonotqualifyforafederal subsidyorpremiumtaxcreditstillhave theoptiontopurchasehealthinsurance onthemarketplace

Businesses1. Directpurchasethroughabrokeror insuranceprovider

2. Employersmayuseabrokertoaccessthe SmallBusinessHealthOptionsProgram (SHOP)topurchaseahealthplanonline,or shopdirectforplans

3. Directpurchasethroughaprivate marketplaceoption

Themarketplacewillnotreplaceprivatehealthinsurance.Itissimplyanewplaceforqualifiedindividualsandemployerstoshopforandbuyit.

Brokersandnavigatorswillworkwithindividualsandsmallgroupemployerslookingforcoverageonthe marketplace.TheymayallowbrokersandnavigatorstohelppeopleenrollinQHPsorhelpthemwiththeir applicationsforpremiumtaxcreditsandcostsharingreductions.Asmoreguidanceissharedabouttheseroles,moreinformationwillbeprovided.

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ChangestohealthplanbenefitsInordertosellonthemarketplace,BCBSAZmustofferQualifiedHealthPlans(QHPs)intheindividualandsmallgroupmarkets.Thismeansourplansmustbecertifiedbytheexchangemarketplaceandmeetanumberofcov-erageandotherrequirements,includingaspecificsetofservicesanditemscalledEssentialHealthBenefits(EHB).

Additionally,theACArequiresQHPsofferedofftheexchangemarketplacetoofferstandardizedbenefits packagesintheindividualandsmallgroupmarkets.

Thesepackagesrepresentfourlevelsofvalue,whichmakesiteasiertocompareoptions.

aca requirements for QHps on the exchange marketplaceBeginningin2014,thesmallgroupandindividualinsurancemarketwillofferQHPs.UndertheACA,allnon-grandfatheredplansmustfollownewcoverageandbenefitrules,withrequirementsbasedon:

• Iftheplanisofferedinoroutsidethemarketplace• Iftheplanisfullyinsuredorself-insured• Groupsize

NotonlydoestheACAmandatethatnearlyall Americansmustpurchasehealthcare,thelawalso requireshealthinsurancetobe“guaranteedissue.”Thatmeansaperson(orfamily)can’tbedenied coverageorchargedmorebecauseofapre-existinghealthcondition.

Ratherthanestablishpremiumsbasedonhealthstatus,ratesfortheseindividualandsmallgroupplanswillbebasedonvariablesthatinclude:

• Familytier• Age• Geographicarea• Tobaccouse

Inaddition,thefederalhealthcarelawrequiresQHPstouse3-to-1age-ratingbands.Asaresult,thehighestpremiumcannotbemorethanthreetimesthelowestpremiumforthesameplan.Alloftheserequirementsmayhaveanimpactonrates,althoughthespecific effectsaredifficulttodefineatthistimeasQHPs continuetobedeveloped.

1. Ambulatorypatientservices2. Emergencyservices3. Hospitalization4. Maternityandnewborncare5. Mentalhealthandsubstanceusedisorderservices,includingbehavioralhealthtreatment6. Prescriptiondrugs7. Rehabilitativeandhabilitativeservicesanddevices8. Laboratoryservices9. Preventiveandwellnessservicesandchronicdiseasemanagement10. Pediatricservices,includingoralandvisioncare

“essential health benefits” will become essential components of coverage Whateverthelevelofcoverage,eachofthebenefitplanshastoincludewhatarecalled“essentialhealthbenefits.”AccordingtotheACA,anessentialhealthbenefitspackagemustincludeservicesanditemsinthese10broadcategoriesofcare:

*Healthcare.gov:Essentialhealthbenefits(accessedOctober2012).

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Sometimesreferredtoas“metalplans,”thedifferenttiersaredefinedbythepercentageeachplanwillpaytowardhealthcareexpensesforanaverageperson(knownastheactuarialvalue).Here’showthemetallevelsbreakdown:

Asanexample,aBronzeplanwillgenerallyhavethelowestmonthlypremiumandpay60percentof healthcareservices;enrolleesareresponsibletopay 40percentforhealthcareservicesthroughsome combinationofcostshares.Althoughcostshareswillbejust10percentforPlatinumplans,thistierwillalsohavethehighestmonthlypremium.

Mixing the metals HealthinsurersofferingQHPsmustofferatleastoneplanattheSilverlevelandoneplanattheGoldlevelonorofftheexchangemarketplace.Althoughnotarequirement,theyalsohavetheoptiontoofferachoiceofBronzeorPlatinumplans.Undereachmetalleveltherecanbeseveralplansavailable,whichwillvary accordingtothedeductibles,coinsuranceand copaysoffered.

Bronze

silver

Gold

Platinum

plans provide coverage60%plans provide coverage70%plans provide coverage80%plans provide coverage90%

Standard benefits package

Inside marketplaceOutside marketplace –

fully insured smallgroup and individual

Outside marketplace –fully insured large

group and self-insured

Include essential health benefits • •

Provide 60% actuarial value minimum • • *Adhere to deductible** and out-of-pocket maximum limits • •Comply with “metal levels” (actuarial values – (60, 70, 80 and 90 percent) • •Be certified by the marketplace throughwhich the plan is offered (certificationrequirement to be determined)

•

Out-of-pocket maximum requirements •

at-a-Glance coverage & essential Health Benefits

* Thehealthcarereformlawdoesnotrequirecarrierstoofferplanswithatleasta60percentactuarialvalue,nordoesitrequireemployerstoprovidehealthcoverage. However,itimposespenaltiesonemployerswith50+FTEsthatdonotprovideminimumcoverageifanemployeepurchasescoverageontheexchangeandreceives apremiumtaxcreditorcostsharingreduction.

**Deductiblelimitsapplytosmallgrouphealthplansonly

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1Keep their grandfathered plan 3Go uninsured and pay a

penalty, unless exempt2Buy a plan through either:• Theindividual

marketplace

• Directthroughbroker oraninsurer

WhatindividualconsumersneedtoknowHealth insurance options for individuals and families Consumerspurchasinginsuranceintheindividualmarketwillbeguaranteedcoverageforpre-existing conditions,andtheirpremiumscannotvarybasedontheirgenderormedicalhistory.Herearesomeoptions,benefitsandcriteriaforindividualsandfamiliespurchasinghealthinsurancein2014.

this online marketplace will allow consumers to: • Shopforandcompareavarietyofprivatehealthplans

• Getanswerstoquestionsabouthealthcoverageoptions

• Findoutifthey’reeligibleforhealthprogramslike MedicaidandtheChildren’sHealthInsuranceProgram, premiumtaxcreditsorcostsharingreductions

• Enrollinahealthplanthatmeetstheirneeds

Peoplewhopurchasecoverageinthemarketplaceareeligibleforataxcreditaslongastheirhousehold incomeis up to 400 percentoffederalpovertyguidelines.FiguresbasedonJanuary2013federalpovertyguidelines:

• Foranindividual,thatequals$11,490to$45,960peryear

• Forafamilyoffour,thatequals$23,550to$94,200peryear

Theassistanceamountthatapersoncanreceivevarieswithincome.Thetaxcreditmaybeappliedtoany planlevel(Bronze,Silver,GoldorPlatinum).

cost sharing reductions and premium tax credits for individuals Toaddresstheneedsofthosewhofallincertainincomelevelsandcannotaffordminimumessentialhealthbenefits,thelawincludesprovisionsforfederalsubsidiestoreducethecostofpremiums.

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Income requirements for cost-sharing reductions Thosewhoearnupto250 percentoffederalpovertyguidelinesandenrollat the Silver level onlymayalsobeeligibleforreducedcostsharing.Again,thesubsidyamountwillvaryaccordingtoincome.Examplesofcostsharingthatmaybereducedincludedeductibles,co-insurance,co-paymentsorsimilarchargesanddonotincludebalancebillingfornon-networkprovidersorspendingonnon-coveredservices.

penalties for uninsured individuals In2014,legalU.S.citizenswhodonotcarryaminimumamountofhealthcoveragewillreceiveapenaltyof$95oronepercentoftheirtaxableincome,whicheverisgreater.Penaltieswillincreaseeachyearthrough2016.Infutureyears,thepenaltieswilladjustannually.

penalty timeline

2014Greater of $95 or 1% of

taxable income

2015 Greater of $325 or 2%

of taxable income

2016 Greater of $695 or 2.5%

of taxable income

2017 and beyond Annual

adjustments

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1 2Offer a fully insured plan through either:

• ASHOPmarketplace

• Thetraditionalmarket

WhatbusinessesneedtoknowSmallbusinessesalsocanusethemarketplacetofindinsurancefortheiremployees.ThesearecalledSmallBusinessHealthOptionsPrograms,orSHOPs,forshort.IndividualinsuranceandSHOPprogramsmaybeavailableseparatelyorcombinedinasingleonlinemarketplace.

employers can opt to:

private marketplace for businesses BusinesseshaveanewwaytoshopforinsuranceandcontrolcostswiththeBCBSAZhealthplanmarketplaceanddefinedcontributionplans.Theseplanslettheemployerdeterminehowmuchtocontributetotheiremployees’benefits.Employeesthenapplythecontributionandshopfor10differentBCBSAZplansrightfromtheconvenienceofBCBSAZ’sprivateonlinemarketplace.

Key benefits:

• Monthlycontributionhelpskeepexpensespredictable• Streamlinebenefitsadministrationsavestimeandmoney• Retainthevaluehealthinsurancebringstoemployeerecruitmentandretention

Subsidies for small employers In2014,taxcreditswillincreaseforemployerswith25orfeweremployees(withanaveragewageoflessthan$50,000ayear)whooffercoveragethroughthemarketplace.

• Thecreditwillcoverupto50percentoftheemployer’scost(35percentforsmallnonprofitorganizations)• Employerswillbeeligibleforcreditsinthefirsttwoyearstheyoffercoveragethroughthemarketplace• Creditswilldecreaseonaslidingscaleasgroupsizeandemployeewagesincrease

* Smallemployerisdefineddifferentlyfordifferentpurposes.

** Penaltyriskmayapplytoemployerswith50+FTEs.

stop offering coverage and let employees buy an

individual plan in or outside the marketplace**

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1Offer health insurance (either fully insured or an administrative services

only [asO] plan) that meets the minimum coverage

definition and is affordable 3stop offering coverage, let employees buy insurance

through the individual marketplace, and risk the

employer penalty2Offer some level of coverage that does not meet minimum

requirements and risk the employer penalty

LargegroupemployersHealth insurance options for large group employers

penalties for large group employers

• Ifminimumcoverageisnotofferedtofull-timeemployees,andatleastoneemployeedoesnotmeetminimumvaluerequirementsgetssubsidizedcoveragethroughtheexchangemarketplace,thena$2,000penaltyisassessedforeachemployee(afterthefirst30)

• Ifminimumcoverageisofferedtofull-timeemployees,butisnotaffordableforanemployeeordoesnotmeetminimumvaluerequirements,andthatemployeegetssubsidizedcoveragethroughthemarketplace,thena$3,000penaltyisassessedforeachemployeewhoreceivessubsidizedcoverage

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OthertaxesandfeesIndividualsandemployersmayberesponsibleforothertaxesandfeesrelatedtothehealthcarereformlaw.Thechartbelowhighlightssomeofthem.

Tax/Fee Effective Date Responsible Party Annual Tax/Fee Amount

Comparative effectiveness research fee – thisfeefundsresearchontheeffectiveness,risksandbenefitsofmedicaltreatmentsthroughthePatient-Centered OutcomesResearchInstitute

Plan/policyyearsthatendafterSeptember30,2012,andbeginningbeforeOctober1,2019

Issuersoffully insuredplans

Self-insuredplan

ForplanyearsthatendduringOctober1,2012,throughSeptember30,2013,thisfeeis$1perparticipantperyear.

ForplanyearsthatendduringOctober1,2013,throughSeptember30,2014,thefeeincreasesto$2perparticipantperyear.

Afterthat,therateincreaseseachyearbythemedicalinflationrate.

Tax on high earners and unearned income – anannualtaxonwagesorunearnedincomeofmorethan$200,000forsinglesand$250,000formarriedcouples

TaxyearsbeginningJanuary1,2013,andlater

Individualtaxpayers 0.9%Medicaresurtaxonwagesinexcessof$200,000single/$250,000marriedcouples.

3.8%taxonunearnedincomefortaxpayerswithmodifiedadjustedgrossincomeinexcessof$200,000single/

$250,000marriedcouples.

ACA insurer fee – anannualexcisetaxonhealthinsurancetofundpremiumsubsidiesandMedicaidexpansion

TaxyearsbeginningJanuary1,2014andlater


Basedontheinsurer’smarketshareofnetpremiumswrittenbasedonthepreviousyear.Forexample,the2014feewillbebasedon2013premiums.

Totalfeeamounttobecollectedacrossallinsurersstartsat$8billionin2014andincreasesto$14.3billionin2018.

After2018thefeeincreasesannuallybasedonpremiumgrowth.

ACA reinsurance fee – thiswill supportthetransitionalreinsuranceprogramthataimstostabilizepremiumsforcoverageintheindividualmarketandlowerthe effectsofadverseselection

Plan/policyyearsbeginninginthe3-yearperiodstartingJanuary1,2014


Self-insuredplans

Fundswillbeusedtomakereinsurancepaymentstohealthinsuranceissuersthatcoverhigh-costindividualsinnon-grandfatheredindividualmarketplans.

High-cost insurance tax – anannualexcisetaxonhigh-costhealthplans

TaxyearsbeginningJanuary1,2018andlater


Sponsors/administratorsof self-insuredplans

Taxof40%onhealthplancoststhatexceed“Cadillac”planthresholdsof$10,200forsinglecoverageor$27,500forfamilycoverage.

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BCBSAZ has been hard at work for more than two years to implement the provisions resulting from the Affordable Care Act. We are working to develop qualified health plans that comply with the new 2014 benefit requirements the law sets forth.

Ensuring the value of our products has always been a core focus of our business, and BCBSAZ will continue to work constructively with state and federal officials to provide quality healthcare solutions.

BCBSAZandtheneweraofhealthcare

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Despite the maze of changes brought about by the federal healthcare law, at the end of the day your healthcare needs haven’t wavered.

As we have for more than 73 years, we stand prepared to provide our employers expert guidance and support, while continuing to deliver quality products, competitive pricing and an unmatched level of service to our members. We’re in this time of transition together—and backed by our long history of value, innovation and customer satisfaction—we will continue to earn Arizona’s confidence in BCBSAZ.

Our commitmenttoArizonansremainsunchanged

Last revised March 2013. The information provided may change due to newly government issued regulations.

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