Manny Munson-Regala JD

Assistant to the Commissioner

Minnesota Department of Health

September 30th, 2013

THE ACA’S AND SMALL BUSINESS:

IMPACT IN MN

AGENDA

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• Why Reform?

• Provisions affecting Small

Businesses

• MNsure

• What Next

WHY PASS THE ACA?

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VALUE PROPOSITION?

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MINNESOTA

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HOW IS MN DOING?

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Recognized as a leader in health and health care, but…

• Increase in uninsured

• Health disparities between populations

• Health care spending continues to increase (13.9% of

state economy (up from 12.8% in 2006)

Used to be 1st in the UnitedHealthcare rankings, now 5th

ENROLLMENT FOR SMALL GROUP

491,079

359,775

0

100,000

200,000

300,000

400,000

500,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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Fully Insured market only

Source: MDH, Health Economics Program; estimates based on data from various sources.

COMPOSITION OF THE WORK FORCE

Up to 100% FPL, 2.7%

101 to 200% FPL, 35.3%

201 to 300% FPL, 29.5%

301 to 400% FPL, 12.0%

More than 400% FPL , 11.9%

Small employer population includes employees who work for an employer with 2 to 50 employees.

Source: MDH Health Economics Program analysis of the 2011 Minnesota Health Access Survey. 8

ACA AND SMALL BUSINESS

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SELF EMPLOYED

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• Individual mandate- can be satisfied by ESI (including

COBRA and retiree coverage), Medicare, Medicaid,

CHIP, VA coverage and TRICARE

• Can purchase on the MNsure

• Access to tax credits on sliding scale

• Coverage through Medicaid expansion

• Coverage through Minnesota Care

• No employer mandate

• Protected by MLR rule

• Limited to $2500 contribution for

FSAs

• Medicare withholding increases

from 1.45% to 2.35% for higher

compensated employees (e.g.

200k)

• No more waiting period after

2014 for ESI

• Eligible to participate in MNsure

• If offer coverage, must provide “Summary of Benefits and Coverage”

• Wellness incentives up to 30% of premium; with up to 50% difference for tobacco use

• Two tax credit programs- but not for employers 25 to 50

• Must provide notices to their employees about exchange, tax credits and potential impact on employer contribution

50 OR FEWER EMPLOYEES

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• Department of Labor (DOL) requires employers to notify current and new employees notices of their coverage options

• Generally applicable to all employers that employ one or more employees that produce $500,000 annually

• All new employees must begin receiving the notification by October 1st, 2013 within 14 days of hire

• Current employees hired prior to October 1st, 2013 must receive the notification by October 1st, 2013

• Can be sent via email

• Examples can be found on the DOL

website

http://www.dol.gov/ebsa/healthreform/i

ndex.html

• Must inform the employee of:

• the existence of Mnsure

• contact information of Mnsure

• explain that employees may be

eligible for premium tax credits

under the ACA; and

• that purchasing products through

MNsure may eliminate employer

contributions

EMPLOYER NOTICE

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GOAL? 1.3 MILLION MINNESOTANS

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Individual Consumers –

300,000

Small Businesses and

Employees – 150,000

Medical Assistance/

MNCare – 850,000

Advantages of Exchanges in general

• Transparent, competitive market with

better information and more choices

• Aggregated buying power

• Defined contribution and employee

choice of issuers and plans

• Option for employer defined

contribution with one bill, one check

administration

Advantages specific to MNsure

• Employer tax credits

Advantages resulting from market reforms

• Rating reforms in individual and small

group markets

• Risk adjustment in small group market

• Limits on allowable Minimum Loss

Ratio

• Increased risk pool from more

Americans covered

WHY MNSURE AND ACA INSTEAD OF CURRENT

MARKET

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• Must exist in each state (either as

state or federal exchanges) Minnesota

decided to implement state-based

exchange or marketplace called

MNsure

• May be separate or combined with

individual exchange We have one

marketplace

• Must be self-supporting by 2015

MNsure funded by fee of up to 3.5% of

MNsure premiums

• Individual and small group risk pools

may be combined or kept separate

Currently separated

• Serves 1-100, or, at state option: 1-50

until 2016 Minnesota at 50

• States may expand to larger

employers beginning in 2017 Policy

decision still to come

• State agency, non-profit or hybrid

Minnesota created quasi state agency

(subject to some but not all state rules)

• Active purchaser or clearinghouse

Clearinghouse in 2014, Board’s option

afterwards

SHOP EXCHANGES: ACA OPTIONS AND

MINNESOTA'S CHOICES

MNSURE: DEFINED CONTRIBUTION

• States can offer employers options:

– (1) employees can choose any QHP offered in the SHOP in any tier;

– (2) employers select specific tiers from which an employee may choose

a QHP;

– (3) employers select specific QHPs from different tiers of coverage from

which an employee may choose a QHP; or

– (4) employers to select a single QHP to offer employees

MNsure will offer all of the employer options

MNSURE: BILLING AND OTHER SERVICES

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• MNsure will:

• provide bill with details of employer and employee contribution

• employee pays employee contribution through payroll deduction

• employer sends total premium to the SHOP

• Premiums remain the same throughout the employer’s plan year

• Customer service provided by a broker, MNsure or the insurer

• Changes to coverage during the year (adds/drops) made on MNsure

• MNsure notifies employer of renewal process

MNSURE: PRODUCT OFFERINGS

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• Three companies approved to sell small group health policies on MNsure

• Blue Cross Blue Shield

• Medica

• Preferred One

• 63 products at all metal levels

• All products must meet new insurance rules

• Essential Health Benefits

• Rules on annual/lifetime limits

• Definition of dependents

• Mix of broad and narrower networks

• In 2014, small group health

rates inside and outside

can only use:

• an individual or family

• geographic area

• age (but by no more

than a 3:1 ratio), and

• tobacco use (but by no

more than a 1.5:1 ratio).

In region 8 (metro area), a

business with five employees

can buy:

• Bronze from $507 to

$1,014

• Silver from $594 to $1,187

• Gold from $702 to $1,403

• Platinum from $894 to

$1,788

MNSURE: COSTS

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MNSURE: TAX CREDIT

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• Only available in MNsure

• Small employers that provide healthcare coverage are eligible (a “qualified

employer”) if:

• They have fewer than 25 full-time equivalent employees (FTEs) for the

tax year

• The average annual wages paid are less than $50,000 per FTE

• The employer pays at least 50% of the premium cost under a “qualified

arrangement”

• For more information on the tax credit, go to this link

http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-

Employers

MNSURE: ENROLLMENT

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• Because small employers do not have to offer

coverage, they can:

• Enroll starting October 1, 2013 for coverage starting

as soon as January 1, 2014

• Enroll and begin coverage any time after January 1,

2014

• If you plan to use MNsure, you must offer coverage to

all of your full-time employees

MNSURE: PARTICIPATION

REQUIREMENTS

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• Current MN law only requires guaranteed issue for small

employers if the small employer:

• contributes at least 50 percent toward the cost of coverage

for each eligible employee;

• AND at least 75 percent of the eligible employees who have

not waived coverage participate in the plan.

• MNsure will waive both requirements for employers purchasing

November 15 to December 15, 2013.

PROJECTED IMPACT

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MNsure commissioned study by Gruber-Gorman to

model out impact of ACA on MN. Some relevant

findings:

• Increased premiums for a healthier groups and decrease

premiums for the less healthy groups

• Overall premium impact flat

• 150,000 projected small employers enrolled in MNsure

DECISION POINTS FOR SMALL

BUSINESSES

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• No requirement to offer health insurance but there are

some incentives.

• MNsure offers more options and possible bargaining power

• Premium tax credits available through MNsure.

• Employee demand

• Some workers better off with a premium tax credit if they go through the

exchange

• Other workers not eligible for large exchange tax credits will take

coverage offered through work

AFTER THE ACA, WHAT NEXT?

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FROM HEALTH CARE TO HEALTH

Economic and social conditions

influence the health of people and

communities .

Factors related to health outcomes

include: • Early childhood development

• Education

• Employment status

• Type of work

• Food security

• Access to health services and quality of those

services

• Housing status

• Income

• Discrimination and social support

Minnesota

Your ZIP Code May Be More

Important to Your Health Than

Your Genetic Code

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SUMMARY

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• Small Employers have many options

• Employer Mandate does not apply

• One option is MNsure which offers:

• 3 carriers with various products

• Defined contribution options

• Aggregated billing

• Access to Agents and Brokers

• Access to Tax Credits

• Potential aggregated buying power

• Next? From Health Care to Health

RESOURCES

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• www.mnsure.org , www.mnsure.com or 855-3-MNSURE, or 855-

366-7873- for information on Mnsure

• Agents or Brokers

• In-Person assisters (check MNsure for up to date locations and

names)

• Small Business Minnesota

• www.healthreform.gov- for information on the ACA generally