A service of Maryland Health Benefit Exchange

Greater Washington Association of Health Underwriters

February 13, 2013

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What is a Health Insurance Exchange?Maryland Health Connection– Individual Consumers– Small Business Health Options Program (SHOP)

Large Employer ImplicationsThe Role of ProducersImplementation UpdateWays to Get Involved

Today’s Agenda

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The Patient Protection and Affordable Care Act requires each state to establish a “health insurance exchange” by 2014

A marketplace where individuals and small businesses explore, compare and enroll in private health insurance and public assistance programs, as well as access federal tax credits and cost-sharing subsidies

States had a choice to establish a state-based exchange, join a partnership or the federally-facilitated exchange; Maryland opted to establish a state-based health insurance exchange

What it is NOT:The state-based health insurance exchange is NOT an insurer or issuer of health insurance plans.

What is a State-Based Health Insurance Exchange?

Why It’s Important to Maryland

Expands access to health insurance for 730,000 Marylanders (13% of Maryland) currently without health insurance– Gives individuals access to primary care physicians,

preventive services

Provides federal subsidies for individuals up to 400% of FPL to pay for health insurance premiums– Infuses $600 million in federal subsidies into the State of

Maryland by 2015 NEW funds in health care system

Lowers uncompensated care costs in the healthcare system

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Guiding Principles

Informed by public input seven principles guide the policy decisions of MHBE to ensure that the state-based health insurance exchange serves the health care needs of Maryland individuals, families, employers and employees:

Accessibility: reduce the number of Marylanders without health insurance and improve access for all Marylanders.

Affordability: the affordability of coverage, within the Exchange and within the state, is essential to improving Maryland’s health care system and economy.

Sustainability: The Exchange will need to be sustainable in order to succeed in the long run.

Stability: promote solutions that respect existing strengths of our state’s health care system and promote stability

Health Equity: The Exchange should work to address longstanding, unjust disparities in health access and health outcomes in Maryland.

Flexibility: be nimble and flexible in responding to the quickly changing insurance market, health care delivery system, and general economic conditions in Maryland, while being sensitive and responsive to consumer demands.

Transparency: MHBE is accountable to the public, and its activities should be transparent, its services easily available, and its information easily understandable by the populations it assists

Maryland Health Connection – a service of the Maryland Health Benefit Exchange

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Maryland Health Connection is the name for Maryland’s health insurance marketplace

Maryland Health Connection is a marketplace where individuals, families and small businesses can:– Compare health insurance options – Calculate total out-of-pocket costs based on eligible subsidies or tax

credits– Enroll in the health plan that’s best suited for their needs

Maryland Health Connection will have many assistance resources for consumers and small businesses:– MarylandHealthConnection.gov: the eligibility and enrollment portal– In-person assistance through navigators and insurance producers– Consolidated Services Center

What is the Maryland Health Connection?

Individuals & Families

Maryland Health Connection – Individuals & Families

One single entry point for commercial insurance and Medicaid– No wrong door approach

Offers tax subsidies and cost sharing reductions to individuals and families – Only place individuals can access subsidies– Federal government will pay a portion of costs for health

insurance for people who earn up to 400% of FPL– Cost sharing reductions are available to individuals under

250% of FPL

Open Enrollment Period Begins: Oct. 2013

Coverage Effective: Jan. 2014

Small Business Health Options Program (SHOP)

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Small Businesses Health Options Program (SHOP)

Maryland Health Connection will have a Small Business Health Options Program (SHOP) dedicated portal for small businesses and their employees

Small businesses (including non-profits) with up to 50 employees may participate

In 2016, the ACA modifies the definition of small group to 100 employees

SHOP supports the existing market (does not replace it), small employers will still be able to purchase insurance outside of the SHOP

Carriers above a minimum threshold must offer products in the SHOP

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Why Consider the SHOP?

Tax Credits for Health Insurance will only be available through MarylandHealthConnection.gov beginning October 1, 2013

Employer Benefits– Innovative plan options that are easy to administer– Access to tax credits to offset the cost of employee premiums– Employee choice model– Ability to work with producers and third party administrators

Employee Benefits– A wider choice of plans that suit their individual needs– Online enrollment– Ability to manage their accounts online

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SHOP Plan Set-Up & Enrollment

Employer Plan Set-up

Estimated Quote

Employee Enrollment

Eligibility Determination

Validate Group

Notify Carriers

Employer is evaluated for eligibility to purchase QHP based on demographic information

Employer selects a metal level (Employee Choice) or a carrier (Employer Choice) and sets defined contribution amount; can designate a producer

SHOP provides an estimated quote based on employer choices and employee census (age, income, etc.)

Employees make plan selections with information on employer contribution and their expected cost

Validate that all requirements for the employer (e.g. minimum participation, creditable coverage for employees) have been met

Notify carriers to contract with employer and start coverage for employees

SHOP Administration• Premium aggregation and billing• Carrier payment• On-going eligibility / enrollment management

(employee adds, deletes, life changes, etc.)• Enrollment and funds flow reconciliation

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Two Options for Small Employers:Employer vs. Employee Choice

Employee Choice

Employer C

hoice

Gold

Silver

Bronze

Platinum

CarrierA

CarrierB

CarrierC

CarrierD

CarrierE

CarrierF

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Counting Methodology Comparisons

The employee counting methodology impacts whether a group will be eligible to purchase on the SHOPThe Maryland Exchange Board approved the FTE aggregation method consistent with federal rules for tax subsidiesEmployers can decide whether to offer coverage to full time employees only or all employees

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2010-2013: Maximum tax credit for small employers is 35% of the qualified premium for health insurance for employees– Maximum tax credit for small tax-exempt employers

(charities) is 25%

January 1, 2014, rate increases to:– 50% tax credit for small employers– 35% for small tax-exempt employers (charities)

Tax Credit Eligibility– Fewer than 25 full-time equivalents, with average wages

of less than $50,000 per year– Provide 50% of single (not family) coverage for each

employee– Calculations are made on a sliding scale– Tool available on IRS website

Small Business Tax Credit

Large Employers

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Large Employers

Must offer coverage to their employees– Must meet minimum essential value– Cannot be less than 60% actuarial value– Cannot be more than 9.5% of employee’s income

If coverage isn’t offered and 1 person gets subsidies– Will be assessed $2000 for each FTE over 30 employees

If offer coverage but fails the tests above and 1 person gets assistance– Will be assessed $3000 per assisted employee or $2000

for all employees over 30 – whichever is less

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MHBE Role in Large Groups

Maryland Health Connection must report all individuals receiving subsidies to federal government through hub

Maryland Health Connection will capture employer information during enrollment process– Anyone eligible for coverage through employer?– Anyone currently enrolled through employer?– Employer group plan information

• Employer name• EIN• FTE status• Address• Lowest cost plan• Employee contribution for self-only coverage• Frequency of contribution

The Role of Producers

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MHBE expects to have multiple resources available for consumers who need assistance with understanding insurance options. – Outreach and Education

• Advertising• Events and Business Outreach

– Online at www.MarylandHealthConnection.gov

– In Person & Telephonic Assistance: • Producers• Connector Entities/Navigators• Call Center

Consumer Assistance

The Role of Producers

Maryland has designed a prominent role for producers as it works to create Maryland Health Connection.

Producers will be key partners to help individuals and small businesses get access to plans offered on Maryland Health Connection.

MHBE is designing a Producer Services Program to ensure producers receive information and can provide input. – Communication Tools– Training & Authorization Program – Producer Advisory Council

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Producer Input

Council members will be asked to comment on:– Strategies to maximize the participation of producers– Strategies to educate small businesses and develop

outreach tactics– Content for producer training– Authorization procedures for selling exchange plans– Marketing tools for producers– Support services for producers

Producer Advisory Council

Implementation Update

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What’s Next?

Federal Certification: Maryland Received Conditional Certification on December 10, 2012 (among 1st six states)

Continued development of IT system

Staffing MHBE– Producer Services Manager– TPA Services Manager

Outreach & Education: Q2 2013

Consolidated Services Center (Call Center): July 2013

Producer Training: Starting mid-late July 2013

Open Enrollment: October 1, 2013 - March 31, 2014

Ways to Get Involved Now!

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Online Resources

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Sign Up for Email UpdatesSign Up for Text Updates: Text “Connected” to 69302Get information on insurance resources available to help nowLink to details on meetings and reports

MarylandHealthConnection.gov

MarylandHBE.com

Meeting InformationRFP AnnouncementsJob Information

For questions on the information contained in this presentation, please contact:

Tequila TerryDirector, Plan & Partner Management

Maryland Health Benefit ExchangeEmail: Tequila.Terry@maryland.gov

www.MarylandHealthConnection.gov

Thank you!

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