Debbie Boop of Anthem Blue Cross Blue Shield presented a health care reform educational seminar at the Fostoria Area Chamber of Commerce Wednesday.
The Affordable Care Act went into effect on March 23, 2010, and information is constantly changing.
Boop explained everyone is impacted by health care reform, including all employers, employees and individuals looking for affordable health care. She also said because of the changes that have occurred since the law was passed, there has been confusion as to what provisions are being delayed and what is in effect.
Many changes are being made, including the definition of a small group of employees. The small group market is defined as 2-50 employees.
This will remain in effect until 2016, when the number of employees in a small group will go up to 99. Boop said this is important because it will change the way rates are decided.
The rating system will change in order to close the gap between the lowest and the highest premiums paid by employees.
Because of this, those with lower premiums will have to pay more and those with higher premiums will have to pay less in order to narrow the gap.
Companies will only be able to rate on age and address. From a risk standpoint, smaller cities will benefit the most, because those in larger, metropolitan areas such as Cleveland, Columbus and Cincinnati will have to pay a higher premium.
With the new system, there are no family premiums. All individuals are rated based on their own age and address.
An additional rate on which to base the premium is tobacco use. At this point, certain variables still need to be clarified.
In determining the rate, both the small group and large group markets will be required to count all part time employees, seasonal employees, members of unions and others within the number of employees. Formulas can be found through the government to establish a number of employees.
In addition, penalties can be attributed to employers for not providing enough health insurance to its employees.
"As an employer, it's important for you to realize that those provisions are still going to apply starting Jan. 1, 2014," Boop said.
She said they were advising employers to start measures now to avoid any penalties.
If employers do not offer coverage, they must pay a $2,000 penalty per employee. If the company has employer based coverage but coverage does not meet the affordability test or does not meet the minimum 60% essential value, the company may be penalized further. If the employee attempts to find health care at the public exchange and is eligible for a subsidy, the penalty to the employer would be $3,000.
The penalties are in effect with the new health care program because an employer is required to offer coverage at a minimum at 60 percent. Small groups are not required to provide care, but Boop said that strategically, employers need to attract and retain employees by providing health care.
Every week, more information concerning employer penalties is available. All penalties are postponed until 2015.
Several types of plans are available, including platinum, gold, silver and bronze. Each pays 90 percent, 80 percent, 70 percent and 60 percent, respectively. There is an additional plan, called catastrophic, for what Boop called the "young invincibles" who are over 26 and do not want to pay a high premium for health care.
Insurance companies are interpreting the law on how the 60 percent value will be met.
All employers contribution has to be affordable, said Boop. Affordability is defined 9.5 percent of employee's W-2 wages within large group markets. Health and Human Services has come up with safe harbors that will help employers determine affordability without being subject to penalties.
Ten services are required under every health plan starting Jan. 1, 2014. Included in these services are outpatient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder treatment (including behavioral health treatment), prescription and pediatric services. All insurance plans cannot have dollar limits for any of the benefits. Instead, plans will have visit limits.
In the current Ohio market, individuals and groups can be denied by insurance companies. By the changes in the next year, no one will be denied. By eliminating the ability to deny individuals and groups, more will be added to the risk pool in the state. Because of this, the net cost of all insurance will increase.
Since the risk pool was closed earlier this year, all those without insurance will be able to enroll in the public exchange on Jan. 1, 2014.
In order to provide more options to individuals, Ohio could either set up its own public exchange for health care or be assisted by the federal government. Since the high cost of creating a health insurance marketplace would be placed upon Ohio residents, Boop said Governor John Kasich and Lieutenant Governor Mary Taylor decided that it would be more cost effective to let the federal government create the program with specific guidelines. Ohio government has control of which carriers can offer plans and the rate approval process.
The Federal Facilitated Exchange, or the FFE, is the only place in Ohio where an individual can apply for health care and get subsidies. Individuals can use a broker or an agent to facilitate the choice between 200 different plans and 12 carriers that are available through the FFE.
To qualify for subsidies and credits, individuals must buy health plans through the public exchange. Anyone up to 400 percent of the federal poverty level can be eligible for subsidies that could significantly offset the cost of the insurance premium. With the new program, the credit is taken off the monthly premium instead of set in a check.
Boop said that over all, the cost of an insurance plan is expected to increase about 40 percent.
All employers are required to notify their employees of affordable coverage as open enrollment begins on Oct. 1.
For more information, visit makinghealthcarereformwork.com, timeforaffordability.gov or healthcare.gov.
The event was sponsored by the Fostoria Chamber of Commerce and Corporate One Benefits.