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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
2
• Why Reform?
• Provisions affecting Small
Businesses
• MNsure
• What Next
WHY PASS THE ACA?
3
VALUE PROPOSITION?
4
MINNESOTA
5
HOW IS MN DOING?
6
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
12
13
GOAL? 1.3 MILLION MINNESOTANS
14
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
22
• 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
23
• 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
24
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?
26
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
28
SUMMARY
29
• 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