Private Exchanges and

Penalties 101: Prepared for: PNW ACA Session

Prepared by: Tom Madden

Prepared on: September 8, 2015 A Primer On New Solutions for

Employers

Private Exchange: It’s about time we

choose our benefits!

What is a private

exchange?

A choice driven benefit offering to

distribute and administer health

insurance and related products

What do they offer?

1. Diverse products: wide range of pre-set individual

products available, and/or ability to load & offer custom

group plans

2. One-stop shop: enable employers to introduce wide

range of supplemental/additional insurance products

3. Decision support: web-based technology or live reps

help employees, coaching them through wide range of

choices

4. Ongoing admin support: exchange representatives

will answer ongoing questions about purchased

insurance, or employer reporting/administrative needs

Defined Contribution: a proven financial tool for controlling cost

What is defined

contribution?

Financial arrangement where employers

manage their year-over-year benefits

spend to a predictable, pre-defined

amount

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Implement DC plan

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Public vs. Private Exchanges – what

are the differences? PRIVATE PUBLIC K

ey P

rivate

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Who uses it? Restricted access to

private groups Open to all US citizens

What does it offer? Medical, Rx, Dental, Vision, Life,

Accident, Voluntary, and more Medical, Rx, Dental

Who sponsors? Private Industry Federal Government, with Private

Industry

Technology? Advanced, Web 2.0 – many have

been operating for 10+ years 2 Year New, Improving

Government Fee? No No

Carriers Available? Single and Multi-Carrier Multi-Carrier

Product Platform? Group (“On” or “Off” Exchange) or

Individual Group (“On” only) or Individual

Product Funding? Insured or Self-Funded Insured

3rd Party Support Yes Yes

Growing interest in private

exchanges? Candy Bar Test

Why the growing interest?

Technology can simplify and

enhance employee benefits

purchasing experience

Defined contribution yields

predictable benefits expense

Compliance cost burden is more

manageable for employer

Increase choice to meet each

employee’s individual needs

One-stop shopping all products

available in one location

Mercer says… 56% of employers

considering private exchange strategy

AON Hewitt says… 44% of employers

considering private exchange strategy

Accenture says… 20 million to purchase

insurance via private exchange by 2016;

40 million by 2018

Employer Penalties tied to an Offer of

Health Coverage 2-50 Employer 50+ Employer

Do you have to offer a

Group Health Plan that

Includes Min. Essential

Coverage?

No Yes

What is Minimum

Essential Coverage?

100% Coverage of Preventative

Care without an Annual Max

100% Coverage of Preventative Care without an Annual Max

Who sponsors? NA Employer

Penalty for not offering

Min. Essential Coverage $0.00

$2,000.00 per EE/year – first 30

EE’s are free

Do you have to offer Min.

Value Coverage? No No/ Yes

Penalty for not offering

Min. Value Coverage $0.00

$0.00 (if no EE’s accept a tax

credit on the Exchange)

Penalty for not offering

Min. Value Coverage $0.00

$3,000.00 (per EE that accepts a

tax credit on the Exchange)

Penalty for Sponsoring a

Non-ACA Compliant

Group Health Plan

$100.00 Per day Per Employee $100.00 Per day Per Employee

If an Employer Provides

Money for Insurance w/o

an ACA Compliant Group

Health Plan

$36,500 per Year $36,500 per Year

Real Penalties for Employers

• 3 Key Penalties. 2 of 3 Penalties do not apply to businesses less than 50 EE’s.

• Employer Offers Minimum Essential Coverage – 2015 applies to employers 100+ – 2016 and Beyond applies to employers 50+ – $166.67 penalty per employee per month ($2,000.00)

• Employer Offers MEC but not Min. Value Coverage – 2015 applies to employers 100+ – 2016 and Beyond applies to employers 50+ – $250.00 penalty per employee per month ($3,000.00)*

• Only applies to employees that receive tax credits via exchanges

• Employer does not offer Minimum Essential Coverage and instead provides money for health insurance (Applies to all Employers) – $100.00 penalty per employee per day ($36,500.00) – Went into effect on 7/1/2015

Real Penalties for Tax Payers

PRIVATE EXCHANGES: The 21st Century Benefit Solution

“Delivering Greater Choice For Employees, At Lower Cost To Your

Business” 1. Defined Contribution Cost Design

2. Employees Choose Benefits That Fit Their Unique Needs

3. One Source, one Setup, and one implementation:

Private exchanges are

forecasted to have up to 40

million employees enrolled by

2018 – this trend is beginning

now, due to these benefits:

Bring cost control, greater

choice, and smooth

enrollment with a private

exchange solution

You pick your benefits

budget – whatever can

be afforded by your

organization

Quote

The

Policies

Communicate,

Enroll, and

Service Your

Employees

Our Mission: Empower Individuals and Simplify Benefits • i PlanRx™ will empower individuals to

make better health and wealth purchasing decisions. We believe in providing individuals the Freedom to Choose. We will work together with our collaborative partners to redefine the marketplace and grow our mutual client base. We are committed to providing our partners the market leading: knowledge, technology, and products to efficiently and profitably meet their employees financial protection needs. i PlanRx™provides our partners a simple solution to a complicated problem.

About Me:

• Tom Madden, Partner

• Healthcare is Counterintuitive

• Our Company will share our knowledge with you to help the system work for you.

375 AMS Court, Ste B Green Bay, WI 54313 Tel: 877-571-7710 Web:

www.iplanrx.com