33
The Centennial Group April Firm Meeting Health Care Reform’s Impact on Physician Recruiting and Retention
The Centennial GroupApril Firm MeetingHealth Care Reform’s Impact on
Physician Recruiting and Retention
• Will employers continue to provide health insurance
as part of overall compensation strategy in 2014?
• What does the product delivery system look like in
2014 and beyond?
• Large Employer Purchasing Value in Health Care
• Physician Recruiting and Health Care Reform
Starting Lineup
Leadoff Hitter
Will
employers
continue to
provide
health
insurance?
Health Care Reform Survey Results 2012
• The 2012 Health Care Reform Survey was
conducted in early 2012.
• Survey was completed by 7,836 Business
Owners, Human Resources Professionals and
Decision Makers.
Health Care Reform Survey Results 2012:Demographics
Health Care Reform Survey Results 2012:Demographics
Health Care Reform Survey Results 2012:Health Benefit Costs
Health Care Reform Survey Results 2012:Grandfathered Plans
Health Care Reform Survey Results 2012:Pay or Play Decision
In 2014, employers with 50 or more full-time equivalent (FTE) employees are required to offer minimal essential health coverage to employees or possibly pay a penalty.
On Deck
A Look Inside The Product Delivery
System in 2014 and Beyond
The Marketplace
• Used to be called the “Exchange”
• Where individuals and businesses up
to 100 Lives can purchase coverage
• Some Federally run, State run or
Shared.
State Exchanges
• 18 Declared State-based Exchange
• 7 Planning for Partnership Exchange
• 26 Default to Federal Exchange
* Refers to Full Time Equivalents (FTEs)
Marketplaces & SubsidiesIndividuals Groups
Marketplace
Eligibility
Individual Marketplace
•Open to all individuals in 2014
•Individuals choose metal compliant
qualified health plans
SHOP Marketplace
•Open to all small groups 50 FTEs* or less in
2014
•Employer chooses metal level – Employee
chooses plan
•Expands to groups up to 100 FTEs* in 2016
•States have the option to expand access to
the SHOP to large groups in 2017 or later
Subsidy / Tax
credit
eligibility
• Sliding scale premium tax credits
based on income between 133% and
400% FPL
• Cost sharing subsidies for individuals
between 133% and 250% FPL who
purchase silver products
• Must purchase on individual
“Marketplace” to qualify
Temporary 2 year employer tax credits if:
•Up to 25 FTE employees and…
•Average annual income is less than $50k and…
•Paying at least 50% of employee premium
and…
•Must purchase on SHOP to qualify (active
employees only)
Individual tax credits and cost
sharing subsidiesHousehold Income
(% of Federal Poverty Level)
Premium Cap
(% of Household income paid
on insurance premiums)
Cost Sharing Subsidies
(% of OOP costs covered
under silver plan)
<133% FPL 2%(If the state expands Medicaid then this income
range would be eligible for Medicaid)
94%(If the state expands Medicaid then this income
range would be eligible for Medicaid)
133%-150% 3%-4% 94%
150%-200% 4%-6.3% 87%
200%-250% 6.3%-8.05% 73%
250%-300% 8.05%-9.5% 70%
300%-400% 9.5% 70%
Must purchase on individual Marketplace to be eligible for these subsidies and credits.
2013 Annual
Federal Poverty Guidelines
* Refers to Full Time Equivalents (FTEs)** For family coverage, multiply by 3 times the amount that is greater.
Individuals Groups under 50 FTE* Groups over 50 FTE*
Mandated
Coverage
Individual Mandate
•All individuals to prove
they have qualified
coverage through tax
returns
No Mandate
•Not required to offer
qualified coverage
However…
•Any coverage offered
must hit metal levels
Pay or Play Mandate
•Must offer qualified
coverage of at least 60%
actuarial value to 95% of
full time employees
Tax
Penalties
• 2014: the greater of $95
or 1% of household
income**
• 2015: the greater of
$325 or 2% of HI**
• 2016: the greater of
$695 or 3% of HI**
• None • Triggered when any
full-time employee
obtains tax credits in
individual
Marketplace
Reform Mandates
Note: Group size mandate definition is not the same as the rating definition
Reform Mandates:
Pay or Play RulesPay or Play Mandate Rules•Applies to employers with 50 or more
FTE employees
•Must offer qualified coverage of at least
60% actuarial value to at least 95% of its
full time employees
•Must offer and subsidize affordable
coverage
– Single employee premium contribution
not to exceed 9.5% of employees HI
•A large employer will be subject to
penalties if any of its full-time employees
receives a tax credit on the individual
marketplace
No Coverage Annual Penalty:
•$2,000 x (# full-time
employees – 30)
Unaffordable
or Low Value
Coverage
Annual Penalty:
•Lesser of no coverage
provision above or…
•$3,000 x (# full-time
employees receiving tax
credits)
Pay or Play Penalties:
Penalties to be adjusted for inflation post 2014
Reform Mandates:
Pay or Play Scenarios<50 FTEs Scenario A Scenario B Scenario C Scenario D
# of Full Time
Employees20 60 60 60
60
Employer
offers
coverage?
N/ANo No Yes Yes
# of Full time
employees
receiving tax
credits
N/A None 1 None 10
Annual Penalty
CalculationN/A No Penalty
(60-30) x $2,000
= $60,000No Penalty
Lesser of:
(60-30) x $2,000 =
$60,000
-OR-
(10) X $3,000 =
$30,000
Group Definitions Overview
Pay or Play
Employer
Mandate*
Off-SHOPSG Rating & Product Rules
On-SHOPSG Rating and Product Rules
2014-2015
50 or More FTE*
(Full-time employees
averaging at least 30
hours per week +
sum of all monthly
part time hours/120)
1-50 Eligible employees
(Full time employees
averaging 30+ hours/week
1-50 Full-time equivalents
(mandate counting
method*)
2016
1-100
(Counting method
undetermined at this
time)
1-100 Full-time equivalents
(mandate counting
method*)
2017
Rating rules would apply to all group sizes both on and
off SHOP if state opens up SHOP to large groups
(Product rules would apply to all groups on SHOP only)
No longer included in SG definition – moving to Individual•True Sole Proprietors•Direct Billed Association business
Taxes and FeesTax/Fee Description Calculation Method*
Remittance
Responsibility
1
Comparative
Effectiveness
Fee
An annual fee that funds research on the effectiveness, risks and
benefits of various medical treatments through the Patient-
centered Outcomes Research Institute (PCORI), a nonprofit created
through ACA
PMPY Calculation
Health Insurance Issuer for
fully insured business. Plan
Sponsor for Self Insured
2
Federal
Insurance
Premium Tax
A yearly tax due assessed on fully insured premiums % of fully insured premium Health Insurance Issuer
3Reinsurance
Fee
Annual fee that will support the transitional reinsurance program
with the goal of stabilizing premiums coverage for the individual
market both on and off the marketplace
PMPM Calculation
Health Insurance Issuer for
fully insured business. Plan
Sponsor or TPA for Self
Insured
4High Cost
Health PlanTax on the value of employer-sponsored health benefits % based on thresholds
Health insurance issuer for
fully insured business.
Sponsors and TPAs for self
funded
5Marketplace
FeesEstablished to ensure marketplace can be self-sustaining by
1/1/20153.5% premium
Health insurance issuer
participating and offering
health plans on the state or
federal marketplace
6
Risk
Adjustment
Fee
Establishes a risk adjustment fee to pay for administrative expense
of running the federal risk adjustment programPMPY Calculation Health Insurance Issuer
Taxes and Fees
When How Much Individual
Group
Medicare Medicaid
Insured ASC
1Comparative
Effectiveness Fee
July
2013$1 - $2 PMPY
2Federal Insurance
Premium Tax2014 % of Premium
3 Reinsurance Fee2014-
2016$5.25 PMPM
4 High Cost Health Plan 2018 + Variable
5 Marketplace Fees 2014 +
3.5% of
Marketplace
premium
6 Risk Adjustment Fee 2014 + $1 PMPY
Rating Standards: Rating Changes
Rate Increase Driver
Rate Decrease Driver
Michigan Market Impacts:Membership Transition through 2017
Uninsured (u65)
~1.2 MM
400% + FPL
~190K
300% - 400% FPL
~95K
200% - 300% FPL
~200k
133% - 200% FPL
~250K
<133% FPL
~440K
Michigan Market Impacts:Membership Transition through 2017
Uninsured (u65)
~1.2 MM
400% + FPL
~190K
300% - 400% FPL
~95K
200% - 300% FPL
~200k
133% - 200% FPL
~250K
<133% FPL
~440K
~440k targeted through Medicaid expansion* & outreach initiatives
~545
k mem
bers
elig
ible
for s
ubsid
ies o
n ind
ividu
al
mar
ketp
lace
500K to 1 MM members to individual
from group market
Batting Third
Large Employer Purchasing Value in
Health Care
Towers Watson Employer Survey 2012
17th Annual Survey
Completed by 512 Employers
Reflects 2011, 2012 and 2013 Health Care Decisions
Towers Watson
Towers Watson
Results
•Cost Trends
•Retiree Benefits
•High Performers vs. Low Performers
Towers Watson
Towers Watson
Towers Watson
Do The Math
Clean-Up
Key Things to Think About When Recruiting:
A Benefits Perspective
•Overall Compensation Strategy vs. Paycheck
•Bridge Healthcare for 55-65 year olds
•Retirement Strategies, Education and Communication
•Multiple Benefit Options
The Centennial GroupApril Firm MeetingTimothy M Durso, RHU
Executive Vice President, Employee Benefits800-606-0062
