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The SHOP Marketplace - SMC Business Councils

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The SHOP Marketplace
New Health Insurance
Options for
Small Businesses
Roseanne Egan
Deputy Regional Administrator
August 2013
Introduction to the Marketplace
• The Marketplace (or Exchange)
– Place for qualified individuals and employers to
directly compare private health insurance options
• Known as Qualified Health Plans (QHPs)
– Can directly compare on the basis of price,
benefits, quality, and other factors
3 Things to Know about the
Marketplace…
1. It’s an easier way to shop for health coverage
– Simplifies the search
– All options in one place
– A streamlined application and an individual or family can
explore every qualified insurance plan in the area
2. Most people will be able to get a break on costs
– 90% of people who are currently uninsured will qualify for
discounted or free health insurance
3. Clear options with apples-to-apples comparisons
– All health insurance plans in the Marketplace present their
price and benefit information in plain language
The Health Insurance Marketplace
 A new way to get health insurance
• Enrollment starts October 1, 2013
• Coverage begins as early as January 1, 2014
• About 25 million Americans will have access
to quality health coverage
• Up to 20 million may qualify for
help to make it more affordable
What is the SHOP Marketplace?
SHOP = Small Business Health Options Program
• A new, streamlined way for small employers to offer health
insurance to their employees beginning in 2014
(Access to SHOP begins October 1, 2013)
• Part of the new Health Insurance Marketplace established
by the Affordable Care Act (ACA)
• Offers access to health insurance plans that must include
certain “essential health benefits”
• Works with new insurance reforms and tax credits to lower
barriers to offering health insurance that employers face
The Situation for
Small Employers Today
Many obstacles to offering health insurance to employees
• Difficulty comparison shopping between plans
• Unpredictable rate increases
• Higher rates for groups with:
o Women
o Older workers
o Workers who have chronic conditions or high-cost illnesses
(in most states)
• Waiting periods for coverage of pre-existing conditions
Removing the Obstacles:
Insurance Reforms
Now, insurance companies:
• Face limits on how much premium revenue they can spend on administrative
costs and take in profits.
• Must disclose and justify proposed certain rate hikes, generally of 10% or
more, which the state or the U.S. Department of Health and Human Services
review
Starting in 2014, insurance companies:
• Can’t charge higher rates:
o For those with pre-existing health conditions
o For women
o Based on individual’s health status
• Face limits on charging additional premiums for older employees
• Will pool risks across the small group market – inside and outside the SHOP
Marketplace
Removing the Obstacles:
Tax Credits
The Small Business Health Care Tax Credit
Is available to those employers :
• With fewer than 25 “full-time equivalent” employees
• Whose employees’ wages average less than $50,000 per year
• Who contribute at least 50% of employees’ premium costs
• Who buy health insurance through the SHOP only, starting in 2014
Is worth:
• Up to 35% of employer’s premium contribution (up to 25% for taxexempt employers) now
• Up to 50% of employer’s premium contribution (up to 35% for tax
exempt employers) starting in 2014
Removing the Obstacles:
Choice and Transparency
The SHOP Marketplace will offer small
employers:
•
•
•
•
A choice of health plans
Meaningful comparisons between plans
Choice to work with a broker or independently
Coming soon: Option to offer employees a choice
among qualified health plans across multiple health
insurance companies starting in 2015
(The SHOP in some states may offer this option in 2014)
Marketplace Effect on Small Business
• Starting in 2014, a SHOP will be available in each State.
• Once a group is enrolled, its rate is guaranteed for 12 months.
• To enroll, employer must:
– Have its principal place of business or an employee worksite in a
SHOP’s service area.
– Have at least 1 eligible employee:
• In most cases, spouses and children cannot be counted.
• Sole proprietors without other employees may enroll through the
individual market Marketplace.
Enrolling in SHOP:
Who, When & How?
Who’s eligible?
• Small businesses with fewer than 100 full-time equivalent
employees
• Most states will keep upper limit of 50 FTEs in 2014 and 2015
When can businesses enroll?
• Starting October 1, 2013, for coverage beginning
January 1, 2014
• Thereafter, throughout the year
How can businesses enroll?
• Directly through the SHOP
• Through a broker registered with the SHOP
How SHOP Works:
Different Plan Options for Different Budgets
SHOPs will offer choice of insurers, Qualified Health plans, and
financial protection levels
•
All health plans in the SHOP must offer “essential health benefits”
o
•
•
Items and services within 10 categories such as doctor visits, preventive care, hospitalization and Rx
Plan choices are grouped by �metal level’: Bronze, Silver, Gold, Platinum
�Metal levels’ generally reflect the plan’s generosity in covering cost of benefits for
an average enrollee
Level
Plan Pays (on average)
Employee Pays (on average)
Bronze
60 %
40 %
Silver
70 %
30 %
Gold
80 %
20 %
Platinum
90 %
10 %
How SHOP Works:
Moving Toward Employee Choice
A key goal of the SHOP:
Options for small employers and their employees
• Such as offering employees a single plan or a choice of plans
• The SHOP in each State has some discretion over which options offered
In 2014 only:
• In 2014 only:
• Under a rule issued on May 31, 2013, the SHOP isn’t required to offer an
employee choice option
2015 and after:
• The SHOP must offer small employers the option to offer employee
choice of all plans in single metal level
• The SHOP can choose to make additional options available to employers
How SHOP Works:
Employer Control and Simplicity
Single Plan Option
(a majority of states will offer only this option in 2014 under new rule)
•
Employer:
• chooses which qualified health plan to offer
• decides percentage of premium to contribute toward employee premium
cost
Single Metal Level Employee Choice Option
(available in all States starting 2015)
• Employer:
• chooses a metal level
• sets a single premium contribution amount -- for all employees
• gets a single bill – makes single payment to SHOP
• Employee:
• chooses any plan in the designated metal level
• pays the difference between employer contribution and plan premium
Employer Mandate
• The Department of Treasury decided to delay for one year
the mandatory employer and insurer reporting requirements
– Simplify the new reporting requirements
– Provide time to adapt health coverage and reporting systems
• As a result, employer shared responsibility requirement is
delayed until 2015
• SHOP will still open in 2014
– Employees can still access tax credits and cost reductions
SHOP: Basic Guarantees
All qualified health plans offered through the SHOP:
• Will provide “essential health benefits”
Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health
Prescription drugs
Rehabilitative services
Laboratory services
Pediatric services
Preventive/Wellness/ Chronic disease management
• Must be licensed and in good standing
• Offer adequate selection of doctors & hospitals
• Protect employees against catastrophic costs
Advantages of SHOP
• To the extent permitted by States, agents and brokers of all
sizes will be able to help small employers enroll through
SHOPs.
• Issuers participating in SHOP will present cost and coverage
information in a standard format that’s clear and easy for
agents and brokers to explain to clients.
• Applications will generally require less paperwork than
current small group market
XX
SHOP: a Market-based Approach
Uniquely American:
• Relies on private health insurers
• Spurs competition for customers based on price
and quality, rather than by avoiding risk
• Uses models pioneered by states
The Bottom Line
The SHOP helps small businesses by:
• Giving employers a choice of health insurance plans
• Providing apples-to-apples comparisons between health
plans
• Providing exclusive access to tax credits for many small
employers
• Soon: Providing the option to offer employees a choice of
health plans
For More Information
Toll Free Assistance: 800-706-7915
(9 a.m. – 5 p.m. EST)
www.HealthCare.gov
www.cciio.cms.gov
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