june, 2013 small business update. 2 5/8/2013 | © kaiser permanente2424 2013. all rights reserved....
TRANSCRIPT
June, 2013
Small BusinessUpdate
2 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.
Small business
3 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.
Promotions
Your clients will lock in rates for May 1 to September 1 effective dates, and you’ll get a bonus.
Guaranteed RAF based on the number of new subscribers enrolled with Kaiser Permanente New groups with 1-5 subscribers 1.10 RAF New groups with 6+ subscribers .90 RAF
Bonus for every new small group plan you sell that has 6 or more Kaiser Permanente subscribers New groups with 6-9 subscribers $500 New groups with 10-15 subscribers $750 New groups with 16+ subscribers $1,000
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Rate adjustment factor (RAF) and bonus program
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Rate changes
All HMO copay, deductible HMO, HSA, and HRA plans
Region Year-over-year 6-month
Northern California 6.1% 3.9%
Southern California 6.1% 6.1%
Includes CalChoice, HSA California, and Choice Solution plans
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July 2013 rate changes
POS and PPO plans
Region Year-over-year 6-month
Northern California POS 5.0% 0.0%
PPO 1.9% 0.0%
Southern California POS 3.0% 0.0%
PPO 1.9% 0.0%
Includes Choice Solution plans
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July 2013 rate changes
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New policies and reminders
Effective immediately, any new group employer application must be received by the 1st of the month in which it is effective.
July 2013 rates will be available on June 15 to quote online. In the meantime, please send your quote requests to [email protected].
New enrollment material is posted on BrokerNet (brokernet.kp.org) as of May 1, 2013. Please refer to BrokerNet for the most up-to-date materials.
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2013 new group updates
A small group that has a management carve-out wants to meet employer shared responsibility. What are their options?
Groups with 51 to 100 total employees can add non-covered employees to current small group policy by purchasing insurance directly through Kaiser Permanente, but they are not eligible for SHOP.
Groups with 101 or more employees will transfer to large group.
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What to do when your small group may be “large”?
Small Business Unit will handle small to large group transfer.
Groups with 51-100 total employees will remain in small group.
Groups with 101 or more total employees will transfer from small to large group.
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Transferring groups from small to large
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Rating changes under the ACA
Multiple plan offering
Tax credit
Guaranteed availability
3:1 rating ratio
Valid waivers
Member level rating
Grandfathered or
non-GF
Carrier-direct or
SHOP
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Small business considerations
Today
7 age bands, no ratio rules Family tier rating 7 rate areas Based on employer ZIP code Risk adjustment factors (.90-1.10)
2014 and beyond
45 age bands, 3:1 max ratio Member level rating 19 rating areas Based on employee ZIP code No risk adjustment factors
Groups with grandfathered plans will continue to be rated in 2014 as we do today. Groups with nongrandfathered plans will be rated based on the 2014 and beyond
methodology. Groups with grandfathered and nongrandfathered plans will be rated using both
methodologies.
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How rating will change in 2014
Many factors will impact an employer's rates in 2014. Groups with grandfathered plans will be impacted less than groups with nongrandfathered plans.
Here are some factors that will impact a small employer:Rate impacts Grandfathered plans Nongrandfathered plans
Trend Yes Yes
Fees Yes Yes
SHOP participation fee No Yes
Benefit & plan changes No Yes
Elimination of risk adjustment factor (RAF)
No Yes
Market-based risk adjustment No Yes
Member level rating No Yes
15 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.
Why grandfathered status matters
Current rates $30 plan
Age EE EE + SP EE + CH FAM
<30 $303 $847 $833 $1,179
30-39 $335 $910 $856 $1,303
40-49 $432 $994 $821 $1,312
50-54 $563 $1,170 $928 $1,495
55-59 $711 $1,493 $1,063 $1,717
60-64 $877 $1,666 $1,173 $1,945
65+ $995 $2,150 $1,496 $2,363
Age Rate Age Rate0-20 $196 43 $418 21 $308 44 $430 22 $308 45 $445 23 $308 46 $462 24 $308 47 $481 25 $309 48 $503 26 $315 49 $525 27 $323 50 $550 28 $335 51 $574 29 $345 52 $601 30 $350 53 $628 31 $357 54 $657 32 $364 55 $687 33 $369 56 $718 34 $374 57 $750 35 $376 58 $785 36 $379 59 $802 37 $381 60 $836 38 $384 61 $865 39 $389 62 $885 40 $394 63 $909 41 $401 64+ $924 42 $408
Illustrative ACA-compliant rates
Compare and contrast the rate structure for a $30 copay plan at a 1.0
Current rate structureBased on the subscriber age and family tier
ACA-compliant rate structureBased on each family member age
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Member level rating
Example 1 of member level rating impact
Age EE EE + SP EE + CH FAM<30 $303 $847 $833 $1,179
30-39 $335 $910 $856 $1,303 40-49 $432 $994 $821 $1,312 50-54 $563 $1,170 $928 $1,495 55-59 $711 $1,493 $1,063 $1,717 60-64 $877 $1,666 $1,173 $1,945 65+ $995 $2,150 $1,496 $2,363
Current rates
ACA Compliant Member RatesAge Rate Age Rate Age Rate Age Rate0-20 $196 32 $364 44 $430 56 $718
21 $308 33 $369 45 $445 57 $750 22 $308 34 $374 46 $462 58 $785 23 $308 35 $376 47 $481 59 $802 24 $308 36 $379 48 $503 60 $836 25 $309 37 $381 49 $525 61 $865 26 $315 38 $384 50 $550 62 $885 27 $323 39 $389 51 $574 63 $909 28 $335 40 $394 52 $601 64+ $924 29 $345 41 $401 53 $628 30 $350 42 $408 54 $657 31 $357 43 $418 55 $687
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Employee: Joe, age 53, with a spouse and 4 children
Member level rating family premium: $1,719
Family memberJoe, age 53Spouse, age 48Child, age 18Child, age 16Child, age 14Child, age 12
Family coverage tier premium: $1,495
$1,719
Rate$628$503$196$196$196$0
Example 2 of member level rating impact
Age EE EE + SP EE + CH FAM<30 $303 $847 $833 $1,179
30-39 $335 $910 $856 $1,303 40-49 $432 $994 $821 $1,312 50-54 $563 $1,170 $928 $1,495 55-59 $711 $1,493 $1,063 $1,717 60-64 $877 $1,666 $1,173 $1,945 65+ $995 $2,150 $1,496 $2,363
Current rates
ACA Compliant Member RatesAge Rate Age Rate Age Rate Age Rate0-20 $196 32 $364 44 $430 56 $718
21 $308 33 $369 45 $445 57 $750 22 $308 34 $374 46 $462 58 $785 23 $308 35 $376 47 $481 59 $802 24 $308 36 $379 48 $503 60 $836 25 $309 37 $381 49 $525 61 $865 26 $315 38 $384 50 $550 62 $885 27 $323 39 $389 51 $574 63 $909 28 $335 40 $394 52 $601 64+ $924 29 $345 41 $401 53 $628 30 $350 42 $408 54 $657 31 $357 43 $418 55 $687
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Employee: Joe, age 53, with a spouse and 1 child
Member level rating family premium: $1,327
Family memberJoe, age 53Spouse, age 48Child, age 18
Family coverage tier premium: $1,495
$1,327
Rate$628$503$196
Kaiser Permanente will support grandfathered plans. Other insurance carriers may support or eliminate grandfathered
plans.
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Can your clients maintain grandfathered status?
At a group’s 2014 renewal, we will map them to an aligned plan.
We will align as closely as possible based on actuarial value, and then also on product plan design.
Preserve product type (copay, deductible HMO, HSA, HRA).
Goals for mapping:
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Nongrandfathered mapping to ACA metal plans
Birthday billing eliminated for grandfathered and nongrandfathered plans.
Rates will be adjusted based on age at contract renewal.
New hires will be rated based on the age that they were at the beginning of the contract year.
21 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.
Rating rules
Covered California standard plan options by metal as released on March 27, 2013
Platinum Gold Silver Bronze Catastrophic
Copay
Copay $20 Ded Not applicableIP/OP $250 per day (up to 5 days) Rx $5/$15 – No brand deductibleOOP Max $4,000
Copay $30 Ded Not applicableIP/OP $600 per day (up to 5 days) Rx $20/$50 – No brand deductibleOOP Max $6,350
Copay $45 Ded $2,000 (IP only)IP/OP 20% Rx $25/$50 – $250 brand deductibleOOP Max $6,350
Copay $60 Ded $5,000 (integrated Med/Rx deductible)IP/OP 30% Rx $25/$50 (integrated Med/Rx deductible)OOP Max $6,350
Copay $0 Ded $6,350 (integrated Med/Rx deductible)IP/OP $0 Rx $0 (integrated Med/Rx deductible)OOP Max $6,350
Coinsurance
Copay $20 Ded Not applicableIP/OP 10%Rx $5/$15 – No brand deductibleOOP Max $4,000
Copay $30 Ded Not applicableIP/OP 20% Rx $20/$50 – No brand deductibleOOP Max $6,350
Copay $45 Ded $2,000 (IP only)IP/OP 20% Rx $25/$45 – $250 brand deductibleOOP Max $6,350
HSA
Copay 40%Ded $4,500 (integrated Med/Rx deductible)IP/OP 40% Rx 40% (integrated Med/Rx deductible)OOP Max $6,350
22 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.
2014 standard individual exchange plans
Covered California standard plan options by metal as released on March 27, 2013
Platinum Gold Silver Bronze
Copay
Copay $20 Ded Not applicableIP/OP $250 per day (up to 5 days) Rx $5/$15 – No brand deductibleOOP Max $4,000
Copay $30 Ded Not applicableIP/OP $600 per day (up to 5 days) Rx $20/$50 – No brand deductibleOOP Max $6,350
Copay $45 Ded $1,500 (IP only)IP/OP 20% Rx $25/$50 – $500 brand deductibleOOP Max $6,350
Copay $60 Ded $5,000 (integrated Med/Rx deductible)IP/OP 30% Rx $25/$50 (integrated Med/Rx deductible)OOP Max $6,350Coinsurance
Copay $20 Ded Not applicableIP/OP 10%Rx $5/$15 – No brand deductibleOOP Max $4,000
Copay $30 Ded Not applicableIP/OP 20% Rx $20/$50 – No brand deductibleOOP Max $6,350
Copay $45 Ded $1,500 (IP only)IP/OP 20% Rx $25/$45 – $500 brand deductibleOOP Max $6,350
HSA
Copay 20%Ded $1,500 (integrated Med/Rx deductible)IP/OP 20% Rx 20% (integrated Med/Rx ded)OOP Max $6,350
Copay 40%Ded $4,500 (integrated Med/Rx deductible)IP/OP 40% Rx 40% (integrated Med/Rx deductible)OOP Max $6,350
23 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.
2014 standard small group exchange plans
Employee choice of carrier with no minimum participation
Consolidated billing and enrollment
Defined benefits platform
Plan comparison tools
Tax credit
Choice of all SHOP plans + extra non-SHOP plans
Group can choose multiple metal tiers
Retain grandfathered plans
No re-enrollment needed
Ongoing relationship
SHOPCarrier access
Carrier directBroad plans
24 5/8/2013 | © Kaiser Permanente2424 2013. All Rights Reserved.
Benefits of the SHOP vs. a direct carrier
ACA limits waiting periods for new hires to a maximum of 90 days. Some states (like California) have reduced this to a 60-day maximum waiting
period. Employers can also have waiting periods of 0 or 30 days. Waiting period maximums apply to small business regardless of whether they
have grandfathered or nongrandfathered plans. Kaiser Permanente will offer the following waiting period options:
— 1st of the month following date of hire— 1st of the month following 30 days from date of hire— 60 days following date of hire (premiums will be prorated)
Existing small groups with waiting periods in excess of 60 days will be mapped to an ACA-compliant waiting period at their renewal in 2014.
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How waiting periods will be impacted for small business
Kaiser Permanente will support customer early renewals in Q4 2013.
Some disadvantages with early renewal
• Some groups will benefit from rating changes under the ACA.
• It will delay access to the SHOP, new benefit plans, and enhanced small employer tax credit.
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Early renewal available for small groups
Definition of small employer under the ACA does not include sole proprietorships or S corporations unless they enroll at least one non-spouse, common-law employee, i.e., non-owner employee who receives a W-2 and is listed on a DE9C.
CA AB 1083: “For plan years commencing on or after January 1, 2014, the definition of an employer, for purposes of determining whether an employer with one employee shall include sole proprietors, certain owners of ‘S’ corporations, or other individuals, shall be consistent with Section 1304 of ACA.”
ACA Section 1304 defines employer by reference to PHS Act 2891, which incorporates by reference ERISA Section 3(5). Federal law does not classify an individual and his or her spouse as employees when the trade or business is wholly owned by the individual or by the individual and his or her spouse.
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Sole proprietors and S corps: What’s required?
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Individuals and families
Kaiser Permanente will map individuals with nongrandfathered plans to new ACA-compliant plans as of January 2014.
Consumers who buy or renew policies in 2013 that are not grandfathered will need to renew as of January 2014 with an ACA-compliant plan.
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Individuals in 2014
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Preparing for 2014
Kaiser Permanente timeline May 2013 July/August
2013September
2013October 2013 January 2014
Business line updates
• January 2014 Plan Highlights, rates and materials available
• Exchanges open
• Enrollment begins
• SHOP and HIX go live
• Minimum value, employer shared responsibility, ACA taxes in rates in effect
Broker resources
• HCR information and tools on BrokerNet
• HCR broker webinar
• Broker BOB tool
• Broker Market Update
Employer communication
• HCR employer guide
• Letter with early renewal and guidance on how plans will change & what needs to be done.
• January 2014 renewals released
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What we’re doing to prepare for member growth
Opening new facilities and maintaining or expanding existing ones
Assessing and updating workforce
Providing alternatives to traditional office visits
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Health care reform readiness