Group 17 Health Benefit Exchanges And Connectors

Question 1

Exchanges: financial penalties and incentives

Answer 1

1. Financial penalties for not purchasing insurance (aka individual mandate)
   
   1. 1 without it, HBEs would be subjected to anti selection
2. Financial incentives to purchase instance through an HBE
   
   2. 1 small employer tax credit if less than 25 FTEs and average EE earns less than $50K per year
   3. 2 Govt subsidies available to individuals with income up to 400% FPL
      
      2. 2.1 Premium subsidy
   4. 2.2 Cost sharing subsidy

Question 2

Other important elements of the ACA that affects HBEs

Answer 2

1. Individual and small group markets will be guaranteed issue
2. Individual and small group markets must adjusted community rating
3. Premium rates will reflect benefit plan, area, age, family size, tobacco use
4. Combined risk pool will include all of the carriers individual policyholders
5. State may require that carriers combine their individual and small group risk pools
6. Difference in prem due to a persons age is limited to a 3 to 1 ratio. Tobacco a 1.5 to 1 ratio

Question 3

How will the purchasing process be affected by HBEs?

Answer 3

1. Purchasing by individuals and employers, assisted by agents and brokers
2. An additional party, a navigator: educate and assist customers
3. Navigator must be qualified and licensed
4. Navigators may not be insurers and may not receive compensation from insurers

Question 4

HBE administrative functions

Answer 4

1. Certifying plans
2. Assigning quality ratings to plans
3. Presenting benefits information in a standard format
4. Providing consumers with eligibility determinations
5. Providing certifications for people exempt from indiv responsibility requirement
6. Ensuring all participating health plans satisfy the HBE’s requirement

Question 5

Exchanges: key decisions that states must make

Answer 5

1. Should the state establish an HBE
2. Governance structure
3. Influencing the level of HBE participation: ease of use, providing value-added services, effective marketing, consumer education, allowing groups of 51+ EEs to participate , not establishing a basic health plan
4. Merging individual and small group rating tools
5. Requiring carrier participation in the HBE
6. Controlling anti selection
7. Standardize benefit packages
8. Basic health plan (BHP)
   
   8. 1 for residents under 200% of FPL, but not eligible for Medicaid
   9. 2 additional administrative burden and financial risk
9. Intra-state exchanges
10. HBE as an active purchaser or open market
11. Value-added services
12. 1 clearing house
13. 2 enhance online comparison tools
14. HBE administration expense funding

Question 6

Federal requirements that help control anti selection against the HBE

Answer 6

1. Encouraging enrollment
   
   1. 1 individual mandate
   2. 2 premium subsidies and cost sharing subsidies
   3. 3 tax credits to small business
2. Plan design and pricing rules
   
   2. 1 all plans must cover at least essential health benefits
   3. 2 cannot offer plans more lean than bronze or catastrophic
   4. 3 prohibitions on benefit limits and on pre-existing condition exclusions
3. Rating rules
   
   3. 1 requirement to use adjusted community rating
   4. 2 same premium rates in and out of the HBE

Question 7

Federal requirements that help control anti selection among carriers within the HBE

Answer 7

1. Reinsurance program from 2014 to 2016
2. Risk corridor program from 2014 to 2016
3. Risk adjustment will operate indefinitely

Question 8

State opportunities to control anti selection against the HBE

Answer 8

1. Methods related to carrier participation
2. If a carrier elects to leave the HBE, might prohibit re-entry for a period of time
3. Could require that all carriers in the HBE offer plans at all benefit tiers
4. Restrict the differences between plans offered in and out of the HBE
5. Ensure consistency of pricing rules in and out of the HBE

Question 9

Benefit plans offered in the HBE

Answer 9

1. A qualified plan provides the essential benefits and is offered by an insurer meeting certain requirements
2. States have options to define benchmark plan. Ten options are available:
   
   2. 1 3 largest federal EE health benefit program plans
   3. 2 State’s 3 largest State EE plans
   4. 3 the state’s three largest small group products, and
   5. 4 the state’s largest HMO
3. Five levels of benefit plans offered in the HBE: bronze (60% of costs in benefits), silver (70%), gold (80%), platinum (90%), fifth level is catastrophic
4. A qualified, plan must offer at least one silver and one gold plan in the HBE, and must change the same whether inside or outside HBE