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SHOP Health Coverage Guide Update. Jim Sugden Small Business Marketplace Manager Connect for Health Colorado 8/13/2013. Today’s Agenda. Where are we now? SHOP Value Proposition What will happen on October 1 st ? What will happen on January 1 st ? Working with Brokers and Service Center

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SHOP Health Coverage Guide Update

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shop health coverage guide update
SHOP Health Coverage Guide Update

Jim Sugden

Small Business Marketplace Manager

Connect for Health Colorado


today s agenda
Today’s Agenda
  • Where are we now?
  • SHOP Value Proposition
  • What will happen on October 1st?
  • What will happen on January 1st?
  • Working with Brokers and Service Center
  • What support do our SHOP HCGs need?
2012 2014 exchange timeline

Develop, implement and test web portal and customer service functions

2012-2014 Exchange Timeline
  • Create policies for finance, audit, EHBs, and prevention of fraud

Exchange launch

(Oct. 2013)

Test all



Coverage Begins

  • Implement Certification program
  • Certify benefits and health plans



where are we now
Where are we now?
  • On target to open on October 1st
  • August 15th plan/rate approval, rejection or modification
  • 6 Participating SHOP Carriers
  • 8 Stand-Alone Dental Carriers
  • Training/Certification – registration open
    • Online training in progress / classes begin soon

Anthem ColoradoChoice Colorado HealthOP

Kaiser Permanente

Rocky Mtn Health Plans

SeeChange Health Ins.

the small business marketplace
The Small Business Marketplace
  • What’s our Value Proposition?

#1: The Power of Choice

Enhanced, multi-plan, multi-carrier CHOICE canempower employees to elect health plans that better serve their medical and financial needs.

When given the option, many employees will elect plans that reduce their premiums and often their employer’s premiums as well.

the small business marketplace1
The Small Business Marketplace
  • What’s our Value Proposition?

#2:Tax Credit Availability

The Small Business Health Care Tax Credit can make your costs for health group insurance more affordable.

Up to 50% credit for your businesses share of premiums (not including those paid for the business owners or their families)

Available for businesses with fewer than 25 employees with average employee income of less than $50,000.

Estimate your credit at:

what happens on october 1st
What Happens on October 1st
  • Website Access Completed
  • Client Account Set-up
  • Proposal Generation
  • Individual and Group Enrollment
  • Buying Patterns????
existing in force business october 1st
Existing In-Force Business – October 1st

Small Group

  • About 35% of small employers have existing health plan
  • Most small groups will receive “Early Renewal” offers
  • About 65% of small employers do NOT offer coverage
  • Reconsideration of contribution strategy
  • Employers and their brokers may Shop and Enroll on the 15th of any month for the 1st of next month
what happens on january 1 st
What Happens on January 1st

Prohibited Underwriting:

  • Gender
  • SIC
  • Health status


  • Age
  • Tobacco
  • Geographic area
  • Family unit size
what happens on january 1st
What Happens on January 1st

Uniform Age Banding

  • Implements the 3:1 aged band and prescribes uniform age bands in both the individual and small group markets
    • Child age band.Single age band for children age 0-20.
    • Adult age band. One-year age bands for adults, starting at age 21 and ending at age 63.
    • Older adult age band.Single age band for adults aged 64 or older.
what happens on january 1st1
What Happens on January 1st

Uniform Age Rating Curve

  • Requirement of a uniform age rating curve in each state that all insurers must follow in setting their age-rated premiums.
  • HHS believes this uniformity will simplify several elements of federal health reform and make them more likely to succeed in their implementation by
    • Enhancing transparency, predictability, and accuracy of the risk adjustment program
    • Aiding in the determination of the second lowest cost silver plan to calculate APTC
    • Making it easier for consumers to compare plans
what happens on january 1st2
What Happens on January 1st

Tobacco Surcharge

  • Insurers may impose a premium surcharge of up to 50% on tobacco users. (15% in Colorado)
  • In the small group, this surcharge would be tied to a wellness program so that insurers can impose the charge only if they give enrollees the option of participating in a tobacco cessation program and waive the surcharge for those participants
  • Employers may assign the entire Tobacco Surcharge to employee contributions
what happens on january 1st3
What Happens on January 1st

Family Rating

  • Family members age 21 and older are age and tobacco rated separately
  • The first three children (age 0-20) are rated individually under the child age band
  • Any additional children are not rated

Example to follow…

example of family rating
Example of Family Rating



Adult Child, 24

Child, 20

Child, 17

Child, 14

= Family members included in premium rate

Child, 10



what happens on january 1st4
What Happens on January 1st

Employer Contributions

  • HHS outlines two options to determine employer contributions:

1)The ER pays a fixed percentage of each EE’s age-rated premium, or

2)The ER generates a composite or average rate for all employees and then determines ER and EE contributions based on the composite rate

*The ER pays a flat dollar amount or Defined Contribution(still some questions)

what happens on january 1st5
What Happens on January 1st
  • Geographic Rating:States can establish up to 7 geographic rating areas within the state
  • Guaranteed Issue:Requirement that issuers offer coverage to individuals and employers without regard to health status (limited exceptions such as fraud)
  • Guaranteed Renewability:Issuers must renew coverage for individuals and employers (limited exceptions)
  • Single Risk Pool:Issuers must treat the claims experience for their entire book of business in the individual market or small group as a single risk pool
what happens on january 1st6
What Happens on January 1st

Life Change Events

  • HIPAA “Qualifying Events
    • Loss of Employer coverage, reduction of hours
    • Marriage, Divorce, Widowed
    • Birth, Adoption of a child
    • COBRA eligibility for working spouse
  • Changes of Income – up or down 10%
  • Pregnancy
  • Opens a new consumer shopping period
      • 60 days for individuals
      • 30 days for employees
what happens on january 1 st maybe
What Happens on January 1st ????? (maybe)

Sec. 105h Nondiscrimination Rules

Delayed by DOL from original 9/23/10 effective date

  • Carve-Outs no longer allowed
  • Class eligibility no longer allowed
  • “Tiered” contribution schedules no longer allowed
working with brokers and service center
Working with Brokers and Service Center
  • Brokers and Service Center to Provide Technical Support
  • Agent/Broker look-up
  • Foster relationships/partnerships
  • Maintain objectivity
    • Offer “known” broker options
    • Offer additional options
    • Offer Service Center Options
working with the service center
Working with the Service Center
  • Service Center
  • The role of the Service Center is being developed.
    • Factors to considered…
      • Needs and preferences of Small Business Owners
        • In-person assistance
        • Employee informational meetings and open enrollments
        • Plan participants without computer access
      • Group Size (1-5, 5-10, 10-20, 20-50)
thoughts about the emerging market
Thoughts About the Emerging Market
  • Educational Opportunities…
    • Employers with existing coverage
      • Tax Credit - Small Business Tax Credit Estimator
      • Enhanced Choice - to driveaffordability
      • Consider January Deductible cycle planning
    • Employers without group health coverage
      • Many will facilitate coverage for employees into the Individual Market Place
        • More to come on this topic…
how can c4hco support you
How can C4HCO Support You?

What plans do you have for outreach and education?

How can we support your efforts?

technical questions
Technical Questions?