road to 2016 - insurance marketing center...• 2016 will be the transitional year—portfolio...

6/9/2015

1

What you need to know

Road to 2016

6/9/2015

2

Agenda

2

Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

• 51-100 ACA Overview and Potential Implications

• 2016 51-100 State Specific Updates: DC, MD, VA, WV

• Specific Changes Potentially Impacting 51-100

Groups: New Benefits, New Products, New Rating

Methodology

• UnitedHealthcare Aligned Solutions for 51-100 groups

Plans and products mentioned in this presentation are underwritten by the following licenses:

6/9/2015

3

51-100 ACA Overview and Potential Implications

3


• For plan years beginning in 2016, the Affordable Care Act (ACA) expands the definition of small employers to include those with up to 100 employees.

• Unless a group is located in a Transitional Relief State (or other similar program deferring ACA requirements), groups with 51-100 employees must abide by the rules and regulations governing the small group market (2-50), related to:

o benefit coverageo actuarial valueo premium rating restrictions

• The small group rules apply to ALL fully insured plans both on and off (SHOP) marketplaces.

• Small Groups with fewer than 100 employees will be polled together for premium rating purposes

• More restrictive rating rules: Could increase or reduce relative premiums for groups

• The ACA’s shared-responsibility provisions (already applicable to groups of 100 and above)-will apply to groups of 50-100 employees in 2016: possible employer penalties if employees obtain subsidized coverage in an exchange and either don’t offer coverage or offer coverage that doesn’t meet minimum value and affordability requirements

6/9/2015

4

Washington DC Update

4


Review of 2-50 Business• Effective January 2014-SHOP only for New Business (or Groups Changing

Carriers)

• Effective January 2016 All Renewal Business must be processed through the SHOP. Specific Process is still being determined

Review of 51-100 Business• DC SHOP recommendation, with support from several constituents to delay

implementation of 51-100 groups to purchase solely through SHOP

• DISB issued its 2016 Transitional Relief policy:

• Groups with 51-100 FTEs can continue to purchase large group policies through December 31, 2015, and renew on or before October 1, 2016.

• All new group policies on or after January 1, 2016, must purchase ACA compliant plans and, according to the notice, may renew via the DC Health Link (Exchange)

• All Savers Small Group ASO is currently not available in DC

6/9/2015

5

Virginia and West Virginia Update

5


Review of 51-100 Business

• Virginia and West Virginia are Transitional Relief States

• UnitedHealthcare’s Transitional Relief Program offers Virginia and West Virginia small businesses sized 51-100 an extension on the reform-compliant plan requirements for 2016

• Enroll clients in this program in 2015, and they may be able to keep their current (or get a similar) plan until October 2017

Review of 2-50 Business• Virginia and West Virginia opted to utilize Federally Facilitated Marketplace

(FFM) for 2-50 Business

• UnitedHealthcare will participate on the Virginia Individual Exchange in 2016

6/9/2015

6

Maryland Update

6



• Maryland has a state-based SHOP Operational Model - Maryland Health Connection

• Quoting on MD SHOP active 01/01/14 for 03/01/14 Effective Dates

• UnitedHealthcare participates on the IEX and SHOP


• There is no information at this time advising that Maryland will attempt to delay implementation of ACA requirements for 51-100 business

6/9/2015

7

Pricing changes, Adjusted Community Rating (ACR) and Taxes and Fees

6/9/2015

8

Adjusted Community RatingGroup Definition will be changing

• Group definition in 2016: 51 – 100• Counting methodology:

Maryland = FTE Washington, DC = ATNEVirginia = ATNEWest Virginia = Eligibles

Price Restrictions – Fair Health Insurance Premiums• Applies to 2 – 100 fully insured group health insurance• Single risk pool • Guaranteed issue and renewability

8


• Gender• Health Status• Claims History• Medical Underwriting• Group Size• Industry

• Geographic area• Age (3:1 limit)• Tobacco Use (1.5:1 limit)

Group Rate Factors are limited to Rates may not vary by

6/9/2015

9

Pricing

Additional Rating Factors Being Eliminated or Changed• Size Factors (eliminated)• Gender differentiation (eliminated)• Typically 10-1 Age slope (changed/reduced)

9


Healthiest or Newest groups and Lowest Rate

Less Healthy or Longest Duration groups and Highest Rate

Current StateHigh

MRRF

Current StateHigh

MRRF

Future StateMRRF

1.0

Future StateMRRF

1.0

Current StateLow

MRRF

6/9/2015

10

51-100 Potential Benefit, Product and Rating ChangesThe following information would apply to groups not sitused in a Transitional

Relief State (no delay in ACA requirements), or a group that decides not to

implement Transitional Relief

6/9/2015

11

On the horizon• Expanded Benefits• Rating Changes• Taxes and Fees• Reporting

Requirements

What Potentially happens to 51-100 in 2016?

11


PremiumPremium

ATNECounting

Methodology

ATNECounting

Methodology

Ban onPre-ExBan onPre-Ex

NoMedical

Underwriting

NoMedical

Underwriting

ActuarialValue

ActuarialValue

EssentialHealth

Benefits

EssentialHealth

Benefits

3Rs—Risk Adjustment,

Reinsurance,Risk Corridors

3Rs—Risk Adjustment,

Reinsurance,Risk Corridors

AdjustedCommunity

Rating

AdjustedCommunity

Rating

GuaranteedIssue

GuaranteedIssue

Exchanges/Single Risk

Pool

Exchanges/Single Risk

Pool

InsurerFee

InsurerFee

The resulting landscape• Fees/taxes and benefit

requirements and rating will affect the cost of health care for employers during the next several years

• 2016 will be the transitional year—portfolio changes, renewal packages and quoting are undergoing system development work now to be ready for January 2016

• Many of the 2016 provisions take effect on a groups first renewal or new business effective date on or after 1/1/16 (e.g., adjusted community rating, product rules)

6/9/2015

12

Potential ACA Implications for 51-100 Business

12


6/9/2015

13

Expanded benefitsReform provisions impacting product & plan design

13


EHB Categories1. Ambulatory patient services

2. Emergency services

3. Hospitalization

4. Laboratory services

5. Maternity & newborn care

6. Mental health and substance abuse services, including behavioral health treatment

7. Prescription drugs

8. Rehabilitative and habilitative services & devices

9. Preventive and wellness services and chronic disease management

10.Pediatric services, including oral and vision care

Individual and small group plans must provide Essential Health Benefits PackageFour components of package:

Essential Health Benefits• 10 required coverage categories1

Out-of-Pocket Maximum • New accumulation rules and ceiling2

Small group deductible ceiling • $2,000 single/$4,000 family3

Limited to “Metallic” coverage levels • Bronze, Silver, Gold, Platinum4

6/9/2015

14

* Grandfathered plans exempt from above requirements

Expanded benefits package*Components impacting plan design

Essential Health Benefits10 required coverage categories

• Most are already provided in existing plans• Pediatric dental and vision is not covered in groups

51-100 • “Habilitative services” are not covered in groups 51-

100, but are indirectly by UnitedHealthcare• HHS delegated EHB definition via “benchmark

plans” to states • Practical impact - State mandates will be required

by EHB• Pricing impact varies by market• All plans including self-funded that contain any EHB

are required to remove annual and lifetime dollar limits for those services

14


6/9/2015

15

Expanded benefits package* Components impacting plan design

15


Out-of-Pocket Maximum – New accumulation rules and ceiling• OOPM H.S.A. ceiling increased by $100 for Single and $200 for Family from 2015 to

$6,550/13,100• All cost-sharing (for essential health benefits) must accumulate to OOPM• Applies to small and large fully insured and self-funded plans• Does not apply to out-of-network benefits• Transition rules provide flexibility for ‘separate service providers’ for one year.**

* Grandfathered plans exempt from above requirements** Anticipating more guidance.

Small group deductible ceiling – $2,000 single/$4,000 family• Indexed to inflation• Possible exception for leaner plans if you cannot “reasonably” design one with a $2,000

deductible**• Applies to small group fully insured only; Not to individual, large group or self-funded• Does not apply to out-of-network benefits

Limited to “Metallic” coverage levels (Bronze, Silver, Gold, Platinum)• Applies on and off Exchange• Defined by actuarial value (plus/minus 2%): Bronze 60%, Silver 70%, Gold 80%, Platinum

90%; as calculated by new ‘actuarial value calculator’• Federal requirement to offer one Silver, one Gold plan on Exchanges

6/9/2015

16

90% actuarial

value80% actuarial

value 60% actuarial

value

70% actuarial

value

Target + or – 2%

Applies in small group market on and off Exchange

Exchanges must offer a silver/

subsidized silver and gold plan

Current portfolio centers substantially around the Gold plan level, although this varies by market

Metallic levels and actuarial value

16


Platinum Plan

Gold Plan

Bronze Plan

Silver Plan

Plans falling between the defined levels are NOT permitted

6/9/2015

17

Taxes and fees overview

17


Description Effective Date

Timing / Duration

Payment Cycle

Segment Impact

Basis of Assessment

PCORI Research Fee

• Help fund Patient-Centered Outcomes Research Institute

• Will assist patients, clinicians, purchasers and policy-makers in making informed health decisions by advancing the quality and relevance of evidence-based medicine through the synthesis and dissemination of comparative clinical effectiveness research findings

10/1/12 Begins 2012Phases out

2019

July 31(calendar year

following end of plan year)

FI and ASO(ASO paid and

remitted by customer)

Groups and Individuals

$1 pmpy in year 1$2 pmpy in year 2

Insurer Fee

• Annual fee on health insurance sector, allocated by market share, to fund health insurance exchange subsidies

• Fees assessed on net written health insurance premiums, with certain exclusions.

• No federal guidance received to date

1/1/14 PermanentNo later than

September 30 of calendar year

FI Only


Industry wide targets$8B – 2014

$11.3B – 2015 $11.3B – 2016$13.9B – 2017$14.3B – 2018

~ 2.3% of premium

Transitional Reinsurance Fee

• Transitional fees to stabilize individual market; assessed on a per capita basis for both fully insured and ASO members

• Fee funds reinsurance for high claimants in non-grandfathered individual market plans, on and off Exchange

• Final Rule from CCIIO; proposed rule of benefit and payment parameters received Nov. 30, 2012. Final rule pending.

1/1/14 3 Years

(2014-2016)

Annual basis for state and federal

First payment to be remitted by

1/15/15 for 2014 calendar year

FI and ASO


Industry-wide federal targets, to which states

may add:$12B – 2014$8B – 2015$5B – 2016~ $6 pmpm

Risk Adjustment Fee

• Administrative expenses for the risk adjustment program will be supported by a user fee, estimated to be no more than $1.00 per enrollee per year.

• This user fee will be collected from issuers of risk adjusted plans in June of the year following the benefit year.

1/1/2014Permanent

June (calendar year

following end of plan year)

Individual and small group plans

in and out of Exchange

Zero sum redistribution of premiums from plans with healthier populations to plans with unhealthier

populationsAdministrative costs is

~$1 pmpy in year 1

Projections based on analysis of study by Oliver Wyman & AHIP 2012

6/9/2015

18

Aligned 51-100 SolutionsAlternate Plan Year Renewals with Rate Certainty

Transitional Relief with Rate Certainty

Rate Negotiations

6/9/2015

19

51-100 Alternate Plan Year Renewals-Maryland

19


Target Customers

• For Maryland 51-100 groups written by UHC in 2015 and renew prior to October 1, 2016

• Healthy groups that could save a lot of money by avoiding ACR

• Groups not averse to a deductible reset

• Those who would like to defer adjusted community rating and EHBs

How it Works

• New Business prospects and UHC in force groups must renew early on 12/01/2015 (delaying ACA for 01/01/2016)

• To promote the best offer for any 51-100 group, underwriting will provide rates for an Alternate Plan Year Renewals renewal as well as an ACA renewal in late summer/fall

6/9/2015

20

51-100 Transitional Relief with Rate Certainty-Virginia and DC

20


Target Customers• For Virginia 51-100 groups written by UHC in 2015 • Healthy groups that could save a lot of money by

avoiding ACR• Not averse to a deductible reset • That would like to defer adjusted community rating and

EHB’s How it Works• TR can be applied to renewals that fall between

1/1/15 and 1/1/16• Guidance limits TR renewals to maximum of 10/1/16

(through the 9/30/17 renewal)• An employer that already moved to an ACA

compatible plan may not move back (For this reason, we are electing not to have an active TR program for 2-50 size groups- most have already moved to ACA plans

Rate Certainty• Rate Certainty Offers will be provided for the second

renewal period (10/1/16-10/1/17) and are based on the underwriting evaluation of risk factors for each group.

Transitional relief plans are not required to include all ACA provisions, including but not limited to:

• Adjusted community rating for health care coverage premiums

• Coverage for all 10 Essential Health Benefits categories

6/9/2015

21

Special Programs for New Business and Renewing UHC Customers 51-100

21


• For groups that renew starting in July, UHC will provide a competitive 12-month renewal offer. For groups that want to renew early on 10/1, UHC will provide a new rate certainty offer for the next 12-month period, providing rate stability to October, 2016. The deductibles will reset on 10/1/15.

• Any 51-99 new business customer with a 3rd or 4th quarter, 2015, effective date (July, 2015 – December, 2015) will receive negotiated rates.

• For our All Savers Product, we are excited to announce that we can accommodate a deductible credit back to the original plan year effective date for the group.

6/9/2015

22

QUESTIONS?

road to 2016 - insurance marketing center...• 2016 will be the transitional year—portfolio...

Documents