INTRODUCTION TO ACA

Question 1

WHAT IF THE AFFORDABLE CARE ACT?

Answer 1

The Affordable Care Act (ACA) was signed into law in 2010.

The focus of the law is to help people afford insurance, expand coverage, control health, care costs and improve the health care delivery system.

• I t is intended to lower costs and increase benefits for consumers and give incentives for quality and innovation in our health care system. In addition, the ACA includes critical funding for public health and prevention to primarily focus on preventing disease and promoting good health by providing the resources and creating environments that help people stay healthy.

The ACA required each state to choose to run its own health plan marketplace or to participate in the federal marketplace.
New York State chose to establish its own marketplace, called the NY State of Health.

Question 2

WHAT ARE THE GOALS OF THE AFFORDABLE CARE ACT (ACA)?

Answer 2

The affordable Care Act has two major goals:

1. Introduce new protections for people who have insurance.
   - Individuals cannot be denied coverage because of pre-existing conditions.
   - All insurance carriers must allow health coverage for dependents up to age 26.
   - Insurance companies cannot put annual jr lifetime dollar limits on coverage.
   - Prohibits biased treatment based on age, race, gender, religion, disability, sexual orientation, and gender identity.
2. Increase access to health care coverage for all Americans.

• the ACA created State and Federal marketplaces where consumers may have their eligibility determined and/or purchase health insurance.
• Offers full cost insurance as well as discounts for many consumers via subsidies based on household income.
• Expanded Medicaid eligibility.

Question 3

ACA FOR ALL INDIVIDUALS AND FAMILIES :

Answer 3

Coverage for dependent children to age 26.

The ACA permits young adults up to age 26 to remain on their parent’ s insurance. In New York State, a rider may be added to allow dependents through age 29 on their parent’s policy.

Cannot be denied coverage because of pre-existing conditions.

NY State requ4rs insurers to cover all employees and individuals including those with pre-existing conditions. Other state did not have the same rule and, prior to the ACA, insurance companies in several other states were allowed to deny coverage because they were already sick (called pre-existing conditions). As part of the ACA, insurers throughout the country cannot deny coverage for pre-existing conditions like heart disease, cancer, asthma, etc.

Eliminates annual and lifetime dollar limits on coverage.

Insurance companies can no longer place an annual or lifetime dollar limit on coverage. insurance companies may still have annual or lifetime visit limits on coverage.

Question 4

ACA CREATION OF HEALTH INSURANCE MARKETPLACES

Answer 4

In April 20, 2012, Governor Cuomo signed an Executive Order to create an Exchange in New York and in July 2021 announced that New York would run its own Health Plan Marketplace, which is called NY State of Health. New York State residents who apply through the Federal Marketplace will be directed to the NY State of Health.

-Establishment of federal subsidies for individuals and small business:

Eligible individuals may receive federal assistance when purchasing health insurance through the NY State of Health. Small business owners may be eligible for tax credits for two (2) consecutive years if they provide health care coverage to their employees and meet all other criteria.

• Expansion of Medicaid:

By expanding eligibility criteria for Medicaid, more New Yorker are eligible for public health insurance.

Question 5

ACA - MEDICAL LOSS RATIO:

Answer 5

Many insurance companies spend a substantial portion of consumer’s premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing. The ACA controls this by requiring all insurance companies in all states to adhere to the Medical Loss Ratio requirements.

ACA requires health insurance carriers to submit data on the amount of premium revenues spent on clinical services and quality improvement to the NYS Department of Financial Services. Issue rebates to enrollees if the percentage does not meet minimum standards.

• The Medical Loss Ratio is the amount of revenues spent by an insurer on clinical services and quality improvement vs. administrative and overhead costs such as marketing and commissions. When the Medical Loss Ratio is too low, this means the insurer is spending too little on improving the quality of care and/or medial services.
• MLR Percentage - 80.20 is the Medical Loss Ratio for small group and individual plans; 85/15 is the MLR for large group plans. If the insurance company isn’t spending at least 80 or 85 cents o the dollar for medical services and quality improvement, the insurance company will have to provide a rebate.
• Reporting MLR to Dept. of Financial Services - Companies will be required to report their Medical Loss ratios to the state DFS.

Question 6

ACA MEDICAL LOSS RATIO 80/20:

Answer 6

MLR PERCENTAGE 80/20:
MLR Percentage - 80/20 is the Medical Loss Ration for small group and individual plans. If the insurance company isn’t spending at least 80 cents on the dollar for medical services and quality improvement, the insurance company will have to provide a rebate.

Question 7

ACA MEDICAL LOSS RATIO 80/15:

Answer 7

MLR Percentage is the MLR for large group plans. If the insurance company isn’t spending at least 85 cents on the dollar for medical services and quality improvement , the insurance company will have to provide a rebate.

Question 8

CAN A NEW YORK STATE RESIDENT APPLY IN THE FEDERAL MARKETPLACE?

Answer 8

No. They will be directed to the NY State of Health.

Question 9

ACA - THE EMPLOYER MANDATE

Answer 9

The Affordable Car Act (ACA) does not requires small groups with less than 50 employees to provide health coverage to their employees; its not mandatory for small group employees to provide health coverage to their employees if they have less than 50 employees.

Larger employers (over 50 employees) must provide health coverage or face penalties if they do not make health coverage available.

• Employer must offer health insurance that is affordable and provides minimum value to 95% of their full-time employees and their children up to age 26 or be subject to penalties. It applies to employers with 50 or more full-time equivalent employees, and/ or full-time equivalents (FTE). Employees who work 30 or more hours per week are considered full-time.

Question 10

WHAT IS FFM?

Answer 10

Federally Facilitated Marketplace

The Federally Facilitated Marketplace (FFM) is an organized marketplace for health insurance plans operated by the U.S. Department of Health and Human Services (HHS). The FFM opened for enrollments starting October 1, 2013.[1] The Federally Facilitated Marketplace is established in a state by the HHS Secretary for states that chose not to set up their own marketplace or did not get approval for one.[2]

Individuals (i.e. citizens of a state) and employers will have the ability to find and purchase Qualified Health Plans through the FFM and its partners.[1] Individuals will be able to qualify for and receive Advance Premium Tax Credits (APTC) which can be used to subsidize their premium obligations. Individuals can also qualify for Cost Sharing Reductions (CSRs) which would reduce their out-of-pocket expenses for healthcare.

Question 11

WHAT ARE THE 10 ESSENTIAL HEALTH BENEFITS (EHBs)?

Answer 11

Essential Health Benefits Ensure That Health Plans Cover Care That Patients Need
EHB requirements ensure that everyone in the individual and small group health insurance markets has access to comprehensive coverage that actually covers the services they need. These essential health benefits fall into 10 categories:

1. Ambulatory patient services (outpatient services)
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care.

NOTE: Companies can offer additional products and services in addition to these 10 EHBs, however, these benefits are optional for the provider and not necessarily offered by all providers in a market.

Question 12

WHAT IS A CATASTROPHIC HEALTH PLAN?

Answer 12

Catastrophic health plan:

Health plans that meet all of the requirements applicable to other Qualified Health Plans (QHPs) but don’t cover any benefits other than 3 primary care visits per year before the plan’s deductible is met.
The premium amount you pay each month for health care is generally lower than for other QHPs, but the out-of-pocket costs for deductibles, copayments, and coinsurance are generally higher. To qualify for a Catastrophic plan, you must be under 30 years old OR qualify for a “hardship” or “affordability” exemption if you’re over 30.

Catastrophic Health Plans

have high deductibles and generally lower premiums.

• Consumers pay all medical costs for covered care up to the annual limit on cost sharing for the plan year.
• Catastrophic Health Plans must include at least 3 primary care visits per year and certain recommended preventive services with no out-of-pocket costs before the plan’s deductible is met.
• Protects consumers from high out-of-pocket costs.

Question 13

WHO IS ELIGIBLE FOR COVERAGE THROUGH A MARKETPLACE?

Answer 13

Are you eligible to use the Marketplace?

To be eligible to enroll in health coverage through the Marketplace, individuals and family households:
-Must live in the United States (in a state served my the marketplace).

-Must be a U.S. citizen or national (or be lawfully present- eligible immigration statuses).

-Can’t be incarcerated (unless pending disposition of charges prior to the effective date). So, if they are in jail now, but will be out of jail prior to the date the health plan goes into effect, then the incarceration is Okay.

-If you have Medicare coverage, you’re not eligible to use the

Question 14

ADVANCE PREMIUM TAX CREDIT (APTC)

Answer 14

If a consumer has an annual household income between 100% and 400% of the Federal Poverty Level (FPL), they may qualify for APTCs. This 400% threshold was removed with the implementation of the ARPA law in 2021, but may return to its standard levels once that term in the ARPA expires.

APTCs are only available to consumers who enroll in an individual market marketplace plan through the Marketplace.
- Eligible consumers can use all, some, or none of their APTC’s in advance to lower their monthly premiums – these are called advance payments of the premium tax credit (APTC).

If a consumer is ineligible for Medicaid based on immigration status, they may be eligible to enroll in a Marketplace plan with Advance Premium Tax Credit even if they’re under 100% of the FPL, if they are otherwise eligible.

Question 15

If a consumer is ineligible for Medicaid based on immigration status, may they be eligible to enroll in a Marketplace plan with Advance Premium Tax Credit (APTC)?

Answer 15

Yes. If a consumer is ineligible for Medicaid based on immigration status, they may be eligible to enroll in a Marketplace plan with Advance Premium Tax Credit even if they’re under 100% of the FPL, if they are otherwise eligible.

Question 16

RECONCILING APTC (ADVANCED PREMIUM TAX CREDIT)

Answer 16

The amount of APTC a consumer is eligible for may change throughout the coverage year, if there are changes to the consumer’s household income, household size, or other determining factors.

• It’s important that consumers report life changes to the marketplace or to their broker.
• When consumers file their income taxes, they’ll have to reconcile any ATPC that were paid on their behalf to reduce their monthly premiums with the amount they were ultimately eligible for based on their actual annual household income.
• If consumers use APTC in excess of the amount they are determined eligible for, they may be required to repay all or some of the difference when they file their federal income tax return.
• however, if the consumers use less APTC than they’re determined eligible for, when they file their income tax return, they may receive the difference as a refundable credit.
• Some consumers who apply for coverage through the Marketplace and qualify for APTC might also be qualified for Cost-Sharing Reductions.

Question 17

COST-SHARING REDUCTIONS (CSRs)?

Answer 17

Some consumers who apply for coverage through the Marketplace and qualify for APTC might also be qualified for Cost-Sharing Reductions.

To be eligible for CSRs based on income, consumers must:

1. have a household income between 100% and 250% of the FPL;
2. be eligible for the Advanced Premium Tax Credit (APTC).
3. enroll in a Silver Plan through the Marketplace ONLY in order to qualify for Cost-Sharing Reductions. (The reason for this is because a Silver Plan with Cost-Sharing Reduction becomes a better Plan than the Gold Plan; and in some cases, better than the Platinum Plan because the Cost-Sharing Reductions would reduce their deductible, coinsurance, and co-pays to less than what the Gold Plan might otherwise offer.

Question 18

WHEN TO ENROLL

Answer 18

Eligible consumers can enroll in or change marketplace plans during the annual OPEN ENROLLMENT PERIOD (OEP) or during a SPECIAL ENROLLMENT PERIOD (SEP).
EXCEPTION: Alaskan Indian (AI) and American Native (AN) consumers can enroll in the marketplace or change plans throughout the year, not just during the yearly OEP or during SEP. They can change anytime; even month-to-month if they choose.

In the FFM and most states, for individuals and families, the OEP starts on November 1 and ends on December 15.

In most cases coverage can begin as soon as January 1 for consumers who enrolled by December 15.

Question 19

PREMIUM PAYMENT

Answer 19

For coverage to become effective consumers generally must pay the first month’s premium directly to their insurance company by their insurer’s deadline.

Consumers must pay the premium each month or they could ljose coverage.
Issuers of individual and family Marketplace Plans must accept at least these payment methods:
- Paper Check
- Money Order
- Electronic Fund Transfer (ETF)
- General-purpose Pre-paid Debit Card

CASH MAY NOT EVER BE ACCEPTED BY THE INSURER OR THE BROKER

Some issuers may also accept online credit card, or debit card payments, but no company will accept cash or cash gift cards for payments.

Question 20

MEDICAID AND THE MARKETPLACE:

Answer 20

Medicaid and CHIP provide free or low-cost health coverage to millions of Americans, including some low-income people, families and children, pregnant women, the elderly, and people with disabilities.

Some state have expanded their Medicaid program to cover all people at or below 133% of the FPL

Consumers who are eligible for Medicaid or CHIP coverage are generally not eligible for financial assistance through the Marketplace; and they can never have both plans – Medicaid/CHIP and Marketplace Plans.
BROKERS/AGENTS DO NOT GET PAID FOR HELPING THEM ENROLL IN MEDICAD/CHIP; but should help with the process so if they are declined, the broker/agent can help them enroll in a Marketplace Plan.

Therefore, brokers/agents should refer consumer directly to Medicaid and not manage these enrollment on their own.

It is important that consumers close to age 65 who are applying for coverage through a Marketplace know about the benefits of enrolling in Medicare as soon as they become eligible.

Consumer wo don’t sign up for Medicare during their Initial Enrollment Period (IEP) and don’t have job-based coverage based on current employment (or a spouse’s employment), including coverage through a SHOP Market place or an individual Health Reimbursement Arrangement (HRA), may have to pay higher premiums when they sign up for Medicare later.

Consumers cannot have Marketplace coverage if they are eligible for Medicare. (If they do, they will end up having to pay their entire Advance Premium Tax Credit (APTC) back when they file their income tax.)

NOTE: Consumer who already have Medicare generally cannot enroll in Marketplace plans THROUGH A MARKETPLACE because it’s against the law for a private insurer to sell a Marketplace Plan to someone who has Medicare coverage when the insurer knows the plan will provide duplicate benefits.

Question 21

JOB-BASED COVERAGE AND THE MARKETPLACE:

Answer 21

Many Americans have health insurance through their employer or a family member’s employer.

Consumers who are eligible for job-based coverage are generally not eligible for financial assistance through the Marketplace, unless their job-based coverage is considered unaffordable or doesn’t meet certain coverage standards.

Question 22

SHORT-TERM, LIMITED -DURATION INSURANCE:

Answer 22

Short-term, limited-duration insurance is a type of health insurance coverage that is designed to fill temporary gaps in coverage. (THIS GENERALLY SHOULD NOT BE SOLD AS PRIMARY INSURANCE.)

Generally, short-term plans offer coverage when an individual is transitioning from one plan or coverage to another form of coverage; moving from one state to another; a person who is waiter for the Open Enrollment Period (OEP).

Short-term Plans are exempted from the federal definition of individual health insurance coverage and are not subjected to PPACA individual market provisions/laws.

Short-term Plans aren’t considered Minimal Essential Coverage (MEC) and aren’t sold through the Marketplaces and should not be considered a primary health care solution; the also do not qualify for tax credits.

Question 23

MINIMAL ESSENTIAL COVERAGE (MEC)

Answer 23

Minimum essential coverage (MEC)
Any insurance plan that meets the Affordable Care Act requirement for having health coverage. To avoid the penalty for not having insurance for plans 2018 and earlier, you must be enrolled in a plan that qualifies as minimum essential coverage (sometimes called “qualifying health coverage”). Examples of plans that qualify include: Marketplace plans; job-based plans; Medicare; and Medicaid & CHIP.
Note: Starting with the 2019 plan year (for which you’ll file taxes in April 2020), the penalty no longer applies.

Question 24

LIMITED BENEFIT/DEFINED BENEFIT PLANS:

Answer 24

Plans are not sold through the Marketplace but may offer a solution to consumers who get little assistance or no assistance at all; consumers who may not get premium Tax Credit or makes insurance too expensive for them to afford; also people who do not get enough cost-sharing and cannot afford various medical coverages.

Typically, consumers should go with Defined Benefit Plans that provide costs on an RBRVS2 Scale, not a set amount benefit.

Consumers should choose plans recognized as health insurance by the Department or Division of Insurance in their state; if it is not listed as “health insurance”, it should not be used as primary coverage.

Limited benefit plans, and non-recognized plans are considered supplement, and should not be sold as the primary health care solution in any case.

Question 25

WHAT IS THE RBRVS SYSTEM USED TO DETERMINE?

Answer 25

The RBRVS is a system used in the U.S. to calculate the amount of money that insurers will pay healthcare providers for their services. It was developed by the Centers for Medicare and Medicaid Services (CMS) and is also used by other, privately owned insurance companies.

Question 26

What is the purpose of the Mental Health Parity and Addiction Equity Act?

Answer 26

The Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 requires health insurers and group health plans that offer mental health and substance use disorder benefits to provide the same level of benefits for mental and/or substance use treatment and services that they do for medical/surgical care.

Question 27

CONSUMER PROTECTIONS:

Answer 27

Health insurance issuers must:
- offer all of their available non-grandfathered group and individual market policies to any eligible individual or employer in the state (tis reform is called “guaranteed issue”);
- must not limit or exclude coverage due to pre-existing health conditions, regardless of the age of the coverd individual;
- must spend the required percentage of premium dollars on medical care or provide a rebate to the individuals and emplers; and
- mustwhen offering non-grandfathered health insurance plans in the individual and small group markets, cover benefits in at least the 10 EHB categories.

Question 28

PLAN CATEGORIES:

Answer 28

There are four plan categories for non-grandfathered individual and small group health insurance plans: Bronze, Silver, Gold, and Platimum. Each of these levels is determined by the AV of the plan design.
- In addition to the four plan categories, issuers in the individual market can offer catastrophic plans to individual under age 30 before the plan year begins, and to individuals age 30 and oder who have a certification from the Marketplace that they qualifty for a hardship or affordability exemption.

Question 29

COST-LIMITS AND RATES

Answer 29

All non-grandfathered health plans must limit cost sharing and out-of-pocket costs.
- Ratess for non-grandfathered coverage in the individual and small group markets can only vary with respect to the particular plan or coverage by age, family composition, geographic area and tobacco use.

Question 30

What is a non-grandfathered plan?

Answer 30

The appeals process is different for non-grandfathered plans and grandfathered plans. If your plan was effective after the Affordable Care Act (ACA) was signed on March 23, 2010, or your plan existed before the ACA, but lost its grandfathered status at renewal, it is a non-grandfathered or “other” plan. These plans are required to offer an appeals process that complies with the ACA.

Question 31

Overview of SHOP: Health insurance for small businesses

Answer 31

The Small Business Health Options Program (SHOP) is for small employers who want to provide health and/or dental insurance to their employees — affordably, flexibly, and conveniently.
To purchase SHOP insurance, your business or non-profit organization generally must have 1 to 50 employees. See if your business qualifies for SHOP.
If eligible, you don’t have to wait for an Open Enrollment Period. You can start offering SHOP coverage to your employees any time of year.

Question 32

THE HEALTH INSURANCE MARKETPLACE:

Answer 32

Each state and the District of Columbia has a Marketplace where individuals or small employees may compare and purchase health insurance.
- The indivudual Marketplace is for individual consumers and their families.
The SHOP is for small employers.

A Marketplace can be established by a state or the federal government.

` Some states operate their own Marketplace know as state-based Marketplaces (SBMs) (which include operation of an individual Marketplace and SHOP).

• If a Sstate does not operate a state-based Marketplace, the Department of Health & Human Services (HHS) operates a Marketplace on the federal Platform, the Federally-Faciltate Marketplace (FFM) in the state.
• Some State-based Marketplaces received HHS approval to untilize the Federal Platform to perform all eligibility and enrollment functions, as well as some consumer assitance functions, for their Individual Marketplace, and in some instances the SHOP, and are considered state-based Marketplaces on the Federal Platform (SBM-FPs)

In thses Marketplaces, agents and brokers must comply with the smae FFAM registration and training requirements before they may facilitat enrollments through the federal platform. State that opoerate an SBN-FP must establish and oversee certain standards for agents, brokers, and QHP issuers that are no less strict than those that apply in the FFM.
- Regardless of Marketplace type, each state maintains its own licensing requirements for agents and brokers.

Question 33

Who is Eligible for APTC?

Answer 33

To be eligible for APTC, an individual (for the year of coverage):

bullet
Must have projected household income that is at least 100 percent of the FPL for the family size of the enrollee (with exceptions for certain non-citizens).

bullet
For coverage years from 2021 through 2025, the income limit to qualify for APTC depends on the costs of plans available based on the consumer’s age and where they live. If the benchmark plan costs more than 8.5 percent of the consumer’s household income, then the consumer could receive APTC if otherwise eligible. For coverage years before 2021 and after 2025 only, also must not be more than 400 percent of the FPL.

bullet
Cannot be claimed as a dependent by another individual.

bullet
If married, must file a joint income tax return (with exceptions for abused or abandoned spouses and individuals who qualify to use a head-of-household tax filing status). The eligibility rules for APTC are the same for all spouses, regardless of sex or gender.

bullet
Must have at least one tax family member (a person claimed on the individual’s income tax return) enrolled in a QHP that is not a catastrophic plan through the Marketplace who is not eligible for other minimum essential coverage (MEC) (including employer-sponsored coverage (ESC) that meets affordability and minimum value standards, most Medicaid, CHIP, Medicare, and certain other forms of coverage).

Question 34

Eligibility for APTC with ESC

Answer 34

ESC is considered unaffordable for an employee if the amount the employee must pay for the lowest-cost self-only plan that meets the minimum value standard is more than a percentage of the worker’s projected household income. The percentage is 9.12% for plan years beginning in 2023.

The IRS finalized a new rule on October 11, 2022, that changed the way affordability is determined for members of an employee’s family. Beginning in 2023, if a consumer has an offer of employer coverage that extends to the employee’s family members, the affordability of that offer of coverage for the family members of the employee will be based on the family premium amount, not the amount the employee must pay for self-only coverage.

A health plan meets the minimum value standard if both of the following apply:

It is designed to pay at least 60% of the total cost of medical services for a standard population.
Its benefits include substantial coverage of physician and inpatient hospital services.
If employees or their family members actually enroll in the ESC, then they are not allowed APTC for their Marketplace coverage regardless of whether the employer plan is affordable or meets the minimum value standard.

Question 35

Income-based CSRs

Answer 35

CSRs reduce out-of-pocket costs, such as deductibles, coinsurance, and copayments, but not balance billing, such as from an out-of-network provider or for non-covered services. Eligibility for income-based CSRs is based on household income and generally requires the individual or family to enroll in a Silver plan category and be eligible for APTC. Agents and brokers are responsible for disclosing to consumers the higher out-of-pocket costs they may experience if they are eligible for CSRs and choose not to enroll in a Silver plan. Note that consumers who are members of federally recognized tribes or shareholders in the Alaska Native Claims Settlement Act (ANCSA) Corporations may receive CSRs if they enroll in a plan in any plan category, and those who qualify for a limited cost-sharing plan do not have to be eligible for APTC.

CSRs are not available for coverage purchased outside of the Marketplace.

Generally, individuals and families with household incomes between 100% and 250% of the FPL may be eligible to receive income-based CSRs. Consumers who are members of federally recognized tribes or ANCSA Corporation shareholders may qualify for additional cost-sharing benefits.