Business Insurance | DISB | Doing Business 2.0

DoingBusiness2.0: Business Insurance
Philip Barlow, Associate Commissioner
D.C. Department of Insurance,
Securities and Banking
May 15, 2013

Small Group Health Insurance Under
Health Care Reform
1. Goals of the Health Care Reform
2. How the DC Marketplace Exchange Will Help Small
Businesses
3. What’s New as a Result of Health Care Reform?
4. Marketplace Exchange
5. Questions
Presentation Overview
2 | DoingBusiness2.0: Business Insurance

• Provide access to needed medical care and financial
security
– Health insurance must work for you when you are
sick not just when you are healthy
• Create a real private market where individuals and
small businesses are in the driver’s seat
– Insurers compete based on quality and efficiency
(Marketplace Exchanges)
• Provide more options and better prices
Goals of the Health Care Law

• Providing health insurance for employees is the most
expensive benefit offered by employers. It is also a
useful benefit to help attract and retain good
employees.
• Health care reform includes several benefits for
small business owners.
• Under the federal health care reform legislation,
starting in 2014 many businesses will be required to
offer health insurance to their employees or pay a
fine.
How the DC Marketplace Exchange Will
Help Small Businesses

More Choices
More Options
Real Price Competition
Better Benefits

1. MORE CHOICES
In the current marketplace, most small businesses cannot offer their
employees a choice of health insurers and choice of policies. The
Marketplace Exchange creates new options for small businesses to offer
their employees choices of insurers and policies and employers can
decide what kind of choices to provide.
– The Marketplace Exchange has invited all carriers to participate in the
marketplace and has placed no limits on the number of plans they
offer as long as they meet the minimum requirements;
– Carriers can offer additional benefits – beyond the essential health
benefits – for employers and individuals who want them; and
– All grandfathered plans are exempt.

2. MORE OPTIONS
Today, most small businesses can offer policies from only one carrier. The
Marketplace Exchange gives small businesses new options including the
ability to offer:
– A choice of all carriers and all policies in a metal level (i.e., Silver);
– A choice of plans offered by one carrier in two contiguous metal levels
(i.e., Bronze and Silver); or
– The traditional model of one carrier and one policy

HEALTH CARE POLICY METAL LEVELS
• The four metal levels of coverage are based on “actuarial value.” Actuarial
value indicates the percentage of health costs that, for an average
population, would be covered by the health plan. The four levels provided
in the ACA are:
• Bronze: 60%
• Silver: 70%
• Gold: 80%
• Platinum: 90%
In other words, for a bronze plan, the health plan would cover 60% of the cost
for an average population and enrollees (on average) would cover 40%. For a
platinum plan, an average individual would pay 10% out of pocket for their
covered benefits and the plan would pay 90%.

3. REAL PRICE COMPETITION
National studies indicate small businesses pay an average of 18% more
than larger companies. The D.C. Marketplace Exchange will help slow the
growth in premiums and create more stability in future rates by:
– Creating one big marketplace for small group policies will combine the
purchasing power of small businesses by enlarging the pool of covered lives;
– Insurers will be required to display their prices, benefits, and other important
information in one, easy-to-use website, allowing employers to compare prices
and products and choose those that best fit their needs and budgets; and
– Providing a transition that allows small employers to renew existing coverage
in the current market before moving to the Exchange Marketplace in 2015.

4. BETTER BENEFITS
Some small group policies sold today lack the comprehensive benefits that
employers want to protect their workers’ health. The Marketplace
Exchange will ensure policies will include the kind of comprehensive
coverage employees need.
– Parity of treatment of mental health and substance use disorders
without day or visit limitations;
– Inclusion of one or more drugs in each category of covered
medications in a plan’s drug formulary; and
– Defining covered habilitative services to include treatment of autism
spectrum disorder.

NEW BENEFITS
• All individual and small group policies must cover
“essential health benefits” (EHB)
• Policies also must fully cover (with no cost-sharing)
recommended preventive care
• Coverage for behavioral health must be equal to
coverage for physical health (i.e., parity)
• Annual and lifetime limits on EHB prohibited
What’s New as a Result of Health Care
Reform?

ESSENTIAL HEALTH BENEFITS
• Doctor visits
• Hospital care, including ER visits
• Maternity and newborn care
• Prescription drugs
• Mental health and substance abuse services
• Lab services
• Preventive and wellness benefits
• Rehabilitative and habilitative services and devices
• Dental and eye care for children
Reform?

NEW RIGHTS
• Private insurance reforms
– Access to private health insurance guaranteed
– Pre-existing conditions must be covered
– Rates based on health or claims, gender,
occupation/industry, and tobacco usage are
prohibited; age limited to 3 to 1
– Can’t charge small businesses higher rates
– Can’t cancel/rescind coverage
Reform?

BETTER QUALITY
• The legislation improves the quality of coverage by:
– Requiring 100% parity for mental health and
substance abuse services without limits on visits or
days;
– Not allowing substitution of benefits within the EHB
(this protects against weakening coverage);
– Ensuring essential prescription drug coverage; and
– Clarifying that treatment for applied behavioral
analysis for autism is covered under habilitative care
Reform?

What is the Marketplace Exchange?
• A one-stop shop to compare plans, choose coverage, and pay
premiums
• Transparent marketplace with easy-to-understand information
about health plans
Who is Eligible to Use an Exchange?
• Small businesses (up to 50 employees) and their employees
How is Coverage Paid for?
• One payment for all coverage made to the Marketplace.
• Small businesses are eligible for federal tax credits on a
sliding scale to ensure affordability.
Marketplace Exchange

Will the Marketplace change the way small businesses
provide health insurance for employees? Yes and No
YES
• Employers will have greater flexibility to offer multiple
carriers and plans to their employees.
• Businesses will get the benefit of being pooled with other
companies for greater purchasing power.
• Businesses will have access to all plans available in the
Marketplace.
• Greater transparency in comparing plans and options.

Will the Marketplace change the way small businesses
provide health insurance for employees? Yes and No
NO
• Businesses can continue to use the agent or broker of
their choice to help them select coverage.
• The same carriers that provide employer group insurance
now will still be offering coverage in the Marketplace (with
some new carriers as well).
• Even if employees choose multiple carriers, the business
will still just deal with one entity (Marketplace Exchange)
for payment and administrative issues.

Questions?

Business Insurance | DISB | Doing Business 2.0

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