1. O V E R V I E W O F T H E A F F O R D A B L E C A R E A C T
S E P T E M B E R , 2 0 1 3
The New Health Insurance
Marketplace in South Carolina

2. Presentation Overview
 This presentation:
 is designed to provide a basic overview and illustration of
the ACA and its implementation in SC.
 is not a comprehensive overview of the law or the state’s
implementation activities.
 provides a highlight of the more significant provisions of the
law and their impact on insurance regulation and South
Carolina insurance markets.
 Provides some basic information about where consumers
should go for assistance.

3. About the ACA
The ACA:
 Requires most Americans to purchase health insurance
coverage or pay what the ACA calls a "penalty," which
the Supreme Court deemed to be a tax (the "Individual
Mandate"),
 Prohibits insurance companies from denying coverage to
those with preexisting conditions or health issues (i.e.,
guaranteed issue),
 Prohibits insurance companies from charging unhealthy
individuals higher premiums than healthy individuals
(i.e., adjusted community rating), and
 Provides avenues for Americans to acquire health
insurance that provides a minimum basic level of
coverage.

4. Individual Mandate
 Effective January 1, 2014, everyone must have
health insurance coverage
 If a person does not have health insurance coverage,
they may have to pay a penalty in the form of a tax
 In 2014, the penalty is $95 per uninsured person in household
or 1% of annual income whichever is higher
 By 2016, the penalty is $695 or 2.5% of annual income per
uninsured person in household (whichever is higher)
 Some individuals may be exempt from the penalty.
Contact your agent for more details on the eligibility
criteria.

5. Health Insurance Exchanges
 The ACA requires each state to establish an American Health
Benefit Exchange (or “marketplace”) that facilitates the purchase
of qualified health plans in the individual and small group
markets.
 If a state does not establish an Exchange, the HHS Secretary is
required to do so in that state. These are called federally-
facilitated exchanges.
 South Carolina has a federally-facilitated exchange (FFE) for
individuals and small businesses.
 The FFE for individuals is called the “The Health Insurance
Marketplace” and the FFE for small businesses is called the “Small
Business Health Opportunities Program (SHOP)”
 Health insurance products sold inside and outside the Exchange
must contain essential health benefits.

6. Essential Health Benefits
 Health Insurance Must Cover these ten statutorily-prescribed categories:
 Ambulatory patient services
 Emergency services
 Hospitalization
 Maternity and newborn care
 Mental health and substance abuse disorder services, including behavioral
treatment
 Prescription drugs
 Laboratory services
 Preventive/wellness services and chronic disease management
 Pediatric services including oral and vision care
 If the selected EHB does not cover required benefits it must be supplemented.
 States must defray the costs of State-mandated benefits in excess of EHB
 South Carolina’s benchmark plan is the largest plan in the small group market

7. KEY MARKET REFORMS
Immediate Market Reforms
Effective September 23, 2010*
• No Lifetime Limits / Restricted Annual
Dollar Limits
• Rescissions Prohibited except for Fraud or
Intentional Misrepresentation
• Coverage of Preventive Services with No
Cost Sharing
• Coverage of Dependent Children up to
Age 26
• No Pre-existing Condition Exclusions for
Children (Up to Age 19)
• Appeals Process (Internal Review &
External Review)
• Prohibition of Discrimination Based on
Salary
• Access to Primary Care and OB/GYN
Providers and Emergency Services
*6 months following PPACA’s enactment date of March 23, 2010
Additional Market Reforms
Effective January 1, 2014*
 No Annual Dollar Limits
 No Waiting Periods that Exceed 90 Days
 No Pre-existing Condition Exclusions for All
 Guaranteed Issue for All
 Guaranteed Renewability
 Coverage for Individuals Participating in Approved
Cancer Clinical Trials
 Coverage of Essential Health Benefits (as defined by HHS
Secretary), including limits on annual out-of-pocket costs
and required actuarial value tiers
*Health Insurance Exchanges also go into effect at this time (more details on
Exchanges in later slides).

8. ACA Application
 The ACA applies to individual and group health plans
 ACA breaks plans down into certain categories and some are treated
differently
 Small/large
 Grandfathered/non-grandfathered
 Insured/self-insured
 Union/non-union
 Some plans are exempt
 Retiree-only plans (less than 2 participants who are current
employees)
 Spin-off retirees to stand-alone retiree plan
 HIPAA excepted benefits (e.g., stand alone dental, vision, or disease-
specific coverage
 Medical FSA plans (but some provisions are specifically applicable to
Medical FSAs

9. How does the ACA apply to You?
 Understanding exactly how the ACA may apply to consumers is not always
easy.
 The next several slides are designed to provide some guidance on how the
ACA may apply.
 The most important step in figuring out how the ACA applies is
determining whether the health plan is grandfathered or not
 A grandfathered plan is one that was in effect or existence on March 23,
2010
 Grandfathered plans are exempt from some, but not all ACA provisions
 Grandfathered status may be temporary
 Special grandfathering rule for collectively bargained plans
 Insured plan-grandfathered until the last CBA relating to insurance
terminates
 Self-funded plan-general grandfather rules apply
 Employers/Insurers are to provide notice about whether the plan is
grandfathered or not in all employee communications describing plan
benefits

10. ACA Provisions that Apply to All Plans
(including Grandfathered Plans)
All plans (including grandfathered plans) must:
 Provide coverage for adult children up to age 26
 Not include annual or lifetime limits on essential
health benefits
 Not include pre-existing condition exclusion for
enrollees< age 19
 No pre-existing condition exclusions at all in 2014
 Waiting periods limited to 90 days in 2014
 No rescission of coverage except for fraud or
misrepresentation

11. ACA Provisions that Apply to Non-grandfathered
Plans
Non-grandfathered plans are those plans that were not in effect on March
23, 2010, they require:
 Certain preventive care be covered without cost-sharing
 IRS non-discrimination rules extended to insured employer plans
 Pediatrician may be child’s primary care provider
 No pre-authorization or referral required to see OB-GYN
 ER services must be paid at in-network benefit levels and cannot
require pre-authorization
 Insurers must have internal and external claims review processes
 Insurers must disclose certain plan data and design characteristics
 Reports must be made to HHS and enrollees about benefits that
improve wellness
 Limits on out-of-pocket costs payable by participants
 Coverage of routine costs associated with clinical trials

12. Changes that Cause Loss of Grandfathered
Status
Insurers/Employers cannot significantly change the plans or they may lose
the grandfathered status. Examples of changes that could cause a loss of
grandfathered status include:
 Significant changes reducing benefits (e.g., elimination of coverage for
diabetes, cystic fibrosis or HIV/AIDS)
 Significant changes like increasing employee-cost sharing
 Any increase in member coinsurance percentage
 Co-pays must be increased by the greater of $5 or percentage equal to medical inflation
plus 15% cumulative from March 23, 2010
 Deductibles may be increased only by a percentage equal to medical inflation plus 15%
 Decreasing rate of employer contributions by more than 5% of total cost
 Adding or Decreasing annual limits on covered services
 Changing insurers

13. Changes that Do Not Cause Loss of Grandfathered
Status
Insurers/Employers can make some changes without
losing grandfathered status. They include:
 Cost adjustments to reflect medical inflation
 Adding new benefits and limited adjustments to
existing benefits
 Adding new enrollees
 Voluntary adoption of new consumer protections
 Changes to comply with state or federal laws
 If a lifetime limit exists, may add annual dollar limit
not lower than lifetime limit until 2014

14. So… How does all of this affect me?
 The answer depends upon your specific situation
 The next few slides provide a couple of examples to
illustrate how the ACA may impact specific individuals
 Someone who buys insurance directly from the health insurance
market
 Someone who gets coverage through his or her employer
 Someone one on Medicare

15. Example: I purchase my own insurance
 If you buy your own insurance then you have private insurance. Some of the biggest
changes to private insurance begin in 2014. However, many changes affect you now.
Is Your Insurance Grandfathered?
 All of the changes in the Affordable Care Act (ACA) apply to new health plans. Some do
not apply to 'grandfathered' private plans.
 Did you have your current health insurance when the ACA became law on March 23,
2010?
 If yes, then you have a 'grandfathered' plan.
 If no, then you have a 'new' plan.
 A plan stays grandfathered so long as no major changes are made to its terms or
conditions. Major changes include cutting benefits or increasing out-of-pocket costs.
Plans must tell you if they are grandfathered and give contact information for questions.
But, check your plan papers or call your insurer if you are not sure.
So far these changes affect ALL plans:
You…
 CANNOT pay for over-the-counter medicines with your Health Reimbursement/Savings
Account (HRA, HSA) or Flexible Spending Accounts (FSA). You can only buy prescribed
medications with these funds.
 20% tax on unpermitted purchases

16. I purchase my own insurance … cont’d.
 Insurers…
 May NOT deny coverage to children 19 and younger with prior health problems
(often called pre-existing conditions)
 May NOT deny family coverage to parents because they have children with prior
health problems.
 May NOT put lifetime limits on the dollar value of essential health benefits
 May NOT put annual limits on essential health benefits of less than:
 $750,000 for plans that started between Sept. 23, 2010 and Sept. 22, 2011
 $1,250,000 for plans that started between Sept. 23, 2011 and Sept. 22, 2012
 May NOT cancel your coverage if you get sick unless you have lied or committed
fraud
 MUST allow your children to remain on your plan until age 26.
 Until 2014, grandfathered plans only have to do this if your child cannot get
insurance through their own employer.
 In 2014, all plans must cover children until 26 even if they can get insurance
through their own employer.

17. I purchase my own insurance… cont’d.
 MUST use a standardized summary of benefits and explanation of coverage.
 MUST spend 80% of premiums on medical services for individual plans, and 85%
for large group plans. If an insurer spends less than this they must you some
money back.
 This does not apply to self-insured plans.
 These changes only affect NEW plans right now:
 You…
 Can appeal an insurer's decision to an internal insurer review board
 Can appeal an insurers' decision to an independent outside review board once you
have gone through the insurer's internal process
 Insurers…
 MUST cover 100% of the cost of preventive services They cannot charge a co-pay
for these services or require a deductible to be met.
 MUST tell you what your share of the cost is for items and services
 MUST share with the government its rules on payment policies and enrollee
rights.
 May NOT decide whether you are eligible for a certain plan based on your income.

18. I get my coverage through my employer…
 If you get your insurance from your employer then you have private
insurance. Some of the biggest changes to private insurance begin in
2014. However, many changes affect you now.
Is Your Insurance Grandfathered?
 All of the changes in the Affordable Care Act (ACA) apply to new health
plans. Some do not apply to 'grandfathered' private plans.
 Did you have your current health insurance when the ACA became law on
March 23, 2010 and it hasn't been changed in a major way?
 If yes, then you have a 'grandfathered' plan.
 If no, then you have a 'new' plan.
 A plan stays grandfathered so long as no major changes are made to its
terms or conditions. Major changes include cutting benefits or increasing
out-of-pocket costs. Plans must tell you if they are grandfathered and give
contact information for questions. But, check your plan papers or call
your insurer if you are not sure.

19.  So far these changes affect ALL plans:
 You…
 CANNOT pay for over-the-counter medicines with your Health
Reimbursement/Savings Account (HRA, HSA) or Flexible Spending
Accounts (FSA). You can only buy prescribed medications with these
funds.
 20% tax on unpermitted purchases.
Insurers…
 May NOT deny coverage to children 19 and younger with prior health
problems (often called pre-existing conditions)
 May NOT deny family coverage to parents because they have children
with prior health problems.
 May NOT put lifetime limits on the dollar value of essential health
benefits
 May NOT put annual limits on essential health benefits of less than:
 $750,000 for plans that started between Sept. 23, 2010 and Sept. 22,
2011
 $1,250,000 for plans that started between Sept. 23, 2011 and Sept. 22,
2012

20. Insurers…
 May NOT cancel your coverage if you get sick unless you have lied or
committed fraud
 MUST allow your children to remain on your plan until age 26.
 Grandfathered plans only have to do this if your child cannot get
insurance through their own employer.
 In 2014, all plans must cover children until 26 even if they can get
insurance through their own employer.
 MUST use a standardized summary of benefits and explanation of
coverage.
 MUST spend 80% of premiums on medical services for individual
plans, and 85% for large group plans. If an insurer spends less than
this they must you some money back.
 This does not apply to self-insured plans.

21. Employers…
 Must report the cost of your employer-sponsored health insurance on your W-2. This is
so people know how much their health care costs. It is not taxable income.
 Who have more than 200 employees must automatically enroll new full-time employees
in coverage unless the new employee says they do not want to be enrolled.
 These changes only affect NEW plans right now:
You…
 Can appeal an insurer's decision to an internal insurer review board
 Can appeal an insurers' decision to an independent outside review board once you have
gone through the insurer's internal process
Insurers…
 MUST cover 100% of the cost of preventive services (click here for the current list of
these services). They cannot charge a co-pay for these services or require a deductible to
be met.
 MUST tell you what your share of the cost is for items and services
 MUST share with the government its rules on payment policies and enrollee rights.
 May NOT decide whether you are eligible for a certain plan based on your income.
Employers…
 May NOT have rules that only allow high-income employees to enroll in certain plans.
All employees must have the option of enrolling in all health insurance plans offered.


22. I already have insurance…
I already have insurance
 The Affordable Care Act (ACA) does not make you give up your current
health insurance. It requires that most people have health insurance by
2014, if they do not already have it.
 The ACA also makes changes to make sure your insurance plan:
 Provides a minimum level of benefits,
 Limits how much you have to pay out of pocket,
 Provides you quality care.
 Whether these changes and others apply to your insurance plan depends
on whether you have a 'new' plan or a 'grandfathered' plan.
 Did you have your current health insurance when the ACA became law
on March 23, 2010?
 If yes, then you have a 'grandfathered' plan.
 If no, then you have a 'new' plan.

23. How does the ACA affect my Medicare coverage?
 The most important fact to know is the new healthcare
law will not cut your government-guaranteed benefits.
You get the same benefits Medicare has always
guaranteed whether you have a traditional Medicare plan
(Part A or B) or a Medicare Advantage plan (Part C).
These are benefits like doctor services, inpatient and
outpatient hospital care, and durable medical equipment.
 Under the Affordable Care Act (ACA), for many people
Medicare covers more costs, offers more choices and
works to improve the quality of care. Some people may
find their premiums will go up. Please contact your
insurance agent if you have any questions about your
Medicare coverage.

24. Where do you go to find coverage
in the new marketplace?
 The current avenues for acquiring coverage are:
 For individuals under 65 and small businesses, from the individual health
insurance market inside and outside the "American Health Benefit
Exchanges" ("Exchanges"),
 for persons age 65 or over or disabled, through Medicare,
 through Medicaid or CHIP for persons who meet state eligibility
requirements,
 for "full-time" employees of "Large Employers" (i.e., generally employers
with 50 or more employees) through their employer, to the extent their
employer elects to "play" under the Large Employer mandates,
 TRICARE
 Veteran’s Health Insurance Program
 Grandfathered Plans
 Other government programs
 State high risk pools
 Many individuals will be eligible for coverage under more than one of these
avenues and will be able to choose what is the best value for them.

25. Where can consumers get information about health
insurance coverage in South Carolina?
 Consumers may continue to shop for insurance in the South
Carolina insurance marketplace (private market outside the
exchange).
 Health insurance will also be available to consumers
through the federally-facilitated health insurance exchange.
(Call Center:1-800-318-2596)
 Consumers may also contact their agent for assistance in
finding coverage.
 Consumers may also contact the South Carolina
Department of Insurance for general information on
insurance coverage issues (DOI: 1-800-768-3467).
 Consumers may also contact their insurance company.

26. How do I access the Exchange?
 In South Carolina, you can contact the Exchange in
any of the following ways:
 Via the online website: www.healthcare.gov
 Via telephone: 1-800-318-2596
 TTY:1-855-889-4325
 Via Navigators:
 The Cooperative Ministry (Wanda Pearson-(803) 799-3853
 DECO Recovery Management, LLC
 Beaufort County Black Chamber of Commerce (843) 986-1102

27. Other Resources for the Exchange
 Here are some additional resources:
 www.healthcare.gov;
 1-800-318-2596; TYY: 1-855-889-4325
 How Can I Get Ready to Enroll in the Marketplace, https://
www.healthcare.gov/how-can-i-get-ready-to-enroll-in-the
marketplace/
 Kaiser Subsidy Calculator
 http://kff.org/interactive/subsidy-calculator

28. How do I know whether I qualify for premium
subsidies?
 Use the subsidy calculator on the Kaiser Family Foundation
website: http://kff.org/interactive/subsidy-calculator
 Beginning in October 2013, middle-income people under age 65, who are
not eligible for coverage through their employer, Medicaid, or Medicare,
can apply for tax credit subsidies available through state-based exchanges.
 Additionally, states have the option to expand their Medicaid programs to
cover all people making up to 138% of the federal poverty level (which is
about $33,000 for a family of four). In states that opt out of expanding
Medicaid, some people making below this amount will still be eligible for
Medicaid, some will be eligible for subsidized coverage through
Marketplaces, and others will not be eligible for subsidies.
 With this calculator, you can enter different income levels, ages, and family
sizes to get an estimate of your eligibility for subsidies and how much you
could spend on health insurance. As premiums and eligibility requirements
may vary, contact your state’s Medicaid office or exchange with enrollment
questions.

29. What are exchanges? Can I still purchase coverage
through my agent?
 Exchanges are the central mechanisms created by the health reform bill to
help individuals and small businesses purchase health insurance coverage.
 On October 1, 2013, an Exchange in every state will begin enrolling
individuals and small businesses into qualified health plans.
 The Exchange, operated by the federal government, will provide information
to consumers about their coverage options and what assistance is available to
them.
 The Exchanges will also administer the new health insurance subsidies and
facilitate enrollment in private health insurance, Medicaid, and the
Children's Health Insurance Program (CHIP).
 The federal law does not require anyone to purchase health insurance
through the Exchange, though subsidies will only be available for plans sold
through the Exchange. You will be able to purchase this coverage right on
the Exchange’s website or through your agent if he or she is approved to sell
Exchange plans.
 If you would rather buy other health insurance through an insurance agent
or broker, you will be free to do so. Coverage will also be available in the
market outside the Exchange.

30. Does the South Carolina Department of
Insurance regulate the FFE?
 No, but the South Carolina Department of
Insurance regulates the insurers and other
entities that may offer products through the FFE.
The Department approves the forms and rates
and regulates the solvency of these insurers.
 An insurer cannot offer products through the FFE
unless it is licensed by the South Carolina
Department of Insurance.
 The multi-state plan is the exception. The Office
of Personnel Management has primary regulatory
oversight over the MSPs. MSPs must be licensed.
in each of the states in which it operates.

31. Can an insurer offer the same health insurance product at a
cheaper rate outside the FFE?
 Generally, no. If an insurer is selling products
inside and outside the FFE, the rates and coverage
must be the same for the same product.
 This does not affect plans sold outside the
Exchange or grandfathered plans. Remember,
grandfathered plans do not have to comply with all
ACA requirements and this could affect the cost.
 Grandfathered plans are not subject to all of the
ACA mandates; grandfathered plans cannot be sold
or marketed through the Exchange.

32. Where do I go for help if I have a problem with
an insurer?
 Generally, you would file a complaint about the
conduct of an insurance company or agent with the
South Carolina Department of Insurance. You may
submit that complaint online at
http://www.doi.sc.gov or fax it to: (803) 737-6231
or email: Consumers@doi.sc.gov or call 1-800-
768-3467.
 Complaints about the operation of the FFE will go
to the FFE.
 Questions about Medicaid issues will go to
SCDHHS.

33. Do we know what products will be offered in
the South Carolina Health Insurance Market?
 The Department completed its review of products that will
be offered through the FFE. The review of those products
had a July 31st deadline. CMS will make information
about the products and rates available around October 1,
2013.
 The Department is in the process of reviewing products
that will be offered in the market outside the exchange.
 The Department has received a number of filings to
market products outside the Exchange. These filings
continue to come in.

34. What is the name the FFE?
 The official name of the FFE is
 the Health Insurance Marketplace for individuals and families
and
 The Small Business Health Options Program (SHOP) for small
businesses.
 Both are federally operated.
 Contact Information:
www.healthcaremarketplace.gov/marketplace
 1-800-318-2596

35. What types of plans will be available through the
FFE?
Health plans sold through the FFE will be required to meet comprehensive standards for
items and services that must be covered. To help consumers compare costs, plans available
through the FFE will be organized in four tiers, or four levels of generosity of the cost-
sharing that each plan includes:
 Bronze level –The plan must cover 60% of expected costs across a standard population.
This is the lowest level of coverage.
 Silver level – The plan must cover 70% of expected costs across a standard population.
 Gold level –The plan must cover 80% of expected costs across a standard population.
 Platinum level – The plan must cover 90% of expected costs across a standard
population. This is the highest level of coverage.
 Also, a catastrophic plan will be offered, and will cover the same services. But, its
coverage will be slightly less generous than the Bronze level plans. A catastrophic plan
may be a less expensive option for those who are eligible: only young adults
under 30 and individuals who have a hardship exemption from the individual
mandate are allowed to purchase catastrophic plans. Premium tax credits
and cost-sharing reductions are not available for catastrophic plans.
 Stand-alone dental plans are available through the FFE. These plans can also be certified
by the feds as providing the pediatric dental EHBs for sale outside the Exchange.
 We anticipate having stand-alone dental products available in the market outside the
Exchange.

36. What insurance companies will offer coverage through the
FFE?
 The FFE website will include a list of the plans available
for sale on or after October 1, 2013.
 Four companies applied to offer Qualified Health Plans
(QHPs) in South Carolina. They have not yet been
approved by HHS/CMS.
 HHS/CMS will let them know whether their
applications to be a QHP has been approved during the
first week of September.

37. This all sounds so complicated… who will help
consumers navigate the new system?
 Navigators
 State Assisters
 Application Assisters (Counselors)
 Primarily in hospitals and clinics
 Volunteers with training and certification
 Agents and Brokers
 Listed on the Exchange
 Commissions Paid by Insurers
 Appointment Issues

38. I hear there is going to be a Co-op plan in SC.
What is a CO-Op Plan?
 Federal government will foster the creation of qualified
nonprofit insurers
 Loans for start-up costs
 Grants to help meet solvency requirements
 Unobligated funds cut off in fiscal cliff deal
 CO-OP loans granted to plans in: IL, AZ, CO, CT, IA, NE, KY, LA,
ME, MD, MA, MI, MT, NV, NJ, NM, NY, OH, OR, SC, TN, UT, VT,
WI
 Must be governed by majority vote of members
 Profits must be used to reduce premiums, increase benefits,
or improve quality of care
 Must be licensed by state and follow state insurance laws
 Consumers’ Choice Health Plan is the name of the CO-OP in
South Carolina.

39. What is a multi-state plan? Does South
Carolina have one?
U.S. Office of Personnel Management (OPM) contracts with
insurers to offer at least 2 plans in each state (at least one
a non-profit)
 Contracting process similar to the Federal Employees
Health Benefit Plan (FEHBP)
 Insurers must be licensed in every state in which they
operate
 Must be in at least 60% of states in first year; 70% of
states in second year; 85% of states in third year; and
all states in fourth year
 Not required to cover entire state unless required by
state
 Plans must comply with state rules and regulations, if they
exist.
 Multi-state Plans are not approved to sell on the FFE by
the DOI, but it is anticipated that there may be a multi-
state plan operating in SC.

40. Thank You
Information from the following websites was used to
develop this presentation:
http://www.healthcare.gov
http://www.dol.gov
http://www. sba.gov
http://reform.healthfoundation.org
http:www.aarp.org