The latest word on the Health Insurance Exchange – employer notification
December 11, 2012
By Scott Lyon, Senior Vice President
Status: The Michigan Legislature failed in its effort to establish a State-Based Exchange for Michigan, leaving just two options:
- State Federal Partnership Exchange
- Federally Facilitated Exchange
Gov. Snyder has now pointed his staff toward the State Federal Partnership Exchange (the lesser of the two remaining evils?) and on November 16, 2012 the governor filed paperwork with the Department of Health and Human Services (HHS) to signal his intention to establish a State Partnership Exchange. Just what that means for Michigan’s small business community is still unclear. What is not unclear is that Michigan will have far less control over the decisions made.
According to HHS, health insurance carriers that place their plan on the Exchange will pay a fee of 3.5 percent of premium. There will also be two federally endorsed plans (under the law, in every state, two plans must be multi-state plans managed by the federal Office of Personnel Management) on the Exchange.
Going forward, it is estimated that the staff at HHS will make in the vicinity of 85 percent of all decisions. These include decisions about the information technology infrastructure, connectivity to state information systems, website design, plan management, customer service and navigators. Michigan clearly does not control its own destiny when it comes to its insurance market.
That said, here are a few things to be mindful with regard to the Exchange of as we head into 2013:
Reminder: Remember how – or maybe why – we got here. The Affordable Care Act requires that each state establish a health insurance exchange for individuals and small businesses by 2014, or the federal government will establish one for them. For 2014 and 2015, states can decide whether to include businesses with 100 or fewer or 50 or fewer employees in their exchange. In 2016, all businesses with 100 or fewer employees must be able to purchase insurance through these exchanges. The exchanges have the option of including employers with more than 100 employees beginning in 2017.
Ready, Set, …Go? The Exchange is expected to be ready for open enrollment in October 2013 for coverage years beginning January1, 2014. For whatever it is worth, my bet is that the Individual Exchange is ready to go for October 2013, but the Small Business Health Options Exchange is delayed. Stay tuned.
March 2013 – Employer Notification to Employees: Among the key changes in health care reform is an employee’s choice, if eligible, to choose a plan from a state-run exchange. Starting March 1, 2013, all employees and new hires must be informed of the new exchanges. You must provide notice in writing to your employees with information about the exchanges and an employee’s ability to shop for coverage on the Exchange. The notice must also include eligibility rules for premium credits and the differences between an exchange plan and an employer-sponsored plan. We are currently waiting on additional guidance form HHS on this notice.
You can count on SBAM to provide the latest information on the Exchange. The Health Care Reform section of our website will continue to be updated with information as it becomes available.