Brought to you by Brennan Purdy, State Farm Agent
Last Tuesday, the Bethel Chamber of Commerce held a presentation on something business owners and employees alike are wondering about – the Affordable Care Act (ACA). The presentation, given by Jason Madrak, Chief Marketing Officer of the Connecticut Health Insurance Exchange, was held at the Bethel Municipal Center as a part of the Chamber’s monthly Coffee Talk networking event.
Dan Carter, the State Representative for Bethel, Danbury, Newtown, and Redding, introduced Madrak, who navigated the structure of the revised health care system and answered the many questions of the business owners who attended the talk. The Exchange has been busy building the state’s new system since its inception in June of 2011, but Madrak said that a few key policy points are still being worked out, such as the prices of new plans and the percentage of eligible employees required to enable business owners to purchase a company plan.
Madrak began by saying that a series of “Healthy Chats”, public presentations by the Exchange similar to the one he was about to give, would be held at various venues throughout the state in the coming weeks. Since Madrak’s presentation, the next leg of the “Healthy Chats” tour has been scheduled, and one will be held nearby at Western Connecticut State University in Danbury on March 14, in the Student Center Theater on the Midtown campus, located at 181 White Street.
The new health care care system will be organized by price and coverage in a “medal tier” system. Basic coverage will comprise a bronze plan, a silver plan will offer more coverage at a higher price, and so on, all the way up to platinum plans. Each medaled plan, which will be offered by private companies such as Aetna and Anthem as prior to the ACA, will offer the same coverage at the same price whether it is sold in or out of the Exchange, and the state will be deciding what standard coverages, or “essential health benefits”, are required for each medaled plan. Health insurance companies will be required to offer their plans both in and out of the Exchange in order to sell their policies within the state.
It’s inevitable that the price of health insurance go up – Madrak said that the ACA will likely diminish the availability of low coverage/high deductible plans, and a one to two percent fee attached to each policy will go towards funding the Exchange. However, eligibility for Medicaid will be expanded, and a series of tax credits – some of which will be applied immediately to the cost of a health insurance plan – will be available to those who make up to 400% of the federal poverty line ($96,000 for a family of four, $42,000 for an individual).
Those who receive Medicaid are currently required to have an income that is 100% of the federal poverty line – $23,050 for a family of four, $11,170 for an individual – which will be bumped up to 138% – $31,809 and $15,415, respectively.
Madrak also explained that caps on insurance premiums will prevent policies from becoming too expensive; for example, for a person making 400% of the federal poverty line, a premium can not exceed 9% of their income, and for a person making 200%, their premium can not exceed 5% of their income.
Small businesses that have 50 full-time employees will be required to offer insurance through their company come 2014. Madrak said that within a few years, the fine for not offering insurance will be about $2,000 per employee, and for individuals without a policy, the fine will go up from $96 to seven percent of one’s modified gross income in three years. However, Madrak said that small businesses must have a full-time equivalent of 50 persons – so say a business has 50 employees and 10 work part-time, the business would not be required to offer health insurance, but if a business had 30 full-time employees and 30 part-time employees and their collective hours added up to the equivalent of 50 full-time workers, that business would be required to offer insurance through the company.
Regardless of the size of the business, the ACA is designed to incentivize businesses into offering their employees a health insurance policy – currently, businesses are able to receive a tax credit for any portion of a health insurance policy that the company pays for, and come 2014, businesses will be eligible for an additional tax credit of up to 50% of what they paid for their employee’s policies. Madrak did mention that it could be more cost effective for an employee to turn down a company plan and purchase an individual plan due to the tax credits individuals are able to receive relative to their income.
Madrak said that five companies are currently committed to selling insurance in Connecticut: Aetna, Anthem, Connecticare, United Health, and Healthy CT, a non-profit co-op company. Other companies and non-profits are also applying to sell in the state. While these plans will be standardized, Madrak said that people will likely be able to purchase additional health insurance products a la carte. The rates of these new plans will probably be unveiled in August of this year, but one thing is for sure: geography and age are the only factors that will determine those rates. The ACA promises the end of gender rating and discrimination against those with preexisting conditions.
There was concern among Chamber members about doctor shortages and whether or not a doctor would even accept insurance. Madrak said that it would be unlikely to find a doctor who is not covered by a carrier and that Connecticut residents can expect to see innovation in the health care industry – more “minute clinics”, mobile clinics, and a greater use of physicians assistants.
The Connecticut Health Insurance Exchange is scheduled to open in October of 2013. Visit the Exchange’s website at ct.gov/hix/site/default.asp for more information and for the next series of “Healthy Chats”.