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h ea l t h i n s uranc e e xchang e s
18
MAR / APR 2013
I
Healthcare Journal of NEW ORLEANS
and confusing, it’s for good reason. Every
employer, large or small will have to deter-
mine whether or not they are an ALE and
some are going to be surprised. Rather
than a simple determination based on
numbers of employees, the ALE definition
specifies 50 full time equivalents of labor
and uses a broad, common law definition
of “employee” that could include contract
workers, work release prisoners, interns,
etc. While an employer may not have to
offer insurance to all of these folks, their
labor contributes to the hours count that
determines whether the company is an
ALE and therefore required to offer cover-
age to 95% of its employees.
A “bona fide offer” is a health plan that
meets federal affordability testing and has
at least 60% actuarial value. While the
fines for not offering coverage may not
seem that onerous, most large employers
are unlikely to both stop offering insur-
ance as one of the employee benefits that
helps them remain competitive and pay a
penalty to do so.
There may be an issue, however, with
small companies opting not to offer health-
care coverage since they are not required
to do so. In those situations their employ-
ees can shop the exchanges. For many of
these employees (those under 400% of
the FPL) subsidies will be available to help
them pay their premiums. Others may find
they qualify for Medicaid—something that
can also be determined by the exchange.
Those that are Medicaid or LaCHIP eligible
may also shop on the exchange for differ-
ent coverage, but will not receive tax cred-
its or cost-sharing reductions, making that
an unlikely occurrence. Small employers
themselves can shop for health plans on the
exchange provided they are not ALEs, but
no advance tax credits or subsidies would
be available to them or to their employees.
What does thismean
for insurers?
“The rules have changed in a rather incre-
mental fashion over the years,” said Ber-
taut. “But when PPACA passed, we went
from increments to changing the game
pretty drastically and quickly. The federal
government is regulating a lot of areas they
never touched before.”
Because of the major reforms to the way
insurers do business, Bertaut believes that
most large insurers will have no choice
but to participate in the exchanges. If they
are forced to increase their risk by accept-
ing members with pre-existing conditions,
then they certainly want to be in a position
to tap into the large pool of newly insured
predicted by the federal government. The
only problem is knowing who will come,
how many, and what will motivate them
to choose one plan over another. “Nobody
really knows, other than price, what’s going
to motivate people to shop on this thing,”
said Bertaut. “Will they buy a plan simply
because of the price, the coverage, because
they’ve heard of the insurer?” Meyer
believes that most consumers tend to be
motivated by cost over quality, so keeping
premiums competitive may be the biggest
challenge.
That challenge is exacerbated by PPACA’s
requirement that every plan offered in any
exchange supply several “minimum essen-
tial benefits” that include such things as
hospitalization, labor and delivery, pediat-
rics, labs, etc. In fact, these minimum ben-
efits make for a fairly rich insurance plan,
Top Ten
PPACA mandates that health plans offered by exchanges offer minimum
essential benefits although specific details of these rather broad
categories have yet to be determined:
• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorders
• Prescriptions
• Rehabilitation
• Labs
• Preventive care and chronic disease management
• Pediatrics
States may use an existing small group, state employee, federal employee
or HMO plan as a benchmark model to decide specific coverage details.