Five Functions the exchanges offer: 

1. Consumer assistance – Staff will manage the exchange website and call centers.  “Navigators” will help consumers use the exchanges.  These are not licensed agents or brokers. 
2. Plan management – Consumers will be able to choose QFP’s sold on exchanges and see important date for QHP.
3. Eligibility – Applicant information is collected and verified to determine eligibility for enrollment, tax credits or subsidies. 
4. Enrollment – Staff (not licensed agents or brokers) will help consumers enroll and send information to health plans as well as transmit information related to premium tax credits and cost-sharing reductions as required by HHS. (Health and Human Services)

Financial Management – Exchanges will perform several financial functions including handling user fees, risk adjustment, reinsurance and risk corridor programs (this program runs from 2014 – 2016 and give HHS governance over refunds and charges for QHP’s that go over or under projected costs).

Qualified Health Plan (QHP) requirements –

All plans must follow new coverage and benefit rules starting in 2014.  The requirements are based on:

1. If the plan is offered on or off the exchange.
2. If the plan is fully insured or self-insured.
3. The size of the Employer Group 

Premiums for the individual and small group plans will not be based on health status.  Instead, they will be based on family tier, age, geography and tobacco use.  (State-specific rules may vary when a federally run model is not in place.) These plans also must use “3 to 1” age bands.  This means the highest premium cannot be more than three times the lowest premium for the same plan.  All of these requirements may have an impact on rates, although the specific effects are difficult to define at this time as qualified health plans continue to be developed.

The plans in the Exchange will be offered in a tiered format.  The tiers are named after metals:

• Platinum – 90% coverage 
• Gold – 80% coverage 
• Silver – 70% coverage 
• Bronze – 60% coverage 

Each tier will have several plans to choose from and will include essential health benefits.  Bronze plans will have the lowest monthly premium, but cost shares will be more when health care services are provided.  Platinum plans will have the highest monthly premium, but cost shares will be less. 

All plans must include “essential health benefits” as defined by the health care reform law.  Specifically, the plans must include items and services from at lease these 10 categories of care:

            Ambulatory patient services

            Emergency Services

            Hospitalization

            Maternity and newborn care

            Mental health and substance use disorder services, including behavioral health treatment

            Prescription drugs

            Rehabilitative and habilitative services and devices

            Laboratory services

            Preventive and wellness services and chronic disease management

            Pediatric services, including oral and vision care

As part of the Affordable Care Act (ACA or health care reform law), starting in 2014 ALL Americans much have a minimum amount of health insurance or be taxed by the government.  The law also requires each state to have a health insurance exchange where people can buy health insurance coverage.  People who do not get health insurance at work, or can not afford it, may be able to get it through an exchange.  The exchanges do not replace buying health insurance privately.  They are simply a new place to shop and buy.  

Three exchange model options–

Exchanges can be set up in one of three ways.  Each state determines how its exchange will be set up:

1 – State-run facilitator model – Any carrier meeting minimum federal and state requirements set for the health insurance exchanges can be in this exchange.  Carriers compete in an open market.

2 – State-run active purchaser model – The state solicits bids from health insurance companies and determines which plans it will offer.  The state directly negotiates the price and benefits offered.

3 – Federally run model – The U.S. Department of Health and Human Services (HHS) runs the exchange in states that choose not to create one.

Tax Deductible Contributions –

Health Savings Accounts allow you to legally avoid federal income tax by saving up to $ 3,250 for singles or $ 6,450 for families, into an HSA account.  If your employer makes an HSA contribution for you, it is \”excluded\” from income, and not subject to any income tax or FICA.  An important note – You must have your HSA-qualified health insurance in place by December 1st in order to qualify for a 2013 tax break.

A Health Savings Account is a tax savings account combined with a qualifying Health Insurance Plan.  By allowing you to deposit tax-deductible funds into a savings account that you can use to cover medical costs.  Health Savings Accounts enable you to take control of your own health care decisions.

You must first have a \”high-deductible health insurance plan\” which qualifies to be partnered with an HSA.  These plans are available through various insurance companies, depnding where you live.  HSA plans have annual deductibles that are at least $1,250 for individual coverage or at least $ 2,500 for family coverage.  Your annual out-of-pocket expenses which include deductibles and co-payments are capped at $ 6,250.00 for individuals or $ 12,500 for families.  Once your insurance policy has become effective, you may fund your HSA account.

The Terrorism Risk Insurance Act (TRIA), was established in 2002 and by all accounts it continues to do what it was intended to do and that is provide stability and create a viable insurance market.  The future of TRIPRA is uncertain and there is a real possibility it will not be reauthorized and will end entirely or be significantly altered.  The battle lines are being brawn with Congressional hearing and related lobbying are already underway.  If TRIPRA is not extended past the end of 2014, the impact will be huge.  A failure to reauthorize will affect virtually every property owner or business that chooses or is required to carry terrorism coverage.  The time is now to be proactive and meet with your insurance broker who can help identify and analyze risks and exposures.  Property and business owners may want to secure capacity by locking in long term stand-alone coverage.

Employee contributions for FSAs will be capped at $2,500 annually, with the cap adjusted annually to the Consumer Price Index.

Effective January 1, 2013, Employers will need to start telling employees about exchanges and premium subsidies.

Many people choose to include scheduled jewelry on their homeowner\’s insurance policy as a convenient way to cover their jewelry.  This is a convenient way however; it may not be the best way.  Here are some good reasons not to include jewelry.  Losses related to jewelry are high and according to the Department of Justice statistics, 70% of all personal property (contents) theft losses are jewelry.  Insurance companies pay out billions of dollars in jewelry losses each year.   If a jewelry claim is on a homeowner\’s policy, the impact of the claim can be serious.   Jewelry is a magnet for theft and is also prone to \”mysterious disappearance\”.  If that lost or stolen jewelry is on a homeowner\’s loss it can have a serious consequences for the homeowner sometimes resulting in a policy receiving a non-renewal notice  in a worse case scenario.  Another drawback to putting jewelry on the homeowners policy is the the insurance companies usually have restrictions and imitation for jewelry. 

A stand-alone jewelry policy called a personal articles floater addresses the jewelry need without impacting the homeowners policy.  Also keep in mind the stand-alone policy may offer higher limits than the homeowners policy.