By Daniel P. O’Brien
The Affordable Care Act (aka Obamacare) requires all eligible individuals to have health insurance coverage containing federally mandated Minimum Essential Benefits, beginning Jan. 1. To assist with implementing this mandate, starting Oct. 1, individuals and employers will be able to go online, call or visit a yet to be implemented federal “Marketplace” or “ Exchange” and learn from yet-to-be-hired “Navigators” about a tier of four new health insurance plans available beginning Jan. 1.
The Marketplace or Exchange will operate in each state with Navigators helping persons learn if they are eligible for full or partial premium or cost sharing subsidy for the insurance plans.
Amount of the financial assistance is based upon family size and income, and reduce as household income increases to a maximum of 400% of the Federal Poverty Level (FPL). Qualifying 2013 income ranges are up to $45,960 for single and $94,200 for a household of four, increasing upward for larger households. Employees offered coverage through an employer are not eligible for a subsidy unless the employer plan is not “affordable”, i.e. exceeds 9.5% of income or the plan has an actuarial value of less than 60%.
The four federally approved plan tiers contain Minimum Essential Coverage criteria and are based upon their “actuarial value” (AV) or amount the insurance plan is responsible.
The balance is the individual’s personal responsibility through deductibles, co-pays and out-of-pocket expenses.
The federal minimum standard plan tiers are: Bronze (60% AV), Silver (70% AV), Gold (80% AV) and Platinum (90% AV). The lower percentage equals lower premium but potentially higher overall out of pocket expense for the insured.
Navigators can explain the differences between the plan tiers but are not allowed to recommend a particular insurance company or a particular insurance agent from which the consumer must purchase an insurance plan. A list of licensed qualified health insurance agents and companies will be offered to the consumer by the Navigator.
To be qualified, a licensed health insurance agent must have successfully completed a new four-hour continuing education course about the Affordable Care Act.
Insurance plans offered by each insurance company must meet the actuarial value minimum standards for each plan they offer, but any extra included benefits and plan premium cost will vary by plan and company. Plans may be offered through the public exchange or through private exchanges run by insurance companies or agencies, but subsidy assistance is available only through purchase on the public exchanges.
There is no premium difference for similar plans offered on either public or private exchanges. Commissions will be paid by the insurance company to agents completing applications through either public or private exchanges.
Exchanges will pay no compensation to agents.
Individual Navigators will be hired by Indiana Navigator Organizations which will oversee their activities. The Navigators are to gather residency status, income and family size information from individuals applying for financial assistance in paying for the health insurance. This information will then be reviewed by the IRS and Homeland Security to verify eligibility. The result will be given to the Exchange which will notify the individual of any subsidy eligibility.
The individual may then contact Medicaid, a licensed insurance agent or insurance company to discuss and apply for available insurance plans, covering already existing as well as all future medically necessary treatments.
Daniel P. O’Brien is an official with the Indianapolis Association of Life Underwriters.