Impacts of the Affordable Care Act

Patient Protection and
Affordable Care Act (ACA)
Impacts of Health Care Reform
September 2013

3
The Affordable Care Act (ACA)
• Signed into law March 23, 2010
• Two decisions issued by Supreme Court on June 28, 2012:
• ACA constitutional – Congress can impose a tax on those without coverage
• Medicaid expansion criteria unconstitutional – states may opt out of expansion
• Most significant health care legislation since the passage of the Social
Security Act of 1965 to establish the Medicare and Medicaid programs
• Impacts consumers, providers, and insurers by dictating:
• Who must buy insurance
• How insurance will be sold
• What health benefits are mandatory
• Regulations are being issued by:
• Health and Human Services (HHS)
• Department of Labor (DOL)
• Department of the Treasury (IRS)
This information is for illustrative purposes only and is being provided to help increase understanding of the impacts of some of the provisions of the
Affordable Care Act (ACA). This document does not attempt to cover all of the law’s provisions and should not be used as legal advice for implementation
activities. We encourage clients to seek professional advice including legal counsel, regarding how the new requirements may affect their specific plan.

4
Medicaid Expansion in Florida
• The ACA expanded Medicaid eligibility criteria to cover all individuals earning
up to 138% (about $16,000) of the Federal Poverty Level (FPL).
• Medicaid would provide coverage for individuals at 0 – 138% FPL, while the
Marketplace would provide subsidies for individuals at 138 – 400% FPL.
• The Supreme Court determined that the parameters of the Medicaid
expansion – requiring expansion of program eligibility criteria in order to
maintain current funding – were unconstitutional. As a result, states are
allowed to opt out of Medicaid expansion without losing existing funding.
• In February 2013, Governor Scott announced that he would support Medicaid
expansion for 2014-2016. However, the Florida Legislature did not expand
the state’s Medicaid eligibility criteria during the 2013 session.
• This lack of Medicaid expansion means:
• Individuals under 100% FPL who do not meet existing Florida Medicaid
eligibility criteria are not eligible for Medicaid or Marketplace subsidies
• Individuals from 100 – 138% FPL will qualify for Marketplace subsidies

6
Changes to Health Plans
Small Group and Large Group Only
For individual and small group coverage that begins on or after January 1, 2014:
• No preexisting condition limitations – medical history can no longer be used to
determine eligibility for coverage or related premiums
• Guarantee issue – everyone who applies for health coverage must be
accepted
• Guarantee renewability – enrollees will be able to renew their plan except in
cases of fraud or non-payment of premiums
• Essential Health Benefits (EHBs) – a series of services that must be covered
by all plans with no lifetime maximums or annual limits
• Out of pocket maximum limits – established at $6,350 for single plans,
$12,700 for family plans
• “Metal” level plans – categories of health plans (Platinum, Gold, Silver,
Bronze) that cover the same EHBs at different cost-sharing levels
• Premium tax credits – available based on household income to assist with
purchasing health coverage

7Essential Health Benefits (EHBs)
Individual and Small Group Coverage
• For plan years starting January 1, 2014, all non-grandfathered individual and
small group health plans must cover these benefits with no annual or lifetime
limits.
• All state Medicaid plans must also cover these services.
1. Ambulatory patient
services
2. Emergency services
3. Hospitalization
4. Maternity and newborn
care
5. Mental health and
substance use disorder
services, including
behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative
services and devices
8. Laboratory services
9. Preventive and wellness
services and chronic disease
management
10.Pediatric services, including
oral and vision care

8
Metal Level Benefit Plans
Four Metal Level categories of health plans will be available:
• Each metal plan covers the same set of Essential Health Benefits
• A plan’s Metal Level is based on what a plan will pay, on average, for covered
services
• Metal levels are based on differences in cost-sharing and out-of-pocket costs for
covered services
Platinum Gold Silver Bronze
Higher Premium Lower Premium

9
Changes to Rating Rules
As of January 2014, new rating rules take effect for non-grandfathered individual
and small group plans:
• No pre-existing condition exclusions
• No medical history or gender used in rating
• Rating factors used to determine premiums limited to:
– Ages of each individual applying for coverage
– Single rate factor for ages 0 – 20
– Rates for adults 21 – 63 increase based on age and cannot exceed 3:1
ratio
– Single rate factor for ages 64+
– Geography where the subscriber lives (individual), group is located (small
group)
– Tobacco use (rates may be up to 50 percent higher for tobacco users)
• Rates for families will be the sum of the rate for each person to be covered,
with a cap of 3 children ages 0 – 20

10
ACA Fees and Taxes
This information is for illustrative purposes only and is being provided to help increase understanding of the impacts of some of the provisions of the Affordable Care Act (ACA). This document does not attempt to cover all of the law’s provisions and should not be used as legal advice for implementation activities. We
encourage clients to seek professional advice including legal counsel, regarding how the new requirements may affect their specific plan.
Name What Who Pays How Much When
Patient Centered
Outcomes
Research Institute
(PCORI) Fee
Pursues comparative clinical effectiveness
research and other initiatives to improve
quality and lower costs. Funded with annual
fees (per covered life) each plan or policy year.
Florida Blue pays fee for
individuals and insured
groups.
ASO group employers pay
fee directly to IRS.
$1 per covered life, up
to $2 plus.
2012 – 2019
Transitional
Reinsurance Fee
Funds the Transitional Reinsurance Program.
Distributed to insurers in non-grandfathered
individual market that attracts high-risk
individuals.
Health plan pays fee.
ASO group employers pay
fee.
$5.25 PMPM for 2014.
Later years TBD.
2014 – 2016
Health Insurer
Fee
Annual fee funds premium tax credits or
subsidies for low-income individuals and
families purchasing insurance through the
exchange marketplace in 2014.
Health insurer pays fee, but
may be included in
premiums.
TBD 2014 and
ongoing
Exchange User
Fee
Assessed to insurers offering health plans on
Exchange to cover related operational and
administrative costs.
Health insurer pays fee, but
may be included in
premiums.
3.5% of monthly
premium for QHPs
enrolled through
exchange.
2014 and
ongoing
High Value Plan
Tax
“Cadillac Tax” fee assessed on high premium
health plans.
Health plan pays fee, but
may be included in
premium. ASO group
employers pay fee.
40% of value of plan
benefits that exceed
thresholds. Details
TBD.
2018 and
beyond

Health Insurance Marketplace
(Exchange)

12
Health Insurance Marketplace for Individuals
• Allows individual consumers to determine eligibility for financial assistance and/or public health
programs, and provide information and support for them to evaluate and enroll in health plans
• For January 1, 2014 effective dates, open enrollment is from 10/1/13 – 12/15/13
• Open enrollment continues 12/16/13 through 3/31/14 for February – May 2014 effective dates
Note: Financial assistance available to applicants with incomes 100-400% of Federal Poverty Level (FPL) to help them purchase insurance in the Marketplace.
• Consumer provides
demographic, income,
dependent information
• Marketplace supports
online, mail, phone, or in
person applications
• Application routed to HHS “data
hub” to validate income,
citizenship status
• Marketplace provides eligibility
results and amount of premium
tax credit available*
• Online tools and in-person
support available to perform
plan comparison
• Enrollment and tax credit
information sent to issuer of
selected QHP
Consumer
completes
Marketplace
application
Marketplace
makes
eligibility
determination
Consumer
enrolls in
Qualified Health
Plan (QHP)

13
Advance Premium Tax Credits (Subsidies)
• Household’s expected income for the coverage year is between 100% and 400% of the
Federal Poverty Level (FPL):
• Individual must enroll in individual coverage through the Marketplace
• Individuals cannot enroll in another form of Minimum Essential Coverage, such as
Medicaid, Medicare, Tricare, or employer-sponsored coverage
• If married, the applicant must file a joint tax return
• Subsidies are paid directly to the insurance company each month to offset premium
costs for the health plan selected by the applicant. The insurance company will send a
monthly bill to the enrollee for any premium balance due.
2013 FPL 100% 200% 300% 400%
Single $11,490 $22,980 $34,470 $45,960
Family of 4 $23,550 $47,100 $70,650 $94,200
Updated 5/29/13

14
Individual Mandate and Penalties
• The ACA imposes tax penalties on individuals and dependents who do not maintain minimum
essential coverage beginning January 1, 2014
• The tax applies each month an individual and their dependents do not have qualifying coverage
(exceptions exist for those who have incomes below tax filing levels or other financial hardship)
• The sum of monthly penalties is the annual penalty and is the greater of:
• It is important to note that the tax penalty for most people is likely to be 1% of their taxable income –
NOT the $95 flat dollar amount
Tax Amount 2014 2015 2016
$95
$325
$695
1%
2%
2.5%
Flat dollar amount
(total capped at 300% of the per
person adult amount)
% of taxable
household income

16
Small Business Health Options Program (SHOP)
• Allows small employers with up to 50 full-time employees* to purchase health insurance coverage for
employees and obtain support for administrative functions related to billing and payment tasks.
• Employers with business locations in multiple states will apply for the SHOP in each state they
operate. Employees will enroll in coverage based on the state of their worksite location.
*States can continue to use their definitions for the number of employees in a small group (50) until 2016. As of January 1, 2016, small groups will be defined as up to 100 full-
time employees.
• Employer provides group
and employee data,
selects metal tier and
contribution amount
• SHOP supports online,
mail, phone, or in person
applications
• Online tools and in-person
support available to perform
plan comparison
• Starting in 2015,Employee
may select any QHP available
at employer-sponsored
coverage tier
• Starting in 2015, SHOP
aggregates premiums owed by
employer and sends single
bill**
• Starting in 2015, SHOP
collects payments from
employer and makes payment
to insurers
Employer
completes
SHOP
application
Employee
reviews and
enrolls in
SHOP QHP
SHOP performs
administrative
functions starting
in 2015

17
SHOP Functions
Provide “employer choice” enrollment model
where employer selects a single health plan
to offer all employees
Develop and offer premium calculator for
employees to compare QHPs after
application of any employer contribution
Enforce 70% participation rule based on rate
of employee participation in SHOP, not plan
or issuer enrollment
Require insurers to modify rates at uniform
time and prohibit changes to employer rates
Provide “employee choice” enrollment
model where employer selects metal level
of coverage to offer all employees;
employees select any plan at that metal
level
Aggregate premiums and provide monthly
bill to employers that reflects total amount
due insurers
Receive payments from employers and
transfer payments to insurers
Reconcile enrollment and employer
participation information with insurers on a
monthly basis during their plan year
2014 2015

18
Small Business Tax Credits
available to employers with 10 or fewer employees and average annual wages of
less than $25,000; phases out as firm size and average wages increase.
Full Credit-
For tax years 2010-2013: For tax years 2014-2015:
• Tax credit available for any employer-sponsored
health insurance
• Maximum credit 35% for small business employers
• Maximum credit 25% for small tax-exempt
employers (e.g., charities)
• Tax credit only available for employer-sponsored
health insurance in SHOP
• Maximum credit 50% for small business employers
• Maximum credit 35% for small tax-exempt
employers
Eligibility Requirements
less than
$50,000
Average annual wages
for full-time equivalent
employees must be
InsurancePremiums
Employer must contribute at least 50% of the cost toward
each employee’s single health insurance
Employer must have
less than 25 employees
%100
%50
Employee ContributionsEmployer Contributions
$100K
$50K

Employer Impacts
NOTE:
Employer Penalties delayed until 2015

This information is for illustrative purposes only and is being provided to help increase understanding of the impacts of some of the provisions of the Affordable Care Act (ACA). This document does not
attempt to cover all of the law’s provisions and should not be used as legal advice for implementation activities. We encourage clients to seek professional advice including legal counsel, regarding how
the new requirements may affect their specific plan.
20
Employer Notice to Employees about Marketplaces
• Employers must provide all employees a notice that explains the availability
of coverage through the Marketplace and that an offer of employer coverage
affects the ability of employees to get coverage through the Marketplace.
• Employers will be required to provide the notice to each new employee at
the time of hiring beginning October 1, 2013. The notice must be provided
within 14 days of an employee’s start date.
• For current employees, employers must provide the notice by October 1,
2013. The notice is required to be provided at no cost to the employee.
• The notice must be provided in writing in language that can be understood
by the average employee. The notice may be provided by first-class mail,
or electronically if the DOL electronic disclosure requirements are met.
• DOL guidance: http://www.dol.gov/ebsa/pdf/tr13-02.pdf
• Sample notice for employers who offer health coverage:
http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
• On September 11, the DOL released guidance that indicated employers
would not be penalized for failing to provide notices by October 1.

This information is for illustrative purposes only and is being provided to help increase understanding of the impacts of some of the provisions of the Affordable Care Act (ACA). This document does not
attempt to cover all of the law’s provisions and should not be used as legal advice for implementation activities. We encourage clients to seek professional advice including legal counsel, regarding how
the new requirements may affect their specific plan.
21
90 Day Waiting Period
• For plan years starting in 2014, group employers cannot have a waiting
period that exceeds 90 days (coverage must be effective no later than 91st
day)
• The 90 day maximum waiting period applies to:
– Large and Small Group Employers
– Insured and Self-Insured
– Grandfathered and Non-Grandfathered
– All employees eligible for coverage
• The 90 day waiting period starts on the date an employee is eligible for
coverage, typically their date of hire
• For employees in a waiting period at the plan renewal date, if the employee
has already waited 90 days they are immediately eligible to enroll in coverage
(the employee gets credit for “time served”)

22Counting of Employees to Determine Group Size
Note: Businesses controlled by a single owner must be treated as a single entity for purposes of
counting employees and group employer size determination for applicability of employer penalties
Florida Statute
627.6699(3)(w)(1)
[Formerly (3)(v)]
As modified by FL SB 1842
Florida Statute 627.6699(3)(w)(2)
Adopting:
Affordable Care Act (ACA) 1304(b)
Internal Revenue Code (IRC)
4980H
[ACA Sec. 1513]
Rule for counting
employees
Average number of “Eligible”
employees employed on
business days during the
preceding calendar year
Average of total number of all
employees (e.g., W-2) employed on
business days during preceding
calendar year
Annual average of total full-time
employees and full-time
equivalents (total hours worked
by non-full-time staff divided by
120)
Includes part-time and
seasonal employees
No Yes (each EE = 1) Yes (as equivalents/fractions)
“Small Group”
≤50 eligible employees ≤50 total employees
(Florida will adopt 1-100 SG in 2016)
≤49 FTEs
Who must be offered
coverage?
“Eligible” full-time employees
(work 25+ hours per week and
has met waiting period rules)
[Can Include Independent
Contractors]
FL: “Eligible” full-time employees
(work 25+ hours per week and has
met waiting period rules)
[Can Include Independent
Contractors]
Full-time Employees (average
30 hours/week)
Rule used for:
• Market Segment
Determination for
Grandfathered Plans
• Market Segment
Determination for Non-
Grandfathered Plans
• Apply PHSA Market Reforms
• Apply MLR standards
• Determine SHOP eligibility
• Determine Small Group
Tax Credit Eligibility
• Apply Employer “Pay or
Play” Penalties

23How many hours do my employees work?
Number of
Full-Time
Equivalent (FTE)
Employees
Number of Full Time
Employees working 30 or
more hours per week
Aggregate number of hours of service for
all employees who were not employed an
average of at least 30 hours per week for
the month, divided by 120
Total Number of Full Time
Equivalent Employees (FTEs)
+
=
Updated 7/15/13
This calculation is done for each month, the monthly totals combined, and then divided
by the number of months counted. If the result is 50 or more, the employer must offer
health coverage to all full-time employees and their dependents under age 26.

24
Measurement 4Measurement 3Measurement 2Measurement 1
Stability 2Stability 1
JANJAN JANJAN JAN
Admin 1
Stability 3
Admin 2 Admin 3
OCTOCTOCTOCT
What timeframe do I use to count employee hours?
• Measurement period – timeframe for counting employee hours
• Administrative period – identify full-time employees
• Stability period – offer full-time employees health coverage

25
How is Affordability and Minimum Value calculated?
Affordability: Employee contribution cannot
exceed 9.5% of employee’s annual income (W-2
wages) for employee-only coverage
Minimum Value (MV): Minimum share of cost for
covered benefits plans must pay 60%
9.5%
This information is for illustrative purposes only and is being provided to help increase understanding of the impacts of some of the provisions of the Affordable Care Act (ACA). This
document does not attempt to cover all of the law’s provisions and should not be used as legal advice for implementation activities. We encourage clients to seek professional advice
including legal counsel, regarding how the new requirements may affect their specific plan.

26
Employer Penalty Scenarios as of 2015
Employer Size Scenarios, Criteria Employer Penalties
1-24 Not mandatory for employer to offer coverage
No penalty (employer may qualify for tax
credits)
25-49 Not mandatory for employer to offer coverage No penalty
50 or more
• Does not offer insurance to 95% of full-time employees
• No full-time employee receives a subsidy
No penalty
• Does not offer insurance to 95% of full-time employees
• A full-time employee receives a subsidy
Penalty. Employer pays $2,000
annually times number of full-time
employees, less first 30 employees
• Offers insurance to 95% of full-time employees
• Coverage meets Minimum Value covering at least 60% of
the cost of services
• Coverage is Affordable where employee share of premiums
for single coverage cannot exceed 9.5% of annual W2
wages
No penalty
Important Note: If the employee coverage
is considered affordable (regardless of the
cost for family coverage), then employees
and their dependents are not eligible for
subsidies in the Exchange.
• Coverage does not meet Minimum Value, and/or
• Coverage is not Affordable;
• A full-time employee receives a subsidy
Penalty. Employer pays $3,000 penalty
annually for each full-time employee
receiving subsidy, up to maximum of $2,000
times number of full-time employees, minus
first 30
• Coverage does not meet Minimum Value, and/or
• Coverage is not Affordable
• No full-time employee receives a subsidy
No penalty

27Employer Penalties Scenario Pathways
This information is for illustrative purposes only and is being provided to help increase understanding of the impacts of some of the provisions of the Affordable Care Act (ACA). This document does not attempt to cover all
of the law’s provisions and should not be used as legal advice for implementation activities. We encourage clients to seek professional advice including legal counsel, regarding how the new requirements may affect their
specific plan.
Do you have
FTEs receiving
a subsidy?
Do you offer
coverage to
95% of FTEs?
Employer pays $2,000 annually
times number of full-time
employees, minus first 30
employees
Do you offer
coverage to
95% of FTEs?
Does coverage
deliver minimum
value?
Do you have
FTEs receiving
a subsidy?
Is coverage
affordable?
Do you offer
coverage to
95% of FTEs?
Is coverage
affordable?
Employer pays $3,000 penalty
annually for each full-time
employee receiving subsidy, up
to maximum of $2,000 times
number of full-time employees,
minus first 30.
Does at least
one plan offer
minimum value?

This information is for illustrative purposes only and is being provided to help increase understanding of the impacts of some of the provisions of the Affordable Care Act (ACA).
This document does not attempt to cover all of the law’s provisions and should not be used as legal advice for implementation activities. We encourage clients to seek
professional advice including legal counsel, regarding how the new requirements may affect their specific plan.
Learn More at Florida Blue
New health care reform
website now includes:
• An overview of health
care reform
• Access to our health
care reform ebook
• Videos on various
health care reform
topics
• A subsidy estimator
tool
• Options to call or email
Florida Blue for more
information
29
http://floridabluehealthcarereform.com/

Learn More at HealthCare.gov
The official government
website that includes:
• An overview of health
care reform
• Information for
individuals and small
businesses on how the
ACA affects them
• Will be the official
Marketplace website
for enrollment as of
October 1
30
https://www.healthcare.gov/

Learn More at BusinessUSA
New government site
designed for employers
that includes:
• Material on how the
ACA affects small and
large businesses
• A tool based on size
and location to help
businesses learn about
affordable coverage
options
• Relevant information
from HHS, Treasury,
and the SBA
31
http://business.usa.gov/healthcare

Impacts of the Affordable Care Act

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