 Good morning everyone. Thank you very much. My name is Jeff Crabtree and I serve as the Chairman for the San Antonio Chamber of Commerce's Healthcare and Biosciences Committee and welcome to our symposium on the Affordable Healthcare Act. You know these times are very interesting that we live in having worked with Methodist Healthcare now for some 25 years. I've seen a whole lot of change as everybody has in the healthcare industry but when you think about the Affordable Healthcare Act and what this means to us as an industry as two businesses in San Antonio, I think the change that we're going through in these past couple of years and the next several years is going to be very interesting, very impactful and we have to prepare for it. And so welcome all of you to today's event. I know you'll have a lot of education. You'll walk away with some good points and just as importantly you'll enjoy the networking that occurs when we get together like this so take advantage of that as well. Before I go any further, I would like to indicate that you see a bunch of folks over here and a camera in the back and you'll have cameras in the other rooms as well because today we're broadcasting this on Nowcast and that's over the internet worldwide so we're here to enjoy obviously not only our company but the company of anybody and everybody who wishes to look at this symposium across the United States if not even further than that. And by the way you can go on to NowcastSA.com and enjoy this again and again and again if you'd like down the road. So if you missed something you can come back on NowcastSA.com and enjoy what we've done. Well before we go any further into the symposium I do want to remind us about something very important and as you all know today is the 12th anniversary of the attacks of 9-11 and 12 years ago America confronted one of our darkest days when men and women of this great nation were taken from us in a series of catastrophic horrific attacks and not only young men and women and older adults but also first responders who raced into the inferno that was caused by 9-11 without any regards to their own lives and did immense rescuing and died as a result of those efforts in many cases. And you know in the last 12 years we've gone through a lot as Americans lots of change has occurred and virtually a whole entire landscape and yet it's worth remembering what has not changed. The fact is our character as a nation has not changed and our belief in America founded on the ideals of faith and freedom has not changed as well. So let's at this time if you don't mind and I know you don't spend just a moment remembering the brave men and women who died on this day 12 years ago and those first responders who didn't take a moment in consideration for trying to rescue those from this terrible attack. So let's observe a moment of silence. Thank you very much. Well again we appreciate you for attending our symposium today it's an important symposium when we consider the ramifications of the Affordable Care Act and as small businesses and large businesses it affects us all it also affects us in the healthcare industry and so we've we put together a large panel or good panel of folks to help us whether we're a small business an independent business or a large business and and as every chamber event that we have it would it's also very important to recognize the support of our sponsors that really make this happen. So I'd like to recognize our sponsors today our silver sponsor Cox and Smith and our bronze sponsors Ernst and Young, Blue Cross Blue Shield of Texas Methodist Healthcare SWBC, Wortham Insurance and Risk Management and please join with me in giving them a warm round of applause. Also I'd like to thank the members of our subcommittee within the healthcare biosciences committee that also worked very hard to put together this conference and the co-chairs of the committee who you'll be hearing from shortly Glenn Geller from Low Campbell Uld and you all rather I'm sorry Glenn thank you very much and and Andrew Boardman from Inspirity Andrew thank you very much for your work. You are the folks who put this together and you will be hearing from them in a moment. Also Eric Smith from Wortham Insurance he was on the committee Helen Williams and Workforce Solutions Alamo and Jerry Baruki from Alamo Colleges. So please help me recognize these hardworking individuals. At this time I'd like to introduce the individual seated at our head table right in the middle. Our breakfast keynote speaker we'll be hearing from very shortly Joana and Giovanni. I probably did not do a good job on that. Very close. I mean what a terrific name and I tried to get it. I did it with my hands too. Just great. Well Joana or Joe for short is a past president of the Texas Association of Health Underwriters. Also would like to introduce the 2013 chair-elect of your chamber and the president and CEO of Amidji Bank David McGee. Thank you very much for coming. Joss Sutton shareholder of Cox Smith who you'll be hearing right after this keynote presentation. Joss we appreciate you being here and Dana Krieg executive director of human capital at Ernst and Young will be coming shortly and then president and CEO are one and only who none of us probably could do any of this without his support. I'm sure Richard Press thank you very much our chamber of commerce president. Okay at this time let me get off the stage and all the mistakes I've been making trying to get my tongue around my teeth and introduce to you Andrew Boardman with the disparity. Andrew has done a lot of hard work on putting this together along with his committee members so Andrew without further drew come on up. Good morning everyone. The health care and bioscience committee of the San Antonio Chamber is excited to put on the symposium today focused on the Affordable Care Act and the many impacts that it'll have on our business community. Your chamber's health caring bioscience committee was formed over 10 years ago when members of our industry came forward and advocated for an increased focus by your chamber. Over the past decade this committee has been a primary advocate for the local health industry has produced an annual economic impact study that depicts the strength and size of the industry and was responsible for the creation of BioMed San Antonio a non-profit that does a tremendous job of promoting the assets of the local biomedical industry. This year our committee focused on developing a sound mission and purpose and better defining the value that our group brings to its members and to the chamber as a whole. One of the issues that the committee was tasked or asked to address was the Affordable Care Act and we were charged with being a resource to small and medium-sized chamber members and kind of help you navigate the maze that this this legislation represents. Thus the concept of a symposium was created and we're fortunate to have the expertise of many local firms here today to help us better understand the Affordable Care Act and how this will impact your business. Our committee is focused on continuing to be an ongoing resource to the chamber membership and this event will serve as a start of various events and resources that we push out to chamber member businesses with personal information pertaining to health care and how it will affect their business in the coming months and years. We hope you find the speakers and break out sessions over the next several hours useful and insightful and at this time I'd like to introduce my co-chair for the event Glenn Geller with Low Campbell Ewald to come forward and introduce our keynote speaker. Okay good morning everybody. Everybody awake and thanks for the introductions everybody and also we'd be remiss if we didn't if I didn't take just a moment to recognize really the team that made this happen. Will Garrett and his team leases here. Becky Bridges the whole behind the scenes it's my first time working with them and it's just amazing they did all the heavy lifting so they made this day relatively easy for myself and Andrew I think so thank you. At this time it's my pleasure to recognize your breakfast keynote speaker Joanna Anton Giovanni a great Texas name. Joanna is an employee benefit specialist that worth of insurance risk management and benefits. She's a graduate of Texas A&M University and I know in Texas right people get a little you who or some you know A&M Aggies out there okay and she brings 18 years of employee benefit experience guiding employers of all sizes on employee benefit plan design, vendor selection, data analysis, compliance, wellness implementation, problem resolution and plan administration and I'm sure there's a few other things she does that weren't on my list here. Joanna is past president for the Texas Association of Health Underwriters and provides critical expertise and matters related to the patient protection and affordable care act which is what we're all here to talk about today. She also plays a vital role in lobbying in Austin and Washington D.C. on behalf of the state's insurance professionals and businesses like yours affected by healthcare reform so please join me in welcoming Joanna to the stage. Okay I think the clicker is the clicker up here now oh very good okay so I'm going to come up here I thought maybe I'd be down there not only does my last name warrant the fact that I use my hands when I talk but I also move around quite a bit too I have a hard time staying still but thank you guys so much for having me today I really feel honored to start this day you guys have some excellent speakers and a lot of folks have worked really hard to get here today so I'm just really happy to be here. I will say I've presented with Josh Sutton before oh here he is he's walking back in now and typically my disclaimer is a little bit different than Josh's who is an attorney where his stuff might say something like you know this is not a you know legal advice in any way but I usually have a slide that has a crystal ball that we've used before in the past and the crystal ball basically just said we didn't always know what was going to happen with the affordable care act but I have changed Josh you'll be happy to know I have changed my slide now my disclaimer is that we do know a lot of what's going on however we have not been down this road before so the affordable care act changes everything in our world on January 1st 2014 our country has never had an individual mandate never before have employers had to participate in the health care they have before but they haven't had to right we've never had insurance exchanges and so all of a sudden our products that we're selling look totally different so this is the road we've never been down it reminds me I was telling Josh when I got here about my daughter I have three girls and my oldest is 15 she gets her driver's license in three weeks it's very scary I'm really nervous about it so much so she Emma is she's a great driver but her problem is her lack of direction and where she's going so the other day we're driving down the road and I said Emma I need you to drive us home and I'm not going to give you any direction whatsoever she's like yeah I got this mom I got this I got this so we're driving and I'm thinking to myself surely she's going to look over her right shoulder put her right blinker on and get off at our exit right and I'm sitting there and I'm sitting there and she drives right past it so then I thought well we've got two exits in art to get to our neighborhood surely she's going to put her blinker on now she's going to look over her shoulder now and then we drive right past that exit as well so I thought well how long can I hold my tongue well I can hold my tongue for two minutes and that's as long as I can hold my tongue so now I know the answer to that I get tested all the time by my kids so I can hold my tongue for two minutes and so I say Emma where are you going what you missed you're lost you missed our exit she says she's all calm and she's like mom you cannot get lost if you don't know where you're going I was like yeah and I'm thinking about that thought and then she said besides my favorite song was on so I'm like oh well as long as her favorite song is on maybe she maybe not I'm not quite sure but but I trust the information that the driver's ed folks gave her to keep her going but I'll tell you it's almost painful from the passenger seat than it is in the driver's seat right and that's where we are going in 2014 so this next 45 minutes is your crash course of a driver's ed course to tell you about the affordable care act and then I'm going to move you guys into different rooms and you're going to be working with the driver's ed drivers that will tell you how to drive your car when we get there although I'll tell you not one of us has experienced this so it's going to be different from the passenger seat as well as it will be from the driver's seat but we're all going to be in that driver's seat so this applies to all of us in the room so let's get going with that that one's better than the the crystal ball right yeah so you and I so I say we've never experienced this do any of these words on this screen look different to you with the affordable care act that has 2600 pages of legislation we now have 18,000 pages of guidance we have all new definitions so my idea this morning for the first 45 minutes is to talk to you about definitions and then what I'd like to do is invite you to write down words that you may not know or that may have intrigued you and then when we go to our breakout sessions that's where you should be able to ask about those definitions so I'm going to skim through a lot which I can promise you that I could dive a lot deeper into each of these different things but just for the sake of time and to make sure we get through a lot we're going to go over them so I don't want you to feel like you're going to learn everything you need to know in the next 45 minutes but what I hope to do is peak your interest and maybe even get you to jot down some words that our driver's ed instructors can help you with along the way okay okay so with this agenda we're going to talk about a few common misperceptions we hear a lot of people say oh it doesn't apply to me right so we're going to talk about a few common misperceptions as it relates to the individual mandate the employer shared responsibility and then and that's where really we have breakout sessions to talk to about the employer's piece of this but what I'd like to do is talk about the the exchange that's coming about everyone's hearing about the exchange that's coming so we're going to talk about the basics of the exchange really what types of plans are you going to find in there and what is that going to be like so we're going to talk about that and then I'm going to briefly touch on product modifications and changes because the insurance card in your wallet that you have today is not going to be the same insurance card that you have in your wallet in 2014 okay now the compliance piece of this I'm going to briefly touch because Josh is going to spend some great quality time with you guys when I'm done talking about compliance so the first common misperception is I'm covered through my employer so this doesn't apply to me I hear that so much I get my insurance through my employer this doesn't apply to me why does it apply because we're American citizens right and everyone now has an individual mandate starting in 2014 so and when you file your taxes in 2015 you have to show proof of insurance you can't go longer than three months being uninsured in 2014 okay so we have people oftentimes right now that are maybe their employers anniversary date is June and they waive coverage so they won't be offered coverage again until June of 2014 that'll put them longer than three months uninsured in 2014 right so it's important for everybody to know that you cannot go longer than three months in 2014 without being insured so everyone must have insurance except the exceptions there's always exceptions right so there are exceptions and quite honestly the exceptions will be granted in the exchange so we're going to spend some time talking about the exchange in a minute but what happens if we don't have insurance in 2014 it's a $95 penalty per adult or 1% of your income whichever is greater now I've heard people say well that's not very much the cost the cost for insurance cost that costs more than that well that may be true but I will tell you that each year that penalty gets a little bit stiffer okay in 2016 it's $695 per adult or two and a half times your income so each family could have a potential maximum of $2,085 in 2016 so that might make someone think right so we all have to have insurance except for the exceptions this is really what the market landscape will look like we are going to see quite a few people now we have Medicaid in Texas right now we're not expanding Medicaid but I will tell you that we will probably have more people now that they're required to have insurance join programs that are currently available and they might be eligible for now but we'll actually see them enroll um CHIP for example 40% of people that are eligible for their children to be covered through the CHIP program are not currently covering their kids so we will probably see people that will actually enroll in programs that are available to them so government programs are going to be huge large group employers and health plans there's a definition for large group in Texas it's going to be 51 and above for large group until 2016 then a small employer is 100 and below okay then we're for the individual and small group we're going to have exchange products now we're going to talk about the exchange but you can buy individual insurance both in the exchange and outside of the exchange now there's going to be a chunk of us that have a grandfathered plan and if you don't know if you have a grandfathered plan I'm here to tell you that you don't okay because you would have had to have certified that yourself that you've had the same plan since March of 2000 what since the bill was enacted okay so in 2010 so if you are not sure if you have a grandfathered plan you probably don't have a grandfathered plan if you're the employer that is okay so another factor fission all businesses will be required to provide health insurance that's not true not all businesses are going to be required to offer health insurance only the applicable large employers okay that's a new word and with an applicable large employer becomes our shared employer shared responsibility now we just recently heard that there was a delay so what that means is if you're an applicable large employer and we're going to talk about the definition of that in just a minute that you were supposed to have offered insurance by January 1st of 2014 that was pushed back one year to 2015 which quite honestly helps large employers quite a quite a bit especially because the counting of employees has become so important and we're going to talk about that I'm going to show you some things and then we're going to have a breakout session just on counting employees which is really really important with this law going forward but with the employer shared responsibility you've got the applicable large employer which basically means that you have 50 or more full-time and full-time equivalent employees now in the breakout session they're going to do that math for you they're going to help you with that so I'm not going to spend too much time with that but if you aren't applicable large employer you're required to offer minimum essential coverage at an affordable price to employees working an average of 30 hours or more a week or 130 hours a month okay so that's your requirement and if you don't do minimum essential coverage at an affordable price there could be an a penalty or a b penalty now you'll notice josh's slides that say 4980ha 498hb yeah so he's got the legal version of what those penalties are but there's two different penalties that an applicable large employer might have to um might have to pay so that's why the count now the count has many definitions now right you can by definition by statute be both a large employer and a small employer so if somebody says to you are you a large employer you say in reference to what because you can be both a large group and a small group employer so we have different calculations that we're using the first one is for al e are you an applicable large employer that is the count and that's a monthly count so ever all the employers that especially we all should quite honestly have a way to know how many employees we have by month how many are working 30 hours or more a week and then how many aren't the part-time employees because we're going to count those number of hours because that all adds up until our equivalents okay so the applicable large employers may be subject to penalties and they have to offer minimum essential coverage at an affordable price the other reason why count is important is because a t and e i kind of emailed the other day from one of my insurance carriers and then the subject line said a t and e audit average total number of employees never seen an audit like that my whole life so i had to figure out what is this all about right the average total number of employees you add up all of your employees part time seasonal all of them full time you add up all of them and if you're over 50 then you could get a large group segment quote so your average total number of employees determined by the for the carrier which segment you're in but your a e determines if you're penalty eligible so these are things we're going to talk about in breakout sessions but i want to make sure you know that counting is important it even gets more complex with the counting and i don't want to lose you here but what i want to do is make sure that you guys know that you're going to have to have a way of of keeping track or record keeping for employees you want to track the number of hours are they 30 hours or more a week we don't know right we need to be able to track that determine if they're eligible or not we also have a new term in the legislation called variable our employee and a variable our employee is variable it basically means when i hire you have no no idea how many hours you're going to work so let's say i hire a wait staff and i think you're going to be a great employee i think you're going to take as many hours as you can but i then all of a sudden something happens at home or maybe you take more classes at school and you're not working as much as i thought you would work so oftentimes we hire people and we don't know how many hours they're going to work a variable our employee allows an employer when they calculate to have up to a 13 month waiting period for new employees so that's something that's new if you're interested in that then you should look at the calculations for that there's also affordability the word affordability is now a big term with the affordable care act right it's in the name for an employer there's three different safe harbors that you can use to determine whether it's deemed affordable for that employee or not and the calculation for each of those things is different so it may help you as an employer to use one method versus another so those are the types of things that you're going to be looking at as an employer but we do know that the penalties were delayed again we have the a penalty and the b penalty the a penalty is the minimum essential coverage penalty so i'd like to take a minute and talk about what minimum essential coverage is and then also the unaffordable factor we're going to take a look at an example of the unaffordable factor it's a two thousand dollar per penalty per person for an a penalty and if it's a three thousand dollar per person now it's only if someone goes into the exchange and again i i said that very loosely the way i described the two thousand or the three thousand because there's a calculation with all of that and we're going to go into that in the breakout session so i really won't spend too much time what i want to concentrate on is the minimum essential coverage and the affordability part so when we talk about our plan i say what type of insurance do you have right now and you might say to me well i have a two thousand dollar deductible twenty five dollar office visit copay right that's how we describe the characteristically that's how we describe our insurance right now right well going forward in 2014 we're gonna say i have a minimum value of 70 percent i have a minimum value of 60 percent when we're a large group employer our plans will now be defined by having a value now that value will then keep an employer from not having to get a penalty the value of that plan so it's going to be very important to an employer with the value of their plan is now when we talk about minimum value basically what it we're referring to is not the cost of insurance at all it has nothing to do with premium how much you pay for the insurance the value of the plan has to do with a member actually using the insurance and how much their exposure might be for claims there are claims in four specific categories physician services hospital services pharmacy and lab and x-ray the other thing that's interesting is if i say well what is your plan look like right now twenty five dollar office visit copay seventy five dollars at the er now in our world right now if we pay our twenty five dollar copay at the doctor's office we are perfectly content with the goods and services we receive for that twenty five dollars are we not we're happy it's twenty five bucks right that's what i paid when i went there then that doctor sends me to the pharmacy and i paid forty dollars for my prescription again i'm happy with the goods and services i received from my forty dollars perfectly content in our world going forward in 2014 those copays go towards your out-of-pocket maximum so before we had copay island the copays you can pay copays and copays and copays now they actually count towards something so that's why if someone says oh i'll just keep the plan that i have if you're on an individual plan if you're on a small group plan large group plan it's not going to be the same plan your copays are going to go towards your out-of-pocket maximum assuming you have copays on your plan so everyone's insurance will change not on january first but when your plan renews in 2014 okay now i'll tell you also that the out-of-pocket maximum is tied to our hsa plans our high deductible health plans but they're not hsa qualified they're high deductible health plans so in 2014 that magic number for your out-of-pocket is six thousand three hundred and fifty dollars not normally wouldn't talk about math in a room like this because then i start messing people up with the with the new and math in their head but the 6350 is a very important number because when i mentioned that the copays go towards your out-of-pocket and the deductibles and the coinsurance they all go to 6350 so if i have a minimum value on my plan of 60 percent i'm looking at a maximum out-of-pocket of 6350 so if the value of my plan is a 70 percent that the out-of-pocket maximum goes up if it's an 80 percent it goes up so i should say goes down that's the right way to say it so maybe you'd have a five thousand dollar exposure instead of 6350 right so that's how we're able to calculate the value it's your maximum exposure and everything all the services that you receive go towards the out-of-pocket maximum when it never used to do that before now when we talk about affordability of the plan what's affordable to you may not be affordable to me right i mean i'm not going to go spend 200 on a pair of shoes whereas my sister may do that she's in the front row right here i know she does that but but i'm not going to do that okay okay but so it's defined in the legislation what affordable is for healthcare it's nine and a half percent of someone's income that's what's affordable okay now there's safe harbors because when we talk about the exchange if we're going to talk about in just a minute that the affordability of the insurance comes into account the nine and a half percent of income comes into account in the exchange as household income but from an employer's perspective it's you have safe harbors that you're responsible for doing the nine and a half percent affordability based on the employee's income okay and it's the lowest option minimum value plan that you offer your employees so you might offer three or four different plans to your employees but the lowest option plan the price that they would have to pay for that plan can't be more than nine and a half percent of their income so let's say regardless of what the plan looks like right so let's look for an example of for the w2 right here if somebody makes twenty four thousand dollars a year which is two thousand dollars a month they cannot pay more than nine and a half percent of their income which means we cannot charge the employee more than a hundred and ninety dollars a month so if we have a four hundred dollar rate and i pay fifty percent as an employer i'm going to charge my employees two hundred dollars and i pay two hundred dollars will be deemed unaffordable because i can't charge my employee more than a hundred and ninety dollars a month okay now if that employee went to the exchange my employer would receive a three thousand dollar penalty for that one employee because it's deemed unaffordable for that one employee so that's why affordability matters so texas won't have an exchange i hear that all the time that factor fiction yeah it's fiction we i mean it's it we are definitely having an exchange so let's talk about the exchange because the exchange every state must have an exchange on january first 2014 and if we don't open our own the federal government will open one for us okay don't let the word exchange scare you too much that's what i've heard so many people talk about exchanges they go oh my gosh it's just like this crazy i don't even know what this is right we have exchanges right now okay we've got the new york stock exchange farmers market those are exchanges right we also have travel velocity and i will tell you that the administration specifically said that the health insurance exchange should look like travel velocity so these are the types of exchanges that we're already using we just never had them as it relates to buying health insurance although we have actually okay so let's talk about the basics of the exchange and again this is where i'm going to get some definitions and stuff going for you because i want to make sure we talk about some key pieces qualified health plans do you have a qualified health plan when i ask you that don't get concerned it could be etna blue cross united health care could be all the names we know and love today but a qualified health plan just means it has to cover certain things has to be certified by the exchange to be a qhp is another term for that there's going to be three different kinds of entities that will be able to sell plans on the exchange your traditional health insurance carriers like i mentioned etna blue cross united health care those types of companies we're going to have co-op plans i gotta tell you i haven't seen a whole lot of traction on the co-op plans so i wouldn't be too nervous about that yet and then multi-state plans the opm office of personnel management will have two different plans on the federal exchange one of them will probably be a carrier that we know and love and the other will be a non-profit agency that will have that could have a plan there okay so all the states will have to decide there's three different design options that a state can choose from do i want to create my own exchange which we have i think 17 states that did that do i want to partnership or do i want to be a federally facilitated exchange and this is the map of the country you can see texas and yellow is the federally facilitated exchange and we're not alone but just because we're going to use the federally facilitated exchange in 2014 doesn't mean we can't pass legislation in the next year or the next year or the next year and get our own exchange we might want to see how the other ones operate before we open our own okay so just because we're doing a federally facilitated exchange in january for one we're not alone but for two doesn't mean we can always be that way it can change okay so let's talk about the exchange there's two pieces of the exchange although it's one portal and i do actually believe that that is going to be the logo for the exchange um when i was in dc a couple months ago they said that they didn't like the word exchange because they didn't like the way it translated in Spanish so now it's called marketplace instead so it's going to be the health insurance marketplace that's how we'll see that's how we'll hear the word exchange the federally facilitated exchange but there's two different options for you now again think about it as a computer screen that you're going to log on to although there is an 800 number that you can call okay and you're going to either go one of two directions you're going to go to the shop exchange which is the small business health options program for small employers we're going to have one carrier on the shop exchange in texas it's going to be probably blue cross blue shield um and i don't know exactly what the product looks like there actually i'll be in the uh meeting in austin tomorrow to find out all the products there but but we'll probably have one shop pro product for small business employers the other exchange that we're going to hear more traction on and the reason why people will really go there is for the individual exchange and the actual name of that is the american health benefit exchange that's the actual formal name for it in the legislation but that's where an individual might go to get subsidized health care in addition to going to just buying health care so you can buy insurance in the exchange and not get a subsidy for it okay however i will tell you when we think about a subsidy right now our minds think low income that's just kind of what we think sometimes right but i'll tell you that that is not the definition of subsidy going forward you can be a family of four make a ninety thousand dollars a year and qualify for a subsidy so we will have a lot more people that qualify for a subsidy within the exchange now the first thing i want you to notice if you have employer sponsored coverage that's minimum value at an affordable price you're disqualified from a subsidy within the exchange whether you're a dependent or an employee there's five key purposes of the exchange i'm not going to go into this too much except for to say the five main topics the things that they're looking at is consumer assistance we're going to hear a new word called a navigator a navigator can be an agent it doesn't have to be a licensed agent okay but they were able to help you get your plan then plan management the eligibility the eligibility is so important because when you call in or when you log in that's going to determine whether yourself the subsidy eligible or what if you call in or you dial in and then all of a sudden you find out hey i'm medicaid eligible i didn't even know it so that that portal will be able to help you figure out what you're eligible for okay and the enrollment function of it for the employees to be able to get those or the individual to be able to get that plan and then the financial management financial management we think of it more like running a business when we think of financial management rather than how much it costs there but this is xerox um was hired as a consultant for for the um for the government to determine what the federally facilitated exchange will look like i'm not going to go through this graph i think the visual that i want you guys to get with this graph is that anywhere you see in purple those are the federal agencies that will be working within the federal exchange so this is our kind of our federal data hub and these are the agencies that would be able to determine eligibility and be able to determine whether or not you qualify for subsidy so they're going to be talking to employers someone shows up at the exchange they're going to get in touch with your employer to see if you have an offer of minimum essential coverage at an affordable price right so there's eight different federal agencies that will have access to the information in the exchange this is a simpler on the eyes version of what the exchange this is also by xerox but this kind of describes what it would look like something maybe from the outside rather than that other graph was looking at the inside but they expect that 29 million people will be covered in the health insurance exchange by 2019 and when somebody gets there they'll be able to determine their Medicaid their chip their public subsidy eligibility or their employer based option which is that shop program so they'll all be able to do that in one place hix is an acronym we're using quite often for health insurance exchange so if you see hix that means health insurance exchange so what's covered once you get to that exchange right we have to have benchmarks and so they decided that each state would have a certain benchmark texas decided that we would just default to what the legislation said and we're not alone we're the yellow states again with a lot of other states that bench that that just did the fallback so we have essential health benefits our essential health benefits in texas will be mirrored after blue cross blue shield and i wrote down on the side right here what that benchmark plan is it's rs 26 i mean like we got the definition of the plan name in there so we know what our essential health benefits are there are 10 categories that must be covered by a qualified health plan so there's 10 categories that must be covered there once those 10 things are covered in there then we can buy the insurance and the way that the insurance will work is you're going to have different plan levels that we call the metal plans bronze silver gold platinum and then this is where our copays might change our deductibles might change the coinsurance might change so if you have a bronze level plan it's going to cost less but you're going to have more exposure at the doctor's office compared to the platinum plan which is going to cost more on a monthly basis so a higher utilizer might want the platinum plan but you're going to pay less when you get to the doctor's office now each one of these bronze silver gold and platinum plans has a value and that's an actuarial value and i'm here to tell you that minimum value and actuarial value are two different things minimum value has to deal with an employer actuarial value has to do with individual and small group they're similar but the calculators are different so i just want to make sure you know that they're a little bit different but we've already kind of talked about what minimum value is and so actuarial value is very much similar to that but that will tell you what that plan is the value of that plan is worth to determine the cost for you once we determine what the cost of that plan is then we look to see your eligibility to see if you get a subsidy to pay for that plan so based on your income a hundred percent of the federal poverty level you could get a you could get a subsidy to help pay for the price of that insurance and then also when we hit that 200 to 250 percent of federal poverty level right in the middle you have cost sharing options as well so that means you might get the gold plan for the silver price okay all that that eligibility will be determined when you get into the exchange so here's an example and it might be hard for you guys to see so i'll just kind of talk through this quickly if the plan cost if someone makes $80,000 a year with a family of four and the plan is anticipated to cost $12,130 based on nine and a half percent of that person's income that means that they shouldn't pay more than $7,600 so that means that the government tax credit will be $4,530 now when they pay for that insurance they will be paying the $7,600 and the exchange will be paying the $4,530 for them so the insurance company gets it right away okay it's an upfront subsidy okay there are some financial calculators that you guys can go to so we will have these slides posted for you guys you can go back and get to these slides here now an employer has to have their exchange notification out quickly by October 1st you have to have that exchange notice out so if you have not gotten it out please touch base with your insurance broker they need to get you that form or you can go onto the Department of Labor they've got the model notices there there's one for people that are offering insurance and the separate one for people who are not currently offering insurance there's one in Spanish for both of those as well so there's four different exchange notices and all the employers need to give that exchange notice out it has to be out by October 1st and then once January 1st comes you have to give it out to your employees within 14 days of data hire so I keep telling all my employers when they fill out a 99 to come work for you that's when you give them their exchange notice don't do it when they're eligible for their health insurance which might be 60 or 90 days later right this is my favorite exchange notice dear employee there's an exchange please go there and determine if I please go there see if I owe a fine because just as a reminder all fines for an employer are determined at the exchange if I have a law firm and everybody is a very high income they have over 50 full time equivalents at the law firm they just choose not to offer insurance because everyone's doing their own thing no one goes into the exchange they'll never get a fine for not offering insurance there it has to have someone go to the exchange in order for the employer to get a fine okay there are going to be open enrollment dates I hear people say well what if I break my leg I just go to the hospital and then I'll just get my buy my insurance then I hear that oftentimes too there are going to be open enrollment dates and initially the open enrollment is October 1st through March 31st of 2014 so we have a six month period and then after that it coincides with Medicare and open enrollment unless you have a qualifying event you can come on at a different time the word exchange again we hear it it's a buzzword so if I hear that exchange is popular then if I'm thinking of how to sell insurance I might say well I'm going to open my own exchange and so that's what we have we have a lot of other exchanges the insurance carriers are getting exchanges insurance brokerage agencies are starting their own exchanges so don't be concerned but basically it's an offer of insurance that should help you to buy insurance so the only way you're going to get a subsidy is then through the federal exchange but you can see exchanges outside in the open market as well so who's going to buy in the public exchange it's going to be people that have between 100 and 400 percent of the federal poverty level those are probably the ones that are going to buy in the public exchange or if you're a small business employer and your average employees are if you have 10 or fewer employees averaging $25,000 you can get a small business tax credit in the exchange in the SHOP program outside the market I think that's pretty much we'll still see the market that we see it today we have exchanges I mentioned at the very beginning this is medicare.gov we currently have an exchange where people can buy insurance right now so it's not a scary thing for us okay actually I'm going to go through right here because I want to talk about a couple product modifications but I think we're getting close on time here in the small group market our world changes for various different reasons for now your rates can only be charged a rate for your age where you live and if you smoke or not that's what the small group market looks like so oftentimes I'll have employers that have maybe 49 employees and they say should I stay small employer so that I don't get penalties and my my thought is well that small group market might cost more so sometimes if you're already offering minimum essential coverage at an affordable price you're not going to get penalized so sometimes it's best to be in the large group market you might get different rates that might be better rates for you so if you're close there you should visit with your insurance broker to talk about that in the small group market you can't have a deductible more than two thousand dollars or four thousand for a family now they did come out with guidance recently that said that if an insurance carrier needs to have a deductible higher than that to meet the bronze level then that's okay so I know that there's going to be a couple three thousand and four thousand dollar deductibles that are out there okay the other thing that's important to know is 105h what non-discrimination small employers have never had to worry about non-discrimination before so we have to worry about that now you're going to start seeing on January 1st taxes and fees on your insurance policies you might see it with some carriers they're starting to the bill will actually start on January 1st the other ones will wait until after you renew but again we're going to I'll put this stuff online for you so that you can go look to see what the taxes and fees are but we're going to have some fees that start on January 1st okay depending on which carrier that you've got so in summary are you a large employer are you 50 plus you need to determine whether you're an applicable large employer because then you'd have to offer minimum essential coverage at an affordable price for employees that work more than 30 hours or more a week if you're a small employer you're going to have enhanced benefits but the rates could change because we're going to that a community rating model it's a different system employers cannot have an eligibility period longer than 90 days going forward so that means if you have the first of the month following 90 days right now for your new hires that you can't have that anymore our recommendation is to go first the month following 60 days otherwise you're you left prorating premiums to get that 90th day okay there are going to be some new compliance we've got the exchange notice and we've got some required taxes that we're going to be paying in January on January 1st and then there's going to be product modifications for all of us so prepare for more legislation and changes we already know that the the administration had told us let's pass it and see what's in it right so we're going to probably have some changes along the way and that's okay but be prepared for the changes that might come okay there's some additional resources that I've got there for you so enjoy the ride and you know as my daughter Emma would say just turn the music on it might be more enjoyable so thank you very much okay so the first question I have is did everybody get that you got it uh worth them does have a they have uh folks here to chat with you later uh during some of your breaks so please take advantage of it and Joanna thank you for setting the stage for the next two and a half hours uh as Joanna said we're going to go in more depth in our breakout sessions immediately following this and Joanna we really appreciate you taking the time today to come out and uh share this with us uh I wish you had just squeezed in a little bit more I don't know uh it was a little uh as a token of our appreciation Joanna we have a small gift for you that before you leave uh we'll get it to you uh you truly are a leader in this space and an expert in all things related to ACA and we've gotten you Bill George's national bestseller uh called True North titled True North which New York the New York Times calls one of the most important books on leadership to common years also uh important for us to recognize George is also CEO of Metronics so um happens to play in this space as well okay what's going to happen now we're going to take a 10 minute break get something to eat whatever you need to do and following that break we're going to have a general session for everybody right next door and uh it's for all attendees the session will feature Joshua Sutton Joshua's right back there you'll see him in a moment from Cox Smith as he discusses the compliance side of Affordable Care Act uh following that session we'll begin two concurrent breakout sessions in rooms A and B and if you look at the program you have the topics being covered uh are noted in there each session will run twice so you're not going to miss anything uh you could take A first and B second or B first and A second and you'll get all the uh informations and the rooms are labeled on the outside thank you again for being here and we'll see you back in this room around 11 45 for our luncheon program so enjoy the morning thank you