Despite the volume of political rhetoric surrounding the Affordable Care Act (ACA) in Washington, the Kentucky Health Benefit Exchange (HBE) began operations last Tuesday and, for the time being, will continue enrolling people into health insurance programs, or eligible families into Medicaid, through March 30, 2014.
March 30 is the current deadline for individuals to comply with the ACA’s mandatory health insurance program.
Carrie Banahan, director of the Kentucky HBE, explained that the primary goal of the Exchange is to provide a health insurance marketplace for families and individuals who have no coverage because they couldn’t afford a plan or were consistently denied coverage because of a pre-existing condition.
People can use the HBE to find affordable health insurance plans, Banahan said. Families can also find out if they qualify for assistance that would reduce the cost of their monthly insurance premiums or provides special discounts for health care services, she said.
It is possible, for instance, for a family of four with a household income of $48,000 per year to qualify for payment assistance that would result in an estimated monthly premium of $252.
Governor Steve Beshear cited other scenarios where the Exchange could help. Among them was a plan where a family of four earning up to $70,000 a year could spend $403 a month for insurance.
The Kentucky HBE has been applauded nationally for the care that planners have taken to develop a program that’s easy to use and easy for consumers to understand, Banahan said.
“One of the significant accomplishments of the Affordable Care Act is to make it illegal for people to be denied insurance because of a pre-existing condition or to have treatment for their condition excluded for the same reason,” Banahan said.
There are about 4,100 Kentuckians enrolled in Kentucky Access, a high risk pool for people with health conditions that prevented them from buying health insurance.
“We believe the majority of those folks will buy insurance through the Exchange,” she said.
The program will also determine if an individual’s or family’s annual income makes them eligible to receive Medicaid coverage, Banahan continued. But the Health Exchange is not reserved exclusively for the use of those without insurance. It is a marketplace and anyone, regardless of their personal income, can shop for health insurance at the HBE.
Those who may find the Exchange beneficial, Banahan said, are self-employed professionals or those employed by a small business that cannot afford to offer health insurance coverage as a benefit.
Even people who have insurance through an employer can comparison shop in the Exchange. However, Banahan warned that a person who turns down the health insurance offered through their job will be responsible to pay their own premiums.
To clarify one misconception about the Exchange, Banahan stressed that the HBE is not a government-sponsored insurance program.
“The Exchange is a marketplace in which people can buy coverage from private insurance companies,” she explained.
There are a number of ways in which people can access HBE services. By far, the most convenient way is through the HBE website: kynect.ky.gov.
Not only can people use this website to enroll in an insurance plan, they can also use a calculator included on the Exchange website, to find out if their annual income qualifies them for the Medicaid program or for payment assistance on their monthly insurance premiums.
Regardless of whether they qualify for Medicaid or payment assistance, any family can review the insurance products available through the Exchange and find out if it provides services cheaper than buying coverage outside the program. The calculator and the Exchange marketplace can be browsed without entering personal information or being obligated to buy anything.
The insurance products are categorized according to four categories: Bronze, Silver, Gold, and Platinum. Each will provide the same 10 essential health benefits that the ACA requires of all health insurance companies, regardless of whether they are listed in the Exchange or offered in the market.
The difference is choosing between plans that pair lower premiums with higher deductibles or higher premiums with lower deductibles.
Premium assistance is only available through plans on the HBE, Banahan said.
Another advantage offered through the Exchange is an apples-to-apples comparison of insurance plans. The layout is easy to understand and easy to navigate, she said.
“We have tested the Kynect website with several audiences to see if people can navigate the website, submit the required information to sign up for a plan and the comparison charts on which consumers can base their decision.
The programmers have implemented improvements from the feedback we have received from our test audiences. There will be some tweaks we will need to make when we go live, but we’re ready,” Banahan said.
Kynectors and other assistance alternatives
Consumers don’t have to be computer literate to access the information on the HBE. One of the next steps in the development of the HBE is to train local people in Kentucky’s regions to be “Kynectors” who can answer questions about the Exchange and help them know if they are eligible for premium assistance or service discounts.
“Soon we hope that people in benefits offices across the state will be able to help people. We are also looking to local libraries as resources to guide people through the Exchange, if they need assistance,” Banahan said.
In the meantime, the HBE is seeking out individuals to train in this massive first year effort to get people enrolled.
Information can be handled over the phone by calling 1-855-4kynect (459-6328). For those who prefer pen and paper, Banahan said the Exchange will send a paper copy of the application to families if that would help them.
Health Benefits Exchange and small business
There is no requirement, nor has there ever been, for any business to provide health insurance coverage for its employees, said Bill Nold, deputy director of the Kentucky HBE. It is up to the business to decide if it wants to add health benefits to its employment package.
However, Nold said, if a small business wants to provide health insurance coverage to its employees, the HBE’s Small Business Health Options Program (SHOP) provides an employer several options and advantages.
Chief among them is the freedom employers will have to offer their employees more than just one or two coverage options from a single insurance company.
Businesses can review the entire list of certified insurance plans that every insurance provider has on the Exchange and select those plans they want to offer their employees. They are not limited to using one company.
Kentucky is one of the few states whose HBE allows small businesses the flexibility of offering more than one insurance plan from more than one company.
Furthermore, once a small business has chosen the plans it plans to offer its employees, the HBE handles the details concerning enrollment of employees.
The HBE takes the convenience further. Once enrollment is complete, the participating small business receives only one bill to cover its part of the insurance premiums, Nold said.
“We would handle distributing the money to the various insurance companies according to the plans that an individual small business has selected,” Nold said.
For businesses with 25 full-time employees or less, using the SHOP to provide the health insurance could entitle them to a substantial tax credit.
To qualify for the tax credit, the business must:
• Use the SHOP to provide their company health insurance.
• Have 25 or less full-time employees. Part-time equivalents will not be counted.
• The employer must pay at least 50 percent of the premium for each employee.
• The employer must have “a group average annual wage of under $50,000” according to the HBE SHOP fact sheet.
“From the point of view of small businesses, using the SHOP can save time and administrative costs of managing their employee health insurance benefits. Once the plan has been established, it is just a matter of keeping up with one check for the premium coverage,” Nold said.
Rumors that small companies face penalties if they don’t offer health insurance are just that — rumors, Banahan said. There is no penalty to a small business if it doesn’t offer health insurance benefits.
However, if a small business wants to provide that service, it will need to be offered to 100 percent of the employees and the business must, of course, either be located primarily in Kentucky or employ a majority of people from the Bluegrass state.
The business must also be willing to pay 50 percent of the premiums and have at least 75 percent of its employees enrolled in the program. The Exchange will send out enrollment notices to employees during each sign up period.
Despite the debates raging in Washington over the mandatory insurance program, Banahan said that the Kentucky HBE is going forward. The program has been over a year in development. It is fully funded and ready to go, she said.
The federal government has already spent an estimated $125 million to help finance Kentucky establish its Exchange program, she added. She doesn’t know how much has been spent nationally to build the infrastructure for the exchange programs.
“We can’t help what may happen on a larger level. We’re moving forward and what people have seen so far about the Kentucky HBE, they have liked,” Banahan said.