Manny Munson-Regala JD

Assistant to the Commissioner

Minnesota Department of Health
September 30th, 2013
THE ACAS AND SMALL BUSINESS:
IMPACT IN MN
AGENDA
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Why Reform?
Provisions affecting Small
Businesses
MNsure
What Next

WHY PASS THE ACA?
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VALUE PROPOSITION?
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MINNESOTA
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HOW IS MN DOING?
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Recognized as a leader in health and health care, but
Increase in uninsured
Health disparities between populations
Health care spending continues to increase (13.9% of
state economy (up from 12.8% in 2006)

Used to be 1
st
in the UnitedHealthcare rankings, now 5th

ENROLLMENT FOR SMALL GROUP
491,079
359,775
0
100,000
200,000
300,000
400,000
500,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Fully Insured market only
Source: MDH, Health Economics Program; estimates based on data from various sources.
COMPOSITION OF THE WORK FORCE
Up to 100% FPL,
2.7%
101 to 200% FPL,
35.3%
201 to 300% FPL,
29.5%
301 to 400% FPL,
12.0%
More than 400%
FPL , 11.9%

Small employer population includes employees who work for an employer with 2 to 50 employees.
Source: MDH Health Economics Program analysis of the 2011 Minnesota Health Access Survey.
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ACA AND SMALL BUSINESS
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SELF EMPLOYED
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Individual mandate- can be satisfied by ESI (including
COBRA and retiree coverage), Medicare, Medicaid,
CHIP, VA coverage and TRICARE
Can purchase on the MNsure
Access to tax credits on sliding scale
Coverage through Medicaid expansion
Coverage through Minnesota Care

No employer mandate
Protected by MLR rule
Limited to $2500 contribution for
FSAs
Medicare withholding increases
from 1.45% to 2.35% for higher
compensated employees (e.g.
200k)
No more waiting period after
2014 for ESI
Eligible to participate in MNsure
If offer coverage, must provide
Summary of Benefits and
Coverage
Wellness incentives up to 30% of
premium; with up to 50%
difference for tobacco use
Two tax credit programs- but not
for employers 25 to 50
Must provide notices to their
employees about exchange, tax
credits and potential impact on
employer contribution

50 OR FEWER EMPLOYEES
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Department of Labor (DOL) requires
employers to notify current and new
employees notices of their coverage
options
Generally applicable to all employers
that employ one or more employees
that produce $500,000 annually
All new employees must begin
receiving the notification by October
1st, 2013 within 14 days of hire
Current employees hired prior to
October 1st, 2013 must receive the
notification by October 1st, 2013
Can be sent via email


Examples can be found on the DOL
website
http://www.dol.gov/ebsa/healthreform/i
ndex.html
Must inform the employee of:
the existence of Mnsure
contact information of Mnsure
explain that employees may be
eligible for premium tax credits
under the ACA; and
that purchasing products through
MNsure may eliminate employer
contributions
EMPLOYER NOTICE
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GOAL? 1.3 MILLION MINNESOTANS
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Individual Consumers
300,000
Small Businesses and
Employees 150,000
Medical Assistance/
MNCare 850,000
Advantages of Exchanges in general
Transparent, competitive market with
better information and more choices
Aggregated buying power
Defined contribution and employee
choice of issuers and plans
Option for employer defined
contribution with one bill, one check
administration
Advantages specific to MNsure
Employer tax credits
Advantages resulting from market reforms
Rating reforms in individual and small
group markets
Risk adjustment in small group market
Limits on allowable Minimum Loss
Ratio
Increased risk pool from more
Americans covered

WHY MNSURE AND ACA INSTEAD OF CURRENT
MARKET
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Must exist in each state (either as
state or federal exchanges) Minnesota
decided to implement state-based
exchange or marketplace called
MNsure
May be separate or combined with
individual exchange We have one
marketplace
Must be self-supporting by 2015
MNsure funded by fee of up to 3.5% of
MNsure premiums
Individual and small group risk pools
may be combined or kept separate
Currently separated
Serves 1-100, or, at state option: 1-50
until 2016 Minnesota at 50
States may expand to larger
employers beginning in 2017 Policy
decision still to come
State agency, non-profit or hybrid
Minnesota created quasi state agency
(subject to some but not all state rules)
Active purchaser or clearinghouse
Clearinghouse in 2014, Boards option
afterwards
SHOP EXCHANGES: ACA OPTIONS AND
MINNESOTA'S CHOICES
MNSURE: DEFINED CONTRIBUTION

States can offer employers options:
(1) employees can choose any QHP offered in the SHOP in any tier;
(2) employers select specific tiers from which an employee may choose
a QHP;
(3) employers select specific QHPs from different tiers of coverage from
which an employee may choose a QHP; or
(4) employers to select a single QHP to offer employees

MNsure will offer all of the employer options

MNSURE: BILLING AND OTHER SERVICES
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MNsure will:
provide bill with details of employer and employee contribution
employee pays employee contribution through payroll deduction
employer sends total premium to the SHOP
Premiums remain the same throughout the employers plan year
Customer service provided by a broker, MNsure or the insurer
Changes to coverage during the year (adds/drops) made on MNsure
MNsure notifies employer of renewal process
MNSURE: PRODUCT OFFERINGS
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Three companies approved to sell small group health policies on MNsure
Blue Cross Blue Shield
Medica
Preferred One
63 products at all metal levels
All products must meet new insurance rules
Essential Health Benefits
Rules on annual/lifetime limits
Definition of dependents
Mix of broad and narrower networks
In 2014, small group health
rates inside and outside
can only use:
an individual or family
geographic area
age (but by no more
than a 3:1 ratio), and
tobacco use (but by no
more than a 1.5:1 ratio).
In region 8 (metro area), a
business with five employees
can buy:
Bronze from $507 to
$1,014
Silver from $594 to $1,187
Gold from $702 to $1,403
Platinum from $894 to
$1,788

MNSURE: COSTS
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MNSURE: TAX CREDIT
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Only available in MNsure
Small employers that provide healthcare coverage are eligible (a qualified
employer) if:
They have fewer than 25 full-time equivalent employees (FTEs) for the
tax year
The average annual wages paid are less than $50,000 per FTE
The employer pays at least 50% of the premium cost under a qualified
arrangement
For more information on the tax credit, go to this link
http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-
Employers
MNSURE: ENROLLMENT
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Because small employers do not have to offer
coverage, they can:
Enroll starting October 1, 2013 for coverage starting
as soon as January 1, 2014
Enroll and begin coverage any time after January 1,
2014
If you plan to use MNsure, you must offer coverage to
all of your full-time employees

MNSURE: PARTICIPATION
REQUIREMENTS
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Current MN law only requires guaranteed issue for small
employers if the small employer:
contributes at least 50 percent toward the cost of coverage
for each eligible employee;
AND at least 75 percent of the eligible employees who have
not waived coverage participate in the plan.
MNsure will waive both requirements for employers purchasing
November 15 to December 15, 2013.
PROJECTED IMPACT
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MNsure commissioned study by Gruber-Gorman to
model out impact of ACA on MN. Some relevant
findings:
Increased premiums for a healthier groups and decrease
premiums for the less healthy groups
Overall premium impact flat
150,000 projected small employers enrolled in MNsure
DECISION POINTS FOR SMALL
BUSINESSES
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No requirement to offer health insurance but there are
some incentives.
MNsure offers more options and possible bargaining power
Premium tax credits available through MNsure.
Employee demand
Some workers better off with a premium tax credit if they go through the
exchange
Other workers not eligible for large exchange tax credits will take
coverage offered through work
AFTER THE ACA, WHAT NEXT?
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FROM HEALTH CARE TO HEALTH
Economic and social conditions
influence the health of people and
communities .
Factors related to health outcomes
include:
Early childhood development
Education
Employment status
Type of work
Food security
Access to health services and quality of those
services
Housing status
Income
Discrimination and social support

Minnesota
Your ZIP Code May Be More
Important to Your Health Than
Your Genetic Code

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SUMMARY
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Small Employers have many options
Employer Mandate does not apply
One option is MNsure which offers:
3 carriers with various products
Defined contribution options
Aggregated billing
Access to Agents and Brokers
Access to Tax Credits
Potential aggregated buying power
Next? From Health Care to Health

RESOURCES
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www.mnsure.org , www.mnsure.com or 855-3-MNSURE, or 855-
366-7873- for information on Mnsure
Agents or Brokers
In-Person assisters (check MNsure for up to date locations and
names)
Small Business Minnesota
www.healthreform.gov- for information on the ACA generally