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  • Update on Health Insurance Exchanges

    As part of the recent Health Insurance Reform legislation establishes state-based health insurance exchanges.  The exchanges are designed to assist individuals and small businesses in purchasing health insurance and to reduce health care costs.

    There are four levels of benefits available with different out of pocket expense choices.  The  Bronze tier plans will cover at least 60 percent of costs; silver plans 70 percent; gold plans 80 percent; and finally, rich platinum plans will cover at least 90 percent of costs. Catastrophic plans will be available to individuals who are exempt from the individual mandate because no affordable plan is available to them or they are under the age of 30.. To encourage health plans to participate fully in the exchange, each plan that wants to  become a qualified health plan must offer at least one plan in both the silver and gold benefit tiers.

    While the federal Department of Health and Human Services (HHS) must provide guidance on how exchanges will be established, each state that chooses to institute an exchange must create two different exchanges that must  be operational by Jan. 1, 2014. The American Health Benefit Exchange will serve individuals, including those receiving premium reduction and cost-sharing subsidies. Small businesses will be able to purchase coverage through Small Business Health Options Program (SHOP) exchanges. Initially, only firms with up to 50 employees will be eligible to purchase coverage through SHOP exchanges. Beginning in 2016, they will be expanded to allow larger employers with up to 100 employees to participate. In parts of the country with separate and distinct insurance markets, states will be allowed to form geographically distinct sub-exchanges, or even partner with neighboring states to structure regional exchanges. States have also been granted the authority to merge their individual and small-group markets to enhance the size and strength of their risk pools.

    An option that may is available to groups with 50-450 employees are Health Insurance Cooperatives.  Cooperatives are plans that are run by the member groups, with the claims paid by funds held by the member group.  Any funds left will be retained by the member group, instead of the carriers or government.  Wellness features and cost controls are included in coverage.  For more information on our Cooperative please call our office at (888) 474-6627.