OAHU Day-at-the-Statehouse
Overview of Legislator meeting talking points
Larry Link, Chair
OAHU Legislative Committee
Dennis Recker, Immediate Past Chair
OAHU Legislative Committee
John McGough
McGough and Associates
OAHU Government Affairs Consultant
April 30, 2013
Agent/Navigator Legislation
 Thank Sponsors – H.B. 3 (Rep. Barbara Sears)
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S. B. 9 (Sen. Kevin Bacon)
H.B. 3 is the vehicle for passage – Introduced on
January 30, 2013
Passed Ohio House on March 13, 2013
Passed the Ohio Senate on April 23, 2013
House concurred with Senate amendments on
April 24, 2013
Bill now on way to Governor Kasich for his signature
Effective date 90 days after Governor’s signature
H.B. 3 – It’s Official
(130th General Assembly)
(Substitute House Bill Number 3)
AN ACT
To amend sections 1751.12, 3905.01, and 4713.62 and to enact
sections 3905.47, 3905.471, 3905.472, 3905.473, and 3905.474 of the
Revised Code to specify licensing and continuing education
requirements for insurance agents involved in selling, soliciting, or
negotiating sickness and accident insurance through a health benefit
exchange, to make changes to copayments, cost sharing, and
deductibles for health insuring corporations, and to make changes to
the law related to continuing education requirements for
cosmetologists.
Key H.B. 3 Provisions
 Establishes a training program for agents
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ODI will approve agent hours for continuing education
purposes, but will only develop the actual courses if the Feds
don’t.
Assuming Feds develop training program which they have
already said they will, then ODI will not establish any
additional training requirements for agents.
Requires an Exchange operated in Ohio to make a list
available of all agents and navigators authorized to provide
services in the Exchange. Includes “any website, software
application, or other electronic medium, or Exchangesanctioned outreach event that enables consumers to
determine eligibility for and to purchase a Qualified Health
Plan through an Exchange”.
Key H.B. 3 Provisions
 Establishes a state certification program for “insurance
navigators” to be developed by ODI.
 Navigator can: (1) conduct public education activities and raise awareness
of availability of Qualified Health Plans; (2) distribute fair and impartial
general information concerning enrollment in all QHPs and availability of
premium tax credits and cost-sharing reductions; (3) Facilitate enrollment in
QHPs, without suggesting that an individual select a particular plan;
(4) May provide information related to Medicaid eligibility.
 Navigator cannot: (1) Sell, solicit or negotiate health insurance; (2)
Provide advise concerning substantive benefits, terms or conditions of a
plan or offer advice about which plan is better or worse or suitable for a
particular individual or entity; (3) Recommend a particular plan or advise
consumers about which plan to choose; (4) Provide any information or
services related to plans or products not offered in an Exchange; (5)
Engage in any unfair method of competition or any fraudulent, deceptive, or
dishonest act or practice.
Other H.B. 3 Provisions
 Authorizes all QHPs to participate in an exchange
operated in Ohio. Note: Many consumer groups support
“active purchaser” model which would limit choice and
competition.
 Requires “in-person assisters” which includes any “nonnavigator assistance personnel” to either be a licensed
insurance agent certified to sell insurance through an
Exchange or a certified insurance navigator.
 Updates Ohio law to revise co-payment, deductible and
cost-sharing requirements to be in compliance with
PPACA.
 Please Note: S.B. 9 will likely be amended and passed in
the near future to end Ohio’s open enrollment
requirements effective 1/1/2014 due to PPACA’s
guarantee issue requirements.
Overview on Additional PPACA
Implementation Issues
 There are a number of scenarios that we have
thought about as well as a number of yet unknown
circumstances that will arise out of PPACA.
 We cannot put every situation into legislation.
 There is no appetite among many legislators to
appear to be implementing even a sliver of a piece of
PPACA.
 OAHU has done what it can in this environment.
 We are fortunate to have one of most defining
agent/broker/navigator training and certification
programs in the U. S.
 We can mention these issues to legislators, but right
now it may be left to us to adapt to the new world of
health insurance.
Example—Ohio’s 25 Hour Rule
For the Small Group Market
Scenario—Employer with 30 full-time
employees under PPACA, 70 part-time
employees that equal 35 full-time equivalents
= 65 total full-time equivalents
Group has only 30 employees eligible for
insurance under PPACA and 15 of the 70
part-time are 25 – 29 hours per week = 45
total eligible employees under Ohio law.
PPACA does not eliminate Ohio 25 hour law.
This Employer placed into small group status
(1 – 50 eligibles) must deal with two sets of
eligibility rules.
How is this done?
 Employer must test each year for FTE status in
regard to play or pay penalty under PPACA.
 Employer must establish a program to determine
which part-time employees may be eligible under
PPACA—look-back period and stability period
accounting.
 Employer must also offer coverage to those
averaging 25 hours per week—however, may
install larger employee contributions for
employees working 25-29 hours compared to 30
+ hours.
Other Situations
Perhaps in the prior situation the
employer should offer coverage to
employee and children only—Spouses
are not required to be offered coverage
under IRS rules.
Employee gets group insurance,
children of low income families may still
qualify for CHIP (Medicaid)--spouse
may be eligible for subsidized coverage
in the exchange marketplace.
Implementation Time Frame
 June 2013----Public Awareness Drive Begins
 July 2013----Agent/Broker and Navigator Training
 August 2013----Agent/Broker and Navigator Certification
 October 1, 2013----Exchange Marketplace open for enrollment
in plans with effective date of 01/01/2014
 January 1, 2014----New Premium Rating and Underwriting
Standards begin with renewals on or following this date
 March 31, 2014----Initial Open Enrollment Period for Exchange
Marketplace ends
Federal Poverty Level--2013
Number of persons in
household
100%
FPL 48 Contiguous + DC
400%
FPL 48 Contiguous + DC
1
$11,490
$45,960
2
$15,510
$62,040
3
$19,530
$78,120
4
$23,550
$94,200
5
$27,570
$110,280
6
$31,590
$126,360
Federal Poverty Level--2013
FPL %
1 person 2 person
family
family
3 person
family
4 person
family
100%
$11,490
$15,510
$19,530
$23,550
133%
$15,282
$20,628
$25,975
$31,322
150%
$17,235
$23,265
$29,295
$35,325
200%
$22,980
$31,020
$39,060
$47,100
250%
$28,725
$38,775
$48,825
$58,875
300%
$34,470
$46,530
$58,590
$70,065
350%
$40,215
$54,285
$68,355
$82,425
400%
$45,960
$62,040
$78,120
$94,200
Maximum Annual Premium Paid by those
Qualifying for Subsidy in Ind. Exch.*
FPL %
Max
1
Prem.% person
2
person
3
person
4
person
100%
133%
2.0%
2.0%
$230
$306
$310
$413
$391
$520
$471
$626
133.1%
150%
3.0%
4.0%
$459
$689
$619
$931
$780
$1,172
$940
$1,413
200%
250%
300%
6.3%
8.05%
9.5%
$1,448
$2,312
$3,275
$1,954
$3,114
$4,420
$2,461
$3,921
$5,566
$2,967
$4,728
$6,713
350%
400%
9.5%
9.5%
$3,820
$4,366
$5,157
$5,894
$6,494
$7,421
$7,830
$8,949
Premium subsidies and cost sharing reductions provide
powerful incentives for many Americans
----------------------Family of Four------------------------Annual
Household
Income %
FPL
Annual
Household
Income
Dollars
Individual
Responsibili
ty Premium
% income
Annual
Individual
Responsibili
ty Premium
$’s
100%
$23,050
2%
$ 461
133%
30,657
3%
150%
$34,575
200%
Monthly
Premium
Equivalent
Average
Annual
Premium
Cost Group
Plan ‘12
Amount of
Taxpayer
Subsidy
$ 38
$17,258
$16,797
$ 920
$ 77
$17,258
$16,338
4%
$1,383
$115
$17,258
$15,875
$46,100
6.30%
$2,904
$242
$17,258
$14,354
250%
$57,625
8.05%
$4,639
$387
$17,258
$12.619
300%
$69,150
9.50%
$6,569
$547
$17,258
$10,689
400%
$92,200
9.50%
$8,759
$730
$17,258
$ 8,499
Continue to Be a Person Bringing
Value to the Consumer
We must prepare for what is coming.
We must prepare our clients for what is
coming.
If we provide value added service we will
always have a place in the marketplace.
Opportunities abound!
Question is, “Can we get it all done in time?”
OAHU Supports House Removal of Sales Tax
Expansion to Numerous Services including
Agent Commissions
 HB 59 (Introduced version of State Biennial Budget)
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Reduced state sales from 5.5% to 5% but expanded to all services
unless specifically exempted.
Exempted insurance premiums from sales tax but applied the sales tax
when the insurer reimbursed the agent’s commission.
OAHU testified in opposition to the sales tax expansion stating: The
effect of the sales tax would have been that when the insurer remitted
the portion of the premium attributable to the agent’s commission, the
insurer would be required to pay the sales tax on the commission,
essentially taxing the commission twice, first under Ohio’s insurer
premium tax and then under the sales tax.
Ohio House removed sales tax expansion and Senate is unlikely to reinstate it.
Thank House members for removing sales tax and reinforce to
Senators the importance of keeping the sales tax language out of H.B.
59.
Budget provisions relating to Public
University and Local Government Health
Care Benefits
 This issue has been debated for last 3 State Budgets
 Gives Ohio Department of Administrative Services
broad authority to establish Best Practices that must
be included in health insurance products offered to
local government and university employees.
 Authorizes DAS to establish an Advisory Committee
– should include agent participation.
 OAHU opposed to a statewide RFP process but does
support cost-containment strategies.
 Current competitive market of self-funded and fullyinsured health insurer choices should be retained
building upon Ohio’s already competitive market.
Discussion and Questions
John McGough
McGough and Associates
(614) 221-5771
[email protected]