Understanding the Mississippi Insurance Department and Health Insurance Exchanges

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The Mississippi Insurance Department plays a vital role in overseeing insurance regulations, and Health Insurance Exchanges provide a marketplace for major medical insurance in a similar fashion to online travel booking platforms. While details about the Exchange are still emerging, the Affordable Care Act sets the groundwork for states to establish American Health Benefit Exchanges offering different coverage levels, subsidies, and mandating individual health insurance coverage.

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Mississippi Insurance Department P.O. Box 79 Jackson, Mississippi 39205-0079

What is an Exchange? Essentially, an Exchange is a marketplace for major medical insurance. A one-stop shop for health insurance -- similar to Travelocity, Expedia, and Priceline. This is perhaps an underestimate in that the Exchange: Will be a massive undertaking Will affect millions of Americans Will provide many services beyond simply offering different insurance products for sale. 2

What Do We Know About the Exchange? Unfortunately, not much at this point. The details are in the regulations, and most of the thousands of pages of expected regulations are not out yet. 3

We Are Not Completely In The Dark The Affordable Care Act provides us with a foundation. We know that: By January 1, 2014, each state shall establish an American Health Benefit Exchange to sell individual and small group major medical policies. By January 1, 2013, the Secretary of Health & Human Services (HHS) will determine whether each state will have an effective mechanism in place to run an Exchange by January 1, 2014, and if not, then the Federal government will step in to run the Exchange for the state. Only qualified health plans offering essential benefits and certified by the Exchange may be offered through the Exchange. 4

Four Levels of Coverage Will Be Available Bronze covers 60% of actuarial value of benefits Silver covers 70% of actuarial value of benefits Gold covers 80% of actuarial value of benefits Platinum covers 90% of actuarial value of benefits 5

Subsidies and Tax Credits Subsidies will be available through the Exchange for individual taxpayers whose household income falls between 100% and 400% of the Federal Poverty Level (FPL). 400% of FPL is approximately $88,000. Therefore, a large portion of Mississippians will be eligible for some level of federal subsidy. This subsidy will equal the difference between a percentage of household income and the second lowest cost silver level plan available through the Exchange. These subsidies will be paid by the Federal government directly to the insurer and will only be available through the Exchange. 6

Individual Mandate In 2014, unless exempt, all individuals must maintain minimum essential coverage or pay a tax penalty. This tax penalty starts out at $95 per year for each covered family member, and eventually increases to $695 per year for each covered family member for 2016 and beyond. 7

Establishment of the Exchange The Exchange should be established as a not-for- profit corporation, created to effectuate the public purposes of the Act but with a legal existence separate from that of the State of Mississippi. 8

Regulatory Authority The Mississippi Insurance Department should have regulatory authority over the Exchange and the authority to promulgate regulations necessary for the implementation and operation of the Exchange in accordance with this Act and any other State and/or Federal law. The Mississippi Insurance Department should have the authority to enforce any State and/or Federal laws concerning the Exchange. Further, the Mississippi Insurance Department should have the authority to investigate the affairs of the Exchange, examine the properties and records of the Exchange, and require the Exchange to provide periodic reporting to the Mississippi Insurance Department. 9

Duties of the Exchange Implement procedures for the certification, recertification and decertification of health benefit plans as qualified health plans; Provide for the operation of a toll-free telephone hotline to respond to requests for assistance; Provide for enrollment periods; Maintain an Internet website through which enrollees and prospective enrollees of qualified health plans may obtain standardized comparative information on such plans and enroll in such plans; Assign a rating to each qualified health plan offered through the Exchange and determine each qualified health plan s level of coverage; 10

Duties of the Exchange Use a standardized format for presenting health benefit options in the Exchange; Inform individuals of eligibility requirements for the Medicaid program under title XIX of the Social Security Act, the Children s Health Insurance Program (CHIP) under title XXI of the Social Security Act or any applicable State or local public program and if through screening of the application by the Exchange, the Exchange determines that any individual is eligible for such program, shall refer that individual to that program so that he or she may be enrolled in said program; 11

Duties of the Exchange Facilitate the purchase and sale of qualified health plans; Establish a Small Employer Exchange through which qualified employers may access coverage for their employees, which shall enable any qualified employer to specify a level of coverage so that any of its employees may enroll in any qualified health plan offered through the Small Employer Exchange at the specified level of coverage; 12

Duties of the Exchange Establish and make available by electronic means a calculator to determine the actual cost of coverage after application of any premium tax credit under section 36B of the Internal Revenue Code of 1986 and any State or Federal cost-sharing reduction; Review the rate of premium growth within the Exchange and outside the Exchange; Determine and process any Federal or State tax credits or other premium support payments for health insurance, as may be established by law; Create advisory committees to the Board consisting of stakeholders relevant to carrying out the activities required under this Act; 13

Duties of the Exchange Meet the following financial requirements: Keep an accurate accounting of all activities, receipts and expenditures and annually submit to the Governor, the Department and the Legislature a report concerning such accountings; In carrying out its activities under this Act, not use any funds intended for the administrative and operational expenses of the Exchange for staff retreats, promotional giveaways, excessive executive compensation or promotion of federal or State legislative and regulatory modifications. Meet the requirements of this Act and fully comply with any and all requirements set by State statutory and regulatory law. 14

Duties of the Exchange: Navigators Select entities qualified to serve as Navigators in accordance with State law and/or Department regulation and enable Navigators to: Conduct public education activities to raise awareness of the availability of qualified health plans; Distribute fair and impartial information concerning enrollment in qualified health plans, and the availability of premium tax credits under section 36B of the Internal Revenue Code of 1986 and any cost-sharing reductions; Facilitate enrollment in qualified health plans; however, no person shall receive any form of compensation as consideration for the facilitation of enrollment of any person in a qualified health plan through the Exchange unless that person is an insurance agent that is duly licensed by the Department pursuant to Mississippi Code Annotated 83-17-75; 15

Duties of the Exchange: Navigators Provide referrals to duly licensed insurance agents to facilitate enrollment in qualified health plans; Provide referrals to any applicable office of health insurance consumer assistance or health insurance ombudsman or any other appropriate State agency or agencies, for any enrollee with a grievance, complaint or question regarding their health benefit plan, coverage or a determination under that plan or coverage; and Provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange. 16

Funding The Exchange must be self-sustaining by January 1, 2015. The Exchange may charge assessments or user fees to health carriers or otherwise to generate funding necessary to support its operations. 17