Metallic Tiers ACAAs we get closer and closer to the full implementation of PPACA (by the way, that is in January, 2014), more and more changes in health insurance and health care will be forthcoming.  One universal change is that most Americans will be required to get health insurance.  The health insurance plans will be based on metallic coverage levels.  All plans, including the ones people are on currently, will be converted to one of the following four metallic tiers – Bronze, Silver, Gold, and Platinum plans.

The difference among these metallic tiers is based around the plans “actuarial” value.  Actuarial value is defined as the amount a plan will cover before the insured must reach into their own pocket to pay for co-insurance, deductibles and co-payments.  PPACA sets the structure and the plans offered by the insurance carriers will fit within one of the tiers:

Bronze – plans typically see as having the most cost sharing on behalf of individuals including high deductibles, co-pays and co-insurance.  These plans are set at an actuarial value of 60%

Silver – A high deductible that falls in the $2,000 individual and $4,000 family structure with an actuarial value of 70%

Gold – A co-pay plus deductible plan seen with a $500 deductible based HMO plan falls into the 80% actuarial range.

Platinum – plans that represent the lowest co-pays and extensive first dollar coverage.  Benefits similar to that of a $20 Co-pay HMO plan and represent an actuarial value of 90%.

All metallic tiered plans will have a +/- 2% swing in actuarial value depending on deductible and maximum out-of-pocket limits imposed.

The Metallic Tiers will incorporate essential health benefits as defined the US Department of Health and Human Services.  These benefits include Ambulatory, Emergency Services, Hospitalization, Maternity and newborn care, Mental Health and Substance abuse, Prescription Drug, Rehabilitative and habitative services, lab services, preventative and wellness services, and pediatric services including Dental and vision care.  There are particular cost sharing requirements such as maximum out-of-pocket expenses and maximum allowed deductibles ($2,000 individual and $4,000 family) that must be satisfied as part of the plans as well.

In a nutshell, a Silver Plan enrollee would pay approximately 30% of their health care cost as the plan would cover approximately 70% of the plan costs. Most Americans will be required to get at least a bronze-level plan, unless claiming an exemption for religious or hardship reasons or face penalties.

One additional kicker, all states must pay for the cost of state-mandated benefits in qualified health plans that are in excess of the essential health benefits built into the metallic tier plans.  States such as Massachusetts, which is a notoriously generous state in terms of benefit mandates (to the tune of 11-14% of your premium dollars going to Massachusetts Insurance Mandates); will have to prepare to fund the costs of the mandate benefits.

As your health insurance plan renewal comes up in early 2014 and beyond, you will see a slew of changes from the requirements of the census form required to quote your business, to determination of the metallic tier your current plan falls into and the changes required to meet the 10 essential health benefits.

More than ever, it is crucial to work closely with Spring on everything PPACA.  The myriad of changes and complexities of PPACA need the attention and experience to properly position you and your company as 2014 draws near.

 The information contained in this notice is general in nature and is not offered as legal advice

Image Credit: Mark Herpel via flickr

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Teri Weber

Teri Weber

Partner at Spring Consulting Group, LLC
Teri Weber, ACI is a Senior Vice President with Spring Consulting Group. She has over 10 years of experience in health and welfare plan strategy, design, pricing, and implementation. She also works with absence management programs, including disability, family medical leave and leave of absence tracking. Her areas of expertise have allowed her to work with diverse employers and vendors to streamline processes and programs to meet the needs of insurers, administrators, employers and employees. Teri is on the Board for the New England Employee Benefits Council (NEEBC) and recently served as lead editor for the Disability Management Employer Coalition’s (DMEC) Return to Work Program Manual. Prior to joining Spring, Teri worked with Watson Wyatt, Buck Consultants and AON Consulting. In addition she was an Account Manager with Health Direct, Inc. Teri earned a BS at the University of Connecticut and a MBA at the University of Massachusetts. She holds an ACI designation and is a licensed broker in the states of MA and CT.