District's Health Benefit Exchange (HBX)
Q. What are health benefit or insurance exchanges?
- Health Insurance Exchanges were created by the Affordable Care Act to help individuals and small businesses buy health insurance coverage they can afford. A health benefit exchange is a “one-stop shop” where people can compare and buy health insurance plans. The federal law allows for separate exchanges for small businesses – called Small Business Health Options Program also known as SHOP – and for individuals. The District plans to operate one health benefit exchange for both groups. Individuals and families can use the same application to apply for either Exchange coverage or Medicaid coverage. The District’s Health Benefit Exchange is scheduled to launch for enrollment on October 1, 2013.
- All states must have Health Insurance Exchanges, but states have several options. A state may set up its own exchange or join with other states to create a regional exchange. Another option is to let the Federal government establish and run an exchange for a state. The District opted to set up its own, the District of Columbia Health Benefit Exchange.
- State exchanges will be different. Some states will be more active in deciding which health plans can participate in the exchange. Some states may not let employees or agents of health insurance companies be involved in the exchange. Some states may choose to have their own exchange or they may work with the federal government or other states on a joint exchange.
A. The District has been awarded over $82 million in grants from the federal government to help plan for and set up a health benefit exchange for the District. The District government has spoken with District residents and done other research on the best ways to set up the District’s Health Benefit Exchange. More information on the District’s Health Benefit Exchange can be found on www.dchbx.com. The District will be ready for District residents and small businesses to sign up for health insurance through the HBX staring October 1, 2013.
Q. Who will participate in the District’s Exchange?
A. On October 1, 2013, when the Health Benefit Exchange opens, it will only be open to individuals buying their own coverage and to the employees of D.C. small businesses (those with 1-50 employees) and their family members. In addition, individuals and families will be able to access Medicaid through the Exchange. Undocumented immigrants will not be able to buy health insurance from the District’s Exchange.
Q. What will the health plans sold on the District's Health Benefit Exchange look like?
A. Plans participating in the District’s Exchange will have to offer a set of minimum benefits. These benefits are expected to include hospital, emergency, maternity, pediatric, drug, lab services and other care. Plans will be divided into four different types, based on the amount of costs that consumers are required to pay out of pocket: bronze, silver, gold, and platinum.
Q. What is the essential health benefits package?
A. The essential health benefits package is a set of health care service categories that must be covered by certain health plans starting in 2014. The federal Affordable Care Act ensures health plans offered in the individual and small group markets, both inside and outside of the Exchange, offer a comprehensive package of items and services, known as essential health benefits. Essential health benefits must include items and services within at least the following 10 categories:
- Ambulatory patient services;
- Emergency services;
- Maternity and newborn care;
- Mental health and substance use disorder services, including behavioral health treatment;
- Prescription drugs;
- Rehabilitative and habilitative services and devices;
- Laboratory services;
- Preventive and wellness services and chronic disease management; and
- Pediatric services, including oral and vision care.
Health insurance plans must include these benefits in order to be certified and offered in the District’s Exchange. For more information on Essential Health Benefits in the District, click here to view the bulletin released by the DC Department of Insurance, Securities and Banking.”
Q. Will exchanges be like travel websites or some existing health insurance sites?
A. In some ways, exchanges will be like familiar travel or health insurance sites. People will be able to compare plans sold by different companies. Buying health insurance can be confusing, so information on the plan benefits will be presented in the same way to make it easier to compare cost and quality.
Q. How much will health plans in the District’s Exchange cost?
A. The costs will vary by type of plan, the age of the subscribers, and tobacco use by subscribers. However, insurers won’t be able to charge more because of gender or health status.
Q. What if I can’t afford to pay the premiums?
A. District residents with a low income will qualify for Medicaid and will therefore be ineligible for assistance buying coverage on the Exchange. Starting in 2014, middle-income individuals and families may be eligible for tax credits that will lower their monthly premium costs for health coverage on the Exchange. Some of these individuals will also be eligible for reduced deductibles, co-payments, co-insurance, or other out-of-pocket expenses associated with health plans on the Exchange.
Q. Will undocumented residents have access to the Exchange?
Undocumented persons are not eligible to purchase health plans through the District’s health benefit exchange. Specifically, 42 U.S. C. §18031(d)(2)(A) states that “[a]n Exchange shall make available qualified health plans to qualified individuals and qualified employers. Section 18031(d)(2)(B)(i) states that “[a]n Exchange may not make available any health plan that is not a qualified health plan.” In terms of who is a “qualified individual,” § 18032(f)(1)(A) defines the term, with respect to an Exchange, as “an individual who (i) is seeking to enroll in a qualified health plan in the individual market offered through the Exchange; and (ii) resides in the State that established the Exchange.” Section § 18032(f)(3), which limits Exchange access to lawful residents, provides:
If an individual is not, or is not reasonably expected to be for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States, the individual shall not be treated as a qualified individual and may not be covered under a qualified health plan in the individual market that is offered through an Exchange.
As such, because the HBX is limited to offering “qualified health plans” to “qualified individuals,” and because undocumented person “shall not be treated as a qualified individual and may not be covered under a qualified health plan,” undocumented persons may not purchase health plans through the HBX.
Q. How much grant funding has the city received from the federal government to build the exchange?
A. A total of $82,186,048 has been received from the federal government in Exchange establishment grant funding.
Q. What information will be available for individuals and small business employers to compare plans in the District’s Exchange?
A. The District’s Exchange will include information so that individuals and small businesses can:
- Compare premiums;
- See quality ratings, accreditation, and customer service measures;
- Compare and evaluate provider networks; and
- See cost examples for various medical needs (pregnancy, broken arm, emergency room visits, etc.).
Q. I have been denied coverage because I have a pre-existing condition. What will the District Health Benefit Exchange do for me?
A. No individual can be denied health insurance because of a pre-existing condition in 2014. You will be able to buy health insurance in the District’s Exchange. Persons with existing medical conditions and who have been uninsured for at least six months can get coverage immediately through high risk pools also known as the Pre-Existing Condition Insurance Plan. You can call (800) 220-7898 or log-on to www.pciplan.com to learn more and to apply.
Small Business Owners
Q. Is the District closing the commercial insurance market?
A. No, the District is not shutting down the commercial insurance market. The HBX Executive Board adopted recommendations to unify commercial small group and individual plans within the District’s Exchange insurance marketplace. There are several reasons for the Board’s decision, including:
- The District is a small jurisdiction both in terms of geography and demographics and needs economies of scale to support a robust and effective HBX;
- This market structure will provide a consistent consumer experience for all small business owners and individual purchasers;
- Individuals, small business owners, agents and brokers (producers) will have access to information on all health insurance plans available in the District in one, easy to navigate portal; and
- Individuals and small business employees will be able to compare and select from a wider array of available health insurance plans.
Q. What benefits will the District’s Exchange provide to small businesses?
A. The District’s Exchange will provide transparency for selecting health coverage that does not currently exist by creating a single source to review price, quality, customer service information, and other consumer focused measures about all health plans available in the District.
Due to the selection of the largest small group plan currently available in the District as the benchmark for all health insurance plans sold in the market in 2014 (essential health benefits or EHB), small employers will be able to choose among plans similar to those currently available.
The District’s Exchange will expand the health coverage options available to small business owners and their employees. Employees will be able to select from a wider array of plans to best suit their needs, but without adding additional administrative costs or burdens on the employer.
Q. Will the HBX reduce competition in the District health insurance market?
A. No, the District’s Exchange will increase competition by creating a web portal where health insurance plans will have to transparently compete on the basis of price, quality of care, and customer service.
The only limitations on plans offered in the District’s Exchange are those mandated in the Affordable Care Act and existing District law. The Exchange Executive Board may also adopt additional QHP requirements, which will be explored with stakeholder input and participation.
Q. President Obama said that if I like my plan, I can keep it. Is this true?
A. Individuals and small businesses that have been covered by the same insurance plan since the federal health care law took effect on March 23, 2010 can keep the same plan. These plans are called “grandfathered plans.” If plans do not have significant variance from their pre-March 23, 2010 design, they are considered “grandfathered” and exempted from most ACA requirements.
Q. What businesses will be able to participate in the District’s Exchange?
A. District based small businesses with 1 to 50 employees will be eligible to participate in the District’s Exchange insurance marketplace. Beginning in 2016, businesses with up to 100 employees will be eligible to participate in the District’s Exchange.
Q. How will the roll out of the District’s Exchange occur for small businesses leading up to January 1, 2014?
A. Open enrollment for all HBX participants will begin on October 1, 2013. Small business employers will be able to choose coverage through their existing broker or benefits manager. Grandfathered plans, those in place since March 23, 2010, will be exempted from operating in the District’s Exchange insurance marketplace.
Q. What tax credits are available for small business employers who cover their employees through the District’s Exchange?
A. For tax years 2010 through 2013, the maximum credit is generally 35% of the cost of covering employees, although it is 25% for tax-exempt employers. The tax credit increases on January 1, 2014 to 50% for most employers and 35% for tax-exempt employers.
Q. What are the penalties if a small business employer does not offer coverage to employees?
A. There are no penalties for not offering coverage to employees for small businesses with 50 or fewer employees.
Q. How will small business owners select coverage for their employees through the District’s Exchange?
A. The ACA mandates that employers be allowed to select a “metal level” from which their employees can select any available plan. There will be four “metal levels” of plans available to small businesses in the HBX insurance marketplace. The metal levels are organized based on the portion of expected medical costs covered by the plan, otherwise referred to as “actuarial value” (AV). Bronze plans would have a 60% AV, silver plans a 70% AV, gold plans a 80% AV, and platinum plans a 90% AV.
Small business employers will have options for determining how to split premium costs between themselves and employers.
Producers (Insurance Agents & Brokers)
Q. Will producers be able to work with small businesses and individuals in the District’s Health Benefit Exchange?
A. Yes. Producers will be able to provide the same services to individuals and small businesses in the District’s Health Benefit Exchange as they do today. The success of the HBX, especially the small group market, will rely on the expertise and employer relationships that producers have cultivated throughout their careers.
Producers will have the ability to access the HBX to get information on available plans and to directly enroll clients in plans through the District’s Exchange.
The HBX Executive Board and Insurance Subcommittee are working with stakeholders to define exactly how producers will interact with the District’s Exchange. We encourage all producers to join our regular stakeholder meetings to discuss appointment and compensation in the Exchange. To sign up for updates, follow this link.
Q. What is the role of Navigators and will they replace producers in the District’s Exchange?
A. Navigators and producers will largely provide different functions and serve different populations in the District’s Exchange, with distinct roles for each.
As required by the Affordable Care Act (ACA), Navigators will help individuals and some small businesses understand their health insurance options in the District’s Health Benefit Exchange. Additional information on the District’s Navigator program can be found in the Operations Subcommittee Navigator recommendations here.
Under the Affordable Care Act, Navigators cannot be licensed producers and cannot be paid a commission. Navigators will be prohibited from engaging in the functions of producers- the sale, solicitation, or negotiation of health insurance plans.
The District envisions Navigators working with historically underserved groups who may not have much understanding of the commercial health insurance market to educate them so they can make informed decisions on the selection of health insurance.
Q. How will producers interact with the DC Health Benefit Exchange?
A. Producers will be able to use the District’s Exchange marketplace to assist with enrolling small businesses and their employees in coverage. Producers will have access to the District’s Exchange web portal so that they can perform their traditional functions directly in the Exchange online.
Producers will be able to:
- Compare price, quality, and network information for all small group and individual health insurance plans available in the District;
- Access validated insurance plan information;
- Sign up employers to purchase coverage through the District’s Exchange;
- Input employee information to develop quotes for small group insurance plans; and
- Facilitate the enrollment of employees and individuals into qualified health plans.
Q. How will sales made through the HBX be credited to the appropriate producer?
A. Producers will be given a unique ID number upon registering for the District’s Exchange. This unique ID number will be used by the Exchange and carriers to track activities and transactions and to assign credit for sales.
The producer will have to be logged into the system to initiate the sale process for an individual or small business. If an employer or an individual initiates the process and they have a producer they would like to continue working with, the system will provide the option for inputting a producer’s ID number for credit to be assigned.
Q. How can producers participate in District’s Exchange planning and implementation efforts?
A. The Exchange Executive Board and all District agencies implementing the Exchange encourage producers to participate in public meetings and working groups that occur no less than every other week. There are several operational issues and policies that must be formalized and finalized including producer compensation, carrier appointments, and Exchange-specific training. If you have any additional questions, submit them here. To sign up for updates, follow this link.
Q. What are Navigators?
A. Navigators, a requirement of the Affordable Care Act, are individuals and organizations that assist small businesses and individuals understand their health insurance options once the individual mandate begins in 2014. They also assist with enrollment in Qualified Health Plans through the Health Benefit Exchange.
Navigators are not the same as licensed producers and cannot be paid by commission from insurance companies, but they will be licensed by the Department of Insurance, Securities and Banking and receive compensation through a grant program run by the District’s Exchange.
The District is currently working through the HRIC Operations Subcommittee to design a Navigator Program that meets the needs of District residents, including providing support to historically underserved groups who may not have experience purchasing commercial health insurance.
Navigators will be prohibited from engaging in the functions of producers – to sell, solicit, or negotiate insurance.
Q. How do I get a contract with the District’s Health Benefit Exchange Authority?