Legislative Report 9/12/2013 - Navigating the New Vermont Health Insurance Marketplace

Vermont will embark on a new era in health care on October 1, 2013, as the health insurance marketplace, called Vermont Health Connect, opens for enrollment.  Vermont is one of several states that set up its own marketplace under the Affordable Care Act (ACA), a.k.a. “Obamacare”.   Vermont Health Connect is designed to make it easier for eligible Vermonters to have access to and choose the level of coverage and cost for their health insurance as well as provide Vermonters access to federal subsidies based on their income level.  Only insurance purchased through Vermont Health Connect is eligible for federal subsidies that can lower premiums, and for many, out-of-pocket expenses.  The Vermont Health Connect website, www.VermontHealthConnect.gov, already has detailed information available.  As implemented in Vermont, Vermont Health Connect will be used by Vermonters purchasing individual or family plans and employers and employees of small businesses.  It is easiest to address these categories separately for clarity. 

Coverage for Individuals and Families

So, who is eligible to participate?  Simply put, any Vermonter who does not have insurance through their employer or through a government program like Medicare, Medicaid, Veterans Administration benefits, or Dr. Dynasaur for children, is eligible.  Even if an employer offers health insurance, but the premiums cost more than 9.5% of the employee’s household income, the employee is eligible to purchase insurance through Vermont Health Connect and receive federal subsidies.  The open enrollment period starts on October 1, 2013, and ends on March 31, 2014.  After the open enrollment period, only “life changes”, such as marriage, loss of job, change in family size, etc., will be acceptable reasons to initiate or change insurance options.

Vermont Health Connect offers a list of approved health insurance options that provide standardized health care coverage at various levels of cost.  The standard plans have four benefit levels:

·         Bronze – 50% payment of covered medical expenses

·         Silver – 60% payment of covered medical expenses

·         Gold – 80% payment of covered medical expenses

·         Platinum – 90% payment of covered medical expenses.

Each level has different deductible and maximum out-of-pocket amounts.  Insurance premiums will vary by insurance provider, amount of deductibles and co-pays, benefit level, and amount of subsidy an individual or family is eligible for.  There are two insurance providers for Vermont, Blue Cross Blue Shield of Vermont and MVP, each of whom offers the same coverage in the standard plans.  In addition to the four standard plans, there are non-standard plans offered by BCBS and MVP as well.  Catastrophic health plans are also available to individuals under 30 years old who meet certain income eligibility standards.

Federal subsidies for the premiums are based on household income and are paid directly to the provider to offset the premiums.  While the estimated subsidy for 2014 is based on the household income shown in the 2012 tax return filed this year, the subsidy will be adjusted when the 2013 tax return is filed; so, those who have had a major change in income can potentially see a change in the amount of the subsidy they are eligible for.  Adjustments for changes in a household’s financial circumstances can be made on a monthly basis.

Besides the health insurance plans, Vermont Health Connect also provides access to dental plans through Delta Dental for both adults, as a supplemental plan, and children, as dental is embedded in all medical plans for those up to 21.  Catastrophic dental care is integrated with the health insurance plans through BCBS and MVP. 

There is help every step of the way for individuals to learn more now and to enroll after October 1st:

  • Online – www.VermontHealthConnect.gov
  • Phone – 1-855-899-9600 (toll-free)
  • In-person – Use our website or call center to find a Navigator near you.  (Navigators are trained partner organizations or individuals who can guide you through the process.  A list can be found under the tab “Assisters & Partners” at the website.)

Starting in 2014, there is a federal penalty for not carrying health insurance. The penalty will be assessed on tax returns starting in 2014 and increasing each year through 2016.  For 2014 the penalty is the larger of 1% of household income or $95 per individual household member without coverage up to a maximum of $285. 

Small Business Participation

Small businesses, with 50 or fewer full-time employees will offer health insurance through Vermont Health Connect starting in 2014. There is no federal penalty for small businesses that do not offer health insurance to their employees.  Businesses will select a contribution level and the plans available to their employees (either all plans under one carrier or the full range of options).  The employee would then enroll in the plan of their choice through Vermont Health Connect.  If the employer offers health insurance to its employees, however, the employee would not be eligible for a federal insurance subsidy unless the cost to the employee exceeded 9.5% of the employee’s household income. 

Employers are eligible for federal tax credits if
  • they have fewer than 25 full-time-equivalent employees (FTEs),
  • the average annual wage per FTE is less than $50,000, and
  • they contribute at least 50% of the health insurance premium per FTE. 
While there is no federal penalty for small employers that do not offer health insurance, the Vermont Employer Assessment remains.  This Vermont penalty is $40/month/employee for the 5th through the 49th employee.  (The first 4 employees are exempt.)  Therefore, each employer should analyze the effect on both their business bottom line and their employees before making a decision on whether or not to offer health insurance. The Small Employer Estimator, available now on www.VermontHealthConnect.gov, is designed to help employers with health coverage decision-making for 2014.
Employers who choose to enroll must select their coverage options by October 1st; employees should then enroll by November 30th.  Additional tools and resources are available specifically for small businesses and can be accessed at www.VermontHealthConnect.gov or by calling 1-855-499-9800 (toll-free).