Profiles in Coverage: Oklahoma Employer/Employee Partnership for Insurance Coverage (O-EPIC) Program
On September 30, 2005, Oklahoma received approval from the federal Centers for Medicare and Medicaid Services (CMS) for the state's Premium Assistance program called the Oklahoma Employer/Employee Partnership for Insurance Coverage (O-EPIC). O-EPIC is intended to provide premium assistance for health insurance coverage targeting some 50,000 low wage working adults in Oklahoma. O-EPIC is funded by state general fund revenues generated by a tobacco tax, along with federal matching funds under Title XIX and employer and employee contributions.
O-EPIC premium assistance has two different strategies for covering low wage workers. The Employer Sponsored Insurance program helps low wage workers at small firms purchase qualified insurance offered by their employer. The Individual Plan will help qualified individuals get health insurance coverage even if they are not able to get coverage through their employer.
O-EPIC began enrollment in the Employer Sponsored Insurance program in November 2005 and will soon begin enrollment in the Individual Plan. SCI interviewed Matt Lucas, Director of the O-EPIC program, on how it functions and its experience during the first year of operation.
• Please describe the O-EPIC program.
The O-EPIC program is designed to assist Oklahoma 's lower income, working adults obtain health care coverage. The program is divided into two components, Employer Sponsored Insurance (O-EPIC ESI) and Individual Plan (O-EPIC IP).
The Employer Sponsored Insurance program helps qualified employees at small businesses to purchase health insurance coverage through their employer. The business must have 50 or fewer employees. (In June 2006, Governor Henry signed HB 2842. A section of this bill allows the O-EPIC program to expand from businesses with 25 or fewer employees to businesses with 50 or fewer employees. This change took effect in October 2006). The employer works with an insurance agent to choose a qualified health plan to offer its employees. Qualified health plans are commercially available plans in the Oklahoma market that meet a minimum standard. The Employer Sponsored Insurance program pays 60 percent of the health insurance premium for qualified employees with incomes no greater than 185 percent of federal poverty level (FPL) and 85 percent of the premium for the qualified enrollee spouse's premium. The subsidy is paid prospectively to the employer at the beginning of each month.
The Individual Plan will be launched in January 2007, and is designed as a health plan for qualified individuals with incomes no greater than 185 percent FPL and who are ineligible to participate in O-EPIC Employer Sponsored Insurance. The Individual Plan will include:
- Self-employed individuals not eligible for small group health coverage;
- Workers at small businesses who are either not eligible to participate in their employer's health plan or whose employer does not offer a Qualified Health Plan; and
- Unemployed individuals who are currently seeking work.
The Individual Plan also provides coverage to working individuals with a disability who meet the Ticket-to-Work program requirements and have incomes above the Medicaid level, but no greater than 200 percent FPL.
• Why did Oklahoma move forward on this project? What was the rationale behind the development of the Partnership?
The Oklahoma Legislature recognized that many Oklahomans did not have health care coverage and that many small businesses could not afford to provide health care benefits to their employees. At the same time, through a series of Health Resources and Services Administration (HRSA) State Planning Grants, Oklahoma was able to study the uninsured in depth and work with a diverse planning group to develop coverage options. Throughout the planning process, emphasis was placed on promoting personal responsibility for health care and appropriate utilization of health benefits through the use of public-private cost sharing. Moving individuals into commercially available health plans would both educate previously uninsured individuals about the benefits of health coverage and illustrate to business owners the importance of providing health benefits.
• How was the state able to fund the program?
The Legislature directed the Medicaid agency to apply for federal waiver authority to extend coverage to working adults at small businesses in order to purchase either private health coverage or state sponsored health coverage through a premium assistance plan. Waiver authority was approved in September 2005. Oklahoma 's Governor Henry spearheaded an initiative to generate the state matching funds for the program through an increase in the tax on tobacco products sold in the state. This referendum was passed by Oklahoma voters in November of 2004. The Office of State Finance estimated $50,000,000 would be available to fund the state share of the program. Oklahoma receives approximately $2 in federal matching funds for each $1 in state funds. Annual funding for the program was estimated at $150,000,000.
• Who is eligible to enroll in O-EPIC?
To be considered for O-EPIC Employer Sponsored Insurance, an individual must meet the following criteria:
- Is a U.S. citizen or qualified alien;
- Is age 19 to 64;
- Has family income no greater than 185 percent FPL;
- Works for a business with 50 or fewer employees;
- Contributes up to 15 percent of premiums;
- Is enrolled in an O-EPIC qualified health plan;
- Is a resident of Oklahoma ; and
- Is not enrolled in Medicare or Medicaid.
O-EPIC Individual Plan will be available for individuals meeting these requirements, and who also are self-employed, work for small employers but are ineligible for employer sponsored insurance or whose employer does not offer qualified employer sponsored insurance; or are unemployed individuals seeking work. The spouse of an eligible employee may also enroll in either O-EPIC Employer Sponsored Insurance or the Individual Plan. Dependent children in the family would qualify for the state's SCHIP program.
The Employer Sponsored Insurance program does not have any crowd-out provisions. If the eligible employee is currently enrolled with a qualified health plan, they are not required to drop coverage to receive premium assistance.
The Individual Plan does have a crowd-out provision. The employer must not have dropped coverage within the previous six months. There are no crowd-out requirements for individuals
• What are the requirements for an employer to participate in O-EPIC? Are there any crowd-out provisions to ensure that employers are not dropping coverage to enroll in the program? How do employers apply?
The requirements for an employer to participate in O-EPIC Employer Sponsored Insurance are as follows:
- Have 50 or fewer employees;
- Be located in Oklahoma ;
- Offer an O-EPIC qualified health plan; and
- Contribute a minimum of 25 percent of eligible employee-only premium costs.
The Employer Sponsored Insurance program was designed to not penalize employers currently offering employee health insurance and does not have a crowd-out requirement. The Individual Plan on the other hand does have a crowd-out provision in that employers cannot have dropped their insurance in the past six months in order to have their employees qualify for the Individual Plan.
Employers may begin the application on-line. Completed applications along with supporting documents must be mailed for final approval. Businesses may contact their local insurance agent and ask for assistance with the process.
• If an employer wants to purchase coverage through the program, and has both low-and high-income workers, can they all enroll? Is there a price-difference in the premiums for the worker?
The Employer Sponsored Insurance program is more of a funding mechanism than a health plan. The employer contracts with a commercial carrier and must abide by the carrier's rules and the laws governing small group insurance. The employer will receive premium assistance only for those employees who meet the income requirements as well as other eligibility requirements. Employees with family incomes above the eligibility threshold would still be able to enroll in their employer's health plan, but would not be eligible for a subsidy. There would be no difference in coverage for higher income employees.
The Individual Plan is available as an option for eligible individuals whose employers do not offer insurance.
• Does O-EPIC stipulate a minimum benefit package or cost sharing limits in order for low wage workers to be eligible for premium assistance? Does O-EPIC provide a wrap-around for insufficient coverage plans?
O-EPIC does stipulate a minimum benefit package that employers must offer. There are hundreds of health plan combinations available through many different carriers. The minimum requirements for a health plan to become qualified are:
- Must cover hospital, physician, lab, x-ray, and pharmacy services.
- Must be approved by the Oklahoma Insurance Department.
- May not exceed a $3000 out of pocket maximum.
- May not exceed a $50 office visit co-pay maximum.
- May not exceed a $500 pharmacy annual deductible maximum.
O-EPIC does not currently provide a wrap-around for limited coverage plans.
• Are there coverage options available for individuals whose employers do not want to participate in O-EPIC or those that are self-employed? What about unemployed or those seeking work.
The Individual Plan will be available for individuals whose employers do not want to participate or those that are self-employed. It will also cover those who are unemployed seeking employment and those who are working with a disability. This plan will include co-pays, and premiums are based on a sliding scale of income. The benefit package for the Individual Plan is limited.
• Are higher-income working individuals who do not qualify for this program able to purchase O-EPIC at full price (without a Medicaid subsidy)?
Higher-income working individuals cannot buy in to the Individual Plan and are not eligible for a subsidy under the Employer Sponsored Insurance program.
• O-EPIC was created under a HIFA waiver to Oklahoma 's Medicaid program. How is the eligibility criteria and process different than under the traditional Medicaid program?
Traditional Medicaid recipients must apply for benefits at their local Department of Human Services (DHS) office. They are interviewed face to face with a DHS worker who enters their information into the system. Applicants are certified for a twelve month period.
Applications and enrollment for O-EPIC are only available on-line. When an individual applies, they declare their income and family size. They are either denied or approved for up to twelve months based upon this declaration. The approved applications are subsequently cross-checked with the Oklahoma Employment Security Commission to verify employment income. Self-employed individuals submit additional documentation such as tax returns for review. A random audit is performed on all applications. Those applicants chosen for audit are manually reviewed and cross-checked with the Oklahoma Tax Commission as well as other offices such as Child Support Enforcement and Social Security.
• Can an individual in the O-EPIC Individual Plan move to the Employer Sponsored Insurance program if their employment status changes?
Individuals are required to move into Employer Sponsored Insurance if it is available to them at the end of their eligibility period for the Individual Plan. They may end their current eligibility at any time and apply for Employer Sponsored Insurance if their employment status changes.
• Is there an outreach or marketing plan? Are there different outreach strategies for employers, employees, or other groups?
There are many different marketing plans and outreach strategies for various groups.
Marketing strategies include mailings, presentations, brown bag luncheons, continuing education classes and meetings.
Which group (employers, employees or agents) we are reaching out to determines what strategy we use. For example, if we are marketing toward the employers, we may describe how O-EPIC can help them purchase insurance for their eligible employees and can save their employees at least 60 percent on their health insurance premiums. By offering health insurance, they are more likely to retain good employees.
• Employer participation is a critical part of the program and its financing. What outreach to employers has Oklahoma conducted? Are brokers or agents being used to market the new product?
Oklahoma has attempted to reach employers by mailing out educational material and by holding O-EPIC presentations at Chambers of Commerce in various communities.
The Health Care Authority has also developed a comprehensive Web site - www.oepic.ok.gov - for the O-EPIC program that provides a wealth of information for individuals and employers.
Agents are being used heavily to market this new product. The Oklahoma Insurance Department has created a listing of insurance agents who know about the O-EPIC program. These agents have received continuing education on the O-EPIC program and are happy to assist small businesses in purchasing health insurance.
• What is the current enrollment in the program (number of businesses and/or covered lives)? What do you anticipate the enrollment to be at the end of 2006 and in the long term?
As of October 25, 2006, 645 businesses were enrolled in Employer Sponsored Insurance, which represented 1,200 individuals. At the end of 2006 we anticipate the enrollment to be more than 1,500 individuals.
We have not begun enrollment in the Individual Program. We are in the final stages of testing the system and waiting for approval of our rules.
The goal for overall enrollment is O-EPIC is 50,000 individuals, 25,000 in the Employer Sponsored Insurance program and 25,000 in the Individual Plan.
• How does the O-EPIC Individual Plan differ from what is available in the individual market?
The Individual Plan will provide a limited benefit plan compared to other commercially available products. There will be no pre-existing exclusions for the Individual Plan, as there may be in the products available through the individual market. Finally, premiums for the Individual Plan will be paid on a sliding scale basis, making it a more affordable product than what is otherwise available through the individual market.
• What advice do you have for policy makers in other states considering a similar program?
Bring stakeholders to the table and be flexible and willing to change. There is no way that we could have thought of all of the issues that might come up in implementation. Early along, we recognized that insurance agents and brokers would be critical to reaching small employers and that has turned out to be true. We invested a lot of time in working with these important stakeholders to get their input on program design and to educate them about the new program.
Enrollment has taken time to build and that is both good and bad. We would like to have provided insurance coverage to more individuals sooner, but the slow enrollment growth allowed us to work through some of the early operational problems.
The initial support of the legislature was essential to creating O-EPIC, but also important throughout implementation. Because O-EPIC Employer Sponsored Insurance is dependent upon commercial insurance products for small businesses we worked closely with the Department of Insurance, which proved to be invaluable in getting O-EPIC up and running.
