1. What is Avenue H?
Avenue H is an internet-based information portal. It connects consumers to vital information they need to make an informed choice and allows them to execute that choice electronically.
2. Why does Utah need a consumer-based system?
One of the cornerstones of Utah's approach to health system reform is to move our health care system toward a consumer-based system where individuals have greater control over their health, health care and health care financing. A major step in that direction is the development of a workable defined contribution system. Avenue H is a critical component in moving toward a consumer-based system. For example, in order for a defined contribution system to function efficiently, consumers need a single shopping point where they can evaluate their options and execute an informed purchasing decision. For a consumer-based market to succeed, brokers, agents, employers, and individuals must have access to reliable information to allow consumers to make side-by-side comparisons of their options.
Utah's approach to health system reform relies on the fundamental principles of personal responsibility, private markets, and competition. To promote competition in the health care system, consumers need three things: accurate and relevant information, real choice, and the opportunity to benefit from making good choices. The insurance marketplace model enhances private competition in the health care system by providing all three elements of increased competition. In addition to benefiting the consumer, the insurance marketplace model also offers relief to employers who will no longer need to bear the full burden of running a health plan for their employees.
3. Who is eligible to participate on Avenue H?
Employers in Utah with a group size of 2 to 50 employees.
4. What is a defined contribution arrangement?
Defined contribution health benefit plans are employer group health plans individually selected by an employee. In a defined contribution arrangement, rather than promising or providing a certain level of health benefit, the employer provides a predetermined level of funding that the employee then controls and uses to purchase their choice of health insurance.
5. How many carriers are participating in the defined contribution system?
The carriers that are currently participating on Avenue H are Regence BlueCross BlueShield, SelectHealth and UnitedHealthcare. We have been working with other local and national carriers, and expect to add more participating carriers by the end of 2013.
6. When should an employer apply to join Avenue H?
Employers may join Avenue H at any time of the year and will not be penalized with an off-anniversary surcharge if they join Avenue H at a time other than their regular annual renewal period. However, employers may receive a better rate offer by applying on-anniversary. The group's risk adjustment factor (RAF) or "rate-up" on Avenue H cannot be higher than the group's renewal RAF if the group applies on-anniversary, and if the current insurance plan is with an insurer that is participating on Avenue H. For example, suppose a group is covered on a small group plan outside Avenue H with an insurer who participates on Avenue H and is offered a renewal at a 25% rate up. If the Avenue H new business underwriting process rates the group at the maximum rate up of 85%, Avenue H is obligated to offer the group the 25% rate up if they apply on anniversary.
7. How does Avenue H expand choice for employees?
Avenue H puts employees — not employers — in control of health plan decisions. Employees can pick the coverage that best suits their own needs, preferences, and budget. Avenue H lets them compare plans from multiple providers, calculate their premium contribution, and apply for coverage online.
8. Do defined contribution plans available through Avenue H preserve the tax benefits of traditional employer-sponsored plans?
Yes. Health insurance plans available on Avenue H preserve the tax benefits of traditional employer-sponsored plans. Premium contributions are made with pre-tax dollars, reducing the employee's tax liability. Certain plans available on Avenue H may also allow pre-tax contributions to a health savings account (HSA) that the employee owns.
9. Can coverage be denied on Avenue H?
No. Plans available to employees on Avenue H are all guaranteed issue. Employees cannot be denied coverage for pre-existing conditions.