plans. the other thing about coverage plans that need to confront to metallic tiers is to get a quick gauge on how much coverage they will get by buying these plans. these are platinum, gold, silver plans and and bronze where people pay less but pay more. i will explain some of the numbers around that. the rational is that there is so many different plans out this. it's hard to see whether there is a $25 co-pay represents another $25 co-pay and it pays your exposure. this is in theory a

shortcut way for plans to determine how much it will be. it covers 90 percent of cost of care. go all the way back down to bronze, it's about 6 percent which covers that cost of care and 40 percent would be born by the consumer depending on the cost per year. that's how the level is going to facilitate this choice. this next slide is all about the essential health benefits that qualified health plans must be covered in 2014. in california we have a lot of mandates and categories of coverage that were already into most health plans. in 2014 going forward, all health plans must cover these categories. you can see from these 10.

ambulatory services, that's one already covered, emergency services. the tricky one is for example no. 10, pediatric and dental. someone had to buy separate plan for vision dental. these are going to be one big plan. so, small group changes. in 2014 small group in california moves from 2-50 eligible employees to 1-50 employees. that law has changed. there is no more rate adjustment factors applied to small groups in the past. small groups, your book rate was not your book rate. you can have a

variation of 10 percent down the factor of each group. in this case, all plans that are offered small group plans are doing way with that methodology and there is one set of rates for that plan. where the rates are going to be, that is based on the residents of the employees. you can have different rates for different areas. one tricky part to this is that definition for employees now includes that you must have them on a w 2. that maybe tricky for some small businesses. the large group expands to small group employees or less. that follows the federal law. there are tax credits that encourage small

groups to pick up coverage if they don't currently offer them. for the years 2010-2013, this were some premium tax credits given to small businesses if they paid half the premiums of their cost. starting in 2014, however, those credits which increase only if you buy your small group plan includes small group option plans. that's the significant change in 2014. if you want your tax credits and you are a small business owner, that's where you have to buy your coverage and how you get your tax credit. so, that's what's happening to small groups. the most important thing for you to know is that there two exchanges. for your

constituents, in the individual change, that might fall in the options program or the exchange. i will talk about what it is and what it suspect because -- isn't because there is misunderstanding about it. california coverage, is not obamacare, it's really a separate entity that was formed in california. there is a separate governance and non-profit. what they have done is two changes one for individual and one for small employer groups. there is two separate exchanges, not one. what they have done that was a key decision point in my mind was that they standardized the health plans and the health plan benefit design that are in the exchange. the reason why

this is important as i mentioned on the metallic here, if you standardized the metallic tiers, they are still confusing to the consumer as to how do you compare one plan to the other plan a because of the co-pays out of pocket. the covered california leadership said we are going to standardize plans and lead in this business and for this plan design and therefore the only thing that changes is your premium, negotiated rates and your model whether it's a p po or some other plan design. the >> important thing to know is that standardized designs are two different exchanges. back in may of this year, covered california, about a year ago

covered california wentd to see if there is interest. 33 health plans expressed an interest in entering the exchange and made the selected 13 health plans. cchp was one of them. in this area, i will highlight the plans that serves san francisco county. the ones in bold serve san francisco county and the italicized serve the county. there is one that serves the individual and only four plans that serve the shop exchange. we are one out of the four obviously. that's why i'm standing here. i will give you an example of what happens in the shop exchange. small employer groups can pick up the

metallic tier. if an employer picks a silver tier for their employees what rates might show up. the rates vary by age and geographic area. in this case what we show the bottom lean -- line there, is region 4, for 40-year-old, the $4, for 40-year-old, the rate is $223. kaiser is $328. the average of three low price is $417. the average comparable benefits for 2013 according to covered california is $403. so you can see the covered california likes to see that by competing,

they are able to see some savings by market rates. that is a monthly rate for an individual. each individual, just for clarity, each individual has a separate rate. if there is a group between 40-45, there is a single rate. here that spouse gets one rate. the other spouse might be 59 and might get a different rate, the children get a different rates and they pull together and get a family rate. that's the federal law to make sure that each person gets charged that rate for their age bracket. that is going to be confusing for small businesses just so you know. it goes from budgeted family rates and age spans to each person gets their

own rates and it gets added together. that's on small businesses. there is news here for mechanisms for employers to put their employees in different plans in the exchange for all of their employees. each employee can pick a different health plan. so how does a small employer buy on the shop exchange? they can really buy direct during their open enrollment period. the factor is important. if they current offer coverage and every year they renewed in april of every year, then that's their open enrollment period, if no. the general market enrollment period. they can renew he is the plans

during the open enrollment period. they can consult their agents and brokers. right now thousands of brokers have signed up for training. keep in mind in the enrollment and training is in progress. a lot is not quite done yet other than though for a lot of folks, technically the open enrollment starts october 1.st. let me

talk about standardized plans for the individual. keep in mind where this platinum plan was the most robust plan. the platinum plan has no deductible. preventative care has no cost. the primary care visits is $20 co-pay. the specialist visit is $40 co-pay. that at a very high level is the richest plan design. you will notice there is an out of pocket maximum of $4,000 for an individual and $8,000 for a family. by rule, whenever you have a limit like a deductible

or an out of pocket maximum, it's per individual. that's the richest plan. $20 co-pay, maximum out of pocket is $4,000 for an individual. if you go to the right, there is deductibles and higher co-pay for a physician. if you look on the third row down, primary visits are $70 and the physician visit is at $120. the out of pocket maximum is $6350. the family out of pocket maximum is $12, 500. >> is this the same for all

providers? >> these are all plans for the exchange whether it's kaiser, health net, or us, we follow these plans. our networks are going to be different and our premiums are going to be different. i want to call out the blue shading areas are the areas that service our deductibles. for the bronze there is a deductible on the $5,000. on the silver plan there is a deductible. so, i'm going to talk a little bit more about the silver because that is the plan bylaw that if people qualify because of their income level they can qualify for lower cost sharing. who benefits from most individuals? those who don't qualify for any government programs and

don't have any employer group coverage. there are two ways that people can benefit from the individual exchange. first is the premium tax credit. they are the ones with cautionary reductions. it means they can reduce for cost sharing. for example, the pcp co-pay. they can be reduced. there is individuals that qualify for both and some that qualify for advanced premium tax credit. they can qualify for these programs only by enrolling in covered california. if they want to stay outside of the exchange, they want to benefit from these programs. it's estimated that 42 percent who

have individual coverage can benefit from these programs. in the city and county of san francisco, it's estimated that 28,000 people would benefit from this program. in order to be eligible you must be a citizen. you cannot be incarcerated and if you have and this is a little perk. if you have services through your employer but cost more than 95 percent of your adjusted growth income, you can leave this plan. that's a quirky thing here. how that came about, remember how i mentioned that each person based on their age gets rated a certain threshold?

what we've seen is the higher age bracket could out pace the income of those higher aged employees and therefore be higher than 9.5 percent of their adjusted growth income and benefit from the individual exchange because of the tax credit and it would be better to enroll because of the individual exchange. and i think everyone's heard about the individual mandate penalties. and there is a lot of talk about that. there is an individual mandate for 2014 if you can't prove that you had credible health care or an individual policy you are subject to a 1 percent or 95 which is greater. that goes up to 2.5 or $695 which is greater

on 2016. on the face of it, it doesn't look like a severe of a penalty. what we tell people that while $95 is not that much much, it's better to have insurance than not. you can't predict what your drug cost are going to be or whether or not you need to see a specialist. get with these plans especially if you have two of these programs to help you out. i think i spoke about the tax credit, i talked about the cost share redeductions. roughly for the tax credits, there are credits for people who earn income up to 400 percent poverty. we caution counselor and people who work with covered california pros -- prospects to not think of people as poor, but the program is to determine qualifications for these programs. for example an individual who makes up to

45,000 or a family of four, still qualifies under tax credit. that is not necessarily a poor situation. cost sharing for income of 250 percent federal poverty, that is something that only works for reducing their cost shares in the silver plans. we also want to let people know that there is a medi-cal expansion. they are raising it up to 138 percent poverty level which is about $31,000 for a family of four. i mentioned that there is the one plan that really, one flavor of plans where people can benefit the most if they are in the individual exchange. these are the silver plans. these are all sill -- silver

plans. these are at 100-150 and the next one is 150 to 200. on your left, your premium can be reduced to about $19 per month. if you are in that income bracket. your copayment for your primary care, remember on the silver plan was about $45. it's now reduced down the $3. the special visit gets reduced to $5. if you are at the higher income bracket is $45 for your primary care and $65 for your specialist. if you fall into a certain income and

fall into a bracket, you get the tact credit and lower cost sharing. only on these plans. here is an example of how the tax credit might work. this is a san mateo resident, 40 years old. if they were at the 150 percent federal poverty level, which is the 1st column, you will notice their subsidy is the color in green. they get $326 of their tax credit. if they are at the poverty level, their tax credit is $19. that gets applied to a premium for a 40-year-old. the black number is what you will see what they pay. if you are to the right and you are at 400 percent of

the poverty level you pay that. >> what if they don't have any income? >> if they filed a tax return, most likely they will end up in medi-cal. if they qualify for medi-cal. they wouldn't be looking at these programs. they would be looking at a medi-cal program. this is the calendar of where we are today. this is on the individual side. open enrollment starts in 8 days but coverage doesn't start until january 1st. the marketplace swears it will be ready in october 1st wefrment -- we are still working with them. we have counselors ready to be certified and take applications. if they m it's

that open enrollment period, they will get to apply only in special circumstances where they can enroll. the next cycle picks up next year. >> someone that doesn't have any coverage now and in and of itself open enrollment period, they have to wait until 2014? >> that's correct. >> meaning while they would be subject to a sign in >> -- fine. >> they would be subject to it for 2014. it's a one time fine. so one big thing for us, wha what was the we mentioned we focus on all the population but the chinese community which we

currently serve. the enrollment centers are not only in english and spanish. we are creating centers that have variety of languages. there are certain non-profits gearing up for this i think the city is helping san francisco to enroll in the plan whether it's medi-cal or covered california. with that, there is a lot of implications for small businesses. really a couple of things that small businesses need to think about, is what are their approach to covering they employees or not. how are they doing that today? they might need to reconsider that. plans and benefits are changing. so they need to look at what that's going to do for them. they need to look at their options and their needs depending on how large they are, how many employees they

have and what's the median income. this is a sliding scale. if you are wondering what the calculus was on all those subjects -- subsidies. on the lower income. for a lot of employer groups, they currently have with them a team of experts. they have a tax advisor, brokers and agents, health plan reps. work with them to figure out what's the best solution for your current situation because it's going to be complex. with that, it's all i have at this point. i thank you for your time. >> thank you. very informative. commissioner o'brien. >> yeah, i will start by reit rating by what the president

said. excellent information and the volume of data it's an investigate presentation. i would like to ask, could you send us a copy of that? chris, if you can follow-up with that. and secondly, a couple of questions, one is not exactly related to it but very relevant. i remember a tax credit is much more powerful than a tax deductible expense. other than to calculate what your total bill is, a credit simply is subtracted immediately out of the amount due to the irs where a deduction is not, it just lowering the gi in the first place. this is most definitely

a tax credit? >> it is a tax credit especially on the individuals side. as you apply you state what your estimated income is going to be and that puts us in the bucket and say this is what the plans are for and it gives you an event premium tax credit. if you are in a situation where you can qualify for cautionary reduction it will tell you that you can qualify with a lower plan tax care. you can choose to apply your tax credit to that plan or not. you can choose from bronze over platinum. but it is a tax credit. it's called an advanced premium tax credit which is advanced to you. when you file your tax, the next year, it will chew it up and say you over estimated on this side and that's where the, it will add or reduce baeg based on that.

>> so with advanced premium credit? >> the way it works, the way it was explained is based on how you enroll in covered california as an individual you state what your income is going to be this year and next year. it will put you into a bucket and advance you your tax credit for the premiums you are going to pay. so that will help pay your premiums tloutsdz the year. most people will choose to take it or you can wait for it and get your tax credit then. we assume most people, that's a choice. we can get it contemporaneously with your payment or you can wait to file your taxes. >> we can change that credit when we enroll? >> that's why they call it an

advanced premium tax credit. it's only in the exchange. >> so you make the correction when you file your taxes the fooling year? >> that's correct. >> kaiser has applied to knight -- to participate in this exchange program? >> yes. >> thank you. >> commissioner white? >> okay, you know this is all confusing, right? i have four questions. i'm not sure handout you -- how to start. because of the affordable act care is postponed individuals don't realize it's related to them. still october 1st is open enrollment and january 1, 2014, individuals are mandated for insurance? >> yes. there are a lot of requirements that large employer groups that needed to

meet to meet an essential value. >> okay. so do you know what the outreach is that for individuals to know that they are supposed to be shopping as of 8 days? >> yes. the 8 days is the start of the open enrollment period. actually the open enrollment is october 1st and ends march 31st. there is a lot of outreach. they sent a lot of money called navigate ors and outreach. they are working with brokers and that's why at this point there are about 13,000 brokers to advise their clients. >> the second question i