Health Care Reform The Affordable Care Act House Keeping items.. All - - PowerPoint PPT Presentation
1 Health Care Reform The Affordable Care Act House Keeping items.. All phone lines are muted so please send any 1. questions you may have via the chat session during the webinar. All slides will be made available after the
1
1.
All phone lines are muted – so please send any questions you may have via the chat session during the webinar.
2.
All slides will be made available after the presentation at www.capitalbenefitservices.com or at www.epkbenefits.com please simply visit the Health Care Reform section of either website. Any follow up questions you may have, please feel free to send to: Will Compton at wcompton@epkbenefits.com
The “Affordable Care Act”
How did we get here?
in which the Affordable Care Act was passed? Where are we going?
What to expect in the future?
Coverage started off slowly shortly after WWII…………..Yet by 2010 – 60%
Over time……
16.3% of the population.
Health Insurance Program)
healthcare costs are the No. 1 factor hurting their operating environment,
environment "a lot" —Taxes on small businesses came in just behind, at 53%”
Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, 1999‐2012
38% 109%
172%
38% 113%
180%
11% 29% 47% 8% 24% 38%
0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Health I nsurance Premiums Workers' Contribution to Premiums Workers' Earnings Overall I nflation
23, 2010. (2,400 pages long)
many types of private health insurance – many insurance market reforms
benefits they currently offer and consider whether they are compliant
mandate to purchase and maintain minimum coverage
who should pay the bills….………Yet we seem to blow right past the logical question of why exactly the bills are so high in the first place?
want everything paid for and have arguably lost perspective on what the true costs of health care really are.
Market for over 20 years – Such as the: MBA Health Insurance Program
association plan in the state of WA.
8
Medic al Insur anc e Pr emiums by State - Small Gr
ket
Washington Avg. R ate Washington R anking High L
All small gr
1-100
$332.00
5th lowest
$565.00 $302.00 25-50 employees $330.00 4th lowest $565.00 $265.00 11-25 employees $327.00 4th lowest $577.00 $295.00
10 or less employees
$341.00
2nd lowest
$579.00 $332.00
Washington has one of the lowest average health insurance rates in the country. in part to the presence of Association Health Plans her in Washington State
9
10
up for health care coverage the health care law sets out a formula to determine your penalty, which will be assessed and collected by the IRS as part of your federal income taxes.
1) A flat dollar amount per person. Flat dollar amount for individuals: $95 in 2014; $325 in 2015; and $695 in 2016; increases indexed to inflation after that, subject to a cap. OR 2) A percentage of your taxable income fixed percentage of household income in excess of tax filing threshold equal 1% in 2014; 2% in 2015; 2.5% in 2016.
(Percentage of taxable income is capped at 300% of flat dollar amount)
11
applicable individuals and they do not have health insurance for the 2014 tax year. Their combined household income is $65,000.
$95 for Bob, and $47.50 for each child)
($65,000 X 1%)
12
Individual exemptions: Who will be exempt from the mandate?
Individuals who:
1.
Have a religious exemption,
2.
Incarcerated individuals.
3.
Cannot afford coverage based on formulas contained in the law, or have income below the federal income tax filing threshold, (2010 thresholds for taxpayers under age 65 was $9,350 and couples was $18,700)
4.
Are members of Indian tribes,
5.
Were uninsured for short coverage gaps of less than three months;
6.
Are residing outside of the United States
13
14
Who is subject to the employer mandate requirement?
An employer who has on average of 50 or more Full‐Time Employees on business days in the prior calendar year:
O Note that both Full Time and Part Time employees count toward the total O Full Time employee = Average of at least 30 hours per week or 130 hours of
service in a calendar month which is equivalent to 30 hours per week.
O An employer must aggregate hours worked by Part Time employees in a
month / 120 = number of full time equivalent employees.
O These full time equivalent employees are used to calculate if you are over or
under 50
O Exception for seasonal employees if: O Workforce exceeds 50 FT employees for 120 days or fewer in a year and
employees in excess of 50 employed in that period were seasonal workers.
15
Provide coverage Provide “minimum value” that is deemed “Affordable
50 or more Full Time Employees will be required to:
16
‐ If an applicable large employer fails to offer all FT employees (and
dependents) the opportunity to enroll in “eligible employer sponsored plan” for any month…..
‐ ……and just one FT employee is certified (by the exchange) to
employer has having enrolled in subsidized coverage for that month:
‐ Monthly penalty = $2,000 X # of FT employees minus the first 30 / 12
(calculated monthly at $166.67)
‐
Note penalties are not tax deductible
17
If an employers fails to offer “minimum essential coverage”
‐ If an applicable large employer fails to offer all full time employees
coverage that is both affordable and meet minimum requirements
‐ Monthly penalty = $3,000 X # of FT employees who apply for an
receive subsidized coverage through the exchange / 12 (calculated monthly at $250.00)
‐ Note penalties are not tax deductible
18
What is Minimum Value?
O Plan’s share of total allowed costs is at least 60%. O This is an actuarial value of the plan’s cost‐sharing
Note that new annual HRA contributions can count towards determining minimum value.
What is Affordability?
O Plan is deemed unaffordable if employee cost for self‐only coverage for the
least expensive plan is greater than 9.5% of household income for tax year.
O However note that since employer is unaware of household income in most
cases, employee W‐2 earnings can be used instead.
O An employer is only obligated to offer the chance for dependents to enroll in
coverage, not pay for the dependent coverage.
19
An employer fails to offer coverage:
Example: Company has 100 FT employees and does not offer an eligible employer‐ sponsored plan:
O If one FT employee enrolls in subsidized coverage during the year:
Annual penalty = $2,000 X (100‐30) = $140,000. Example: Company has 20 FT employees and 60 FTE equivalent employees.
O Treated as having 50 FT employees and thus subject to the rules O If one FT employee enrolls in subsidized coverage for year: O Annual penalty = $2,000 (20‐30) = $0 O Note that the FTE (full time equivalent employees do not count towards penalty)
20
Will Employers Drop Coverage or not??
O Most large employers are already covering all requirements for minimum
value coverage as well as affordability and will likely be business as usual.
O However will larger employers drop coverage and pay penalty?
Reasons they may not –
deductions for plan costs.
21
22
the sale of qualified benefit plans to individuals.
required to do it for them.
1.
Roughly 30 States have indicated they will not create state based exchanges and have some sort of Federal / State gov’t co‐operation.
However, they will only be allowed to sell individual and small groups plans in the outside market, if they sale the same plans in the State Based Exchanges.
1.
Bronze (60% plan)
2.
Silver (70% plan)
3.
Gold (80% plan)
4.
Platinum (90%)
The State based exchanges are tasked with:
eligible for coverage through the exchange.
that no penalty will apply.
What Exactly will the Exchange do:
purchase insurance through the state based exchanges.
poverty level.
purchase coverage through the new state based exchanges:
the carriers. The tax credit is not meant to go to the individual at any time,
premium and cost‐sharing subsidies to be $500 billion from 2010 to 2019, and $8 billion in indirect costs.
25
What is a Subsidy / Tax Credit?
1) Income Level.
26 Income Level of F PL Premium as a Percent of Income Up to 133% 2% of income 133% to 150% 3% - 4% of income 150% to 200% 4% - 6.3% of income 200% to 250% 6.3% - 8.05% of income 250% to 300% 8.05 - 9.5% of income 300% to 400% 9.5% of income
How are Subsidies calculated?
If your income level is here: The maximum you can be required to spend on your individual health insurance is here:
FEDERAL POVERTY LEVEL CALCULATIONS Poverty level 400% of poverty level Persons in Family 1 $10,830 $43,320 2 $14,570 $58,280 3 $18,310 $73,240 4 $22,050 $88,200 5 $25,790 $103,160 6 $29,530 $118,120 7 $33,270 $133,080 8 $37,010 $148,040 For Families w/ more than 8 people, add $3,740 for each additional person
premium assistance / cost sharing subsidies??
“unaffordable”
additional steps, plus a basic understanding of insurance jargon. And it's a mandate, not a suggestion.
like, how much they cost, what insurance carriers are going to participate are expected in early to late summer of 2013.
27
28
Plans that provide coverage for dependents are required to extend the coverage of dependents (adult children) to age 26, regardless of their eligibility for other insurance coverage, effective Sept. 23, 2010. Your children can join or remain on your plan even if they are:
29
(employees, spouses or dependents) under age 19 based on pre‐ existing conditions.
beginning in 2014.
must comply once the provision becomes effective with respect to the
collectively bargained plans.
30
eligible, full time, employee wait more than 90 days before they become eligible for coverage.
and not the beginning of the month following 90 days as it common in many current plans.
31
employees the total cost of their group health benefit plan coverage on their W‐2 forms under the Patient Protection and Affordable Care Act (the Act) effective with the 2012 W‐2 forms distributed to employees in January 2013. For All other companies who provide employer coverage…. Beginning in 2014……
Form W‐2, with Code DD to identify the amount.
employer and the portion paid by the employee.
32
The medical loss ratio (MLR) = How much of every premium dollar is spent on medical expenses.
85% and the requirement for small group is 80%.
employees), insurers must spend at least 80% of premium dollars on claims and activities to improve health care quality whereas large groups insurers (>50 employees) must spend 85%.
required to provide a rebate to their customers starting in 2012.
33
Essential health benefits must include items and services within at least the following 10 categories:
treatment
1. Essential benefit requirements apply to individual and small group plans sold within and outside the new online, state‐ based exchanges scheduled to launch in 2014. 34
wages) by an additional 0.9% on wages exceeding a threshold amount.
for married individuals filing separately; and $200,000 for single filers.
wages received from the employer that exceeds $200,000, without regard to the amount of wages received by the employee’s spouse.
35
First $200,000 ($250,000 Married) Employer/Employee All Remaining Wages Employer/Employee Current Law 1.45%/1.45% 2.9% self‐employed 1.45%/1.45% 2.9% self‐employed Obamacare Tax Hike 1.45%/1.45% 2.9% self‐employed 1.45%/2.35% 3.8% self‐employed
36
Support for wellness programs at work As of 2014, participants in wellness programs generally can get discounts or rewards from their employers of up to 30% of the cost of their health care premiums (currently, the maximum discount is 20%). That reward can go up to 50% if the secretaries of Labor, Health and Human Services and the Treasury deem it appropriate. Smokers can be charged more As of 2014, employers can charge smokers up to 50% more than non smokers for their health insurance.
37
What to expect in the future
Greater ownership of your health care: A shift in how Americans view health insurance….This due to….
exchanges or open market
Choice: limited choices in the market. A few examples include:
1.
Public Exchange
2.
Industry Based Association Plans
3.
Direct with the Carriers.
Care Reform?
1.
A clear, defined, and approved association that will be around for many years to come:
2.
“Large Group” status:
3.
Benefit Design Flexibility:
4.
Strength in numbers when negotiating pricing
5.
Licensed, dedicated professionals who understand the industry and work only for our members.
40