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Health Care reform and employers
The document summarizes key provisions of the Affordable Care Act. It discusses how the legislation aims to reduce the number of uninsured through mandates on individuals and employers, and by establishing health insurance exchanges. It also outlines taxes and fees included in the legislation, such as excise taxes on high-cost health plans and fees on health insurers. Concerns raised include the complexity of the legislation, its impact on employer-provided coverage, and its long-term costs and economic impact.
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Health Care reform and employers
- 1. Nandan Kenkeremath President Leading Edge Policy & Strategy, LLC
- 2. Patient Protection andAffordable Care Act Public Law No: 111-148 Signed March 23, 2010 Health Care and Education Reconciliation Act Cleared for President March 25, 2010
- 3. Bills reduce thenumber of uninsured (about 32 million) in 2019 Guarantees access Certain employers could allow all of their workers to choose among the plans available in the exchanges
- 4. • Too Complex – an Unstable Collection of Massive Government, Trillions in Spending, Taxes, and Confusion • over 2,700 pages of complex and confusing provisions. Substantial new authorities are handed to bureaucracies that will launch more complexity and confusion. No one can follow or predict the disruptions, distortions, unintended consequences that flow from the proposals.
- 5. • Financial Help is Not Generally Available to Employees of Companies that Provide Qualified Health Insurance • Trillions of dollars of subsidies and entitlements are generally not available to help workers who get qualified insurance from their employers. This means rising health care cost continue to keep wages down. • In response to the incentives of the bill, large employers may reduce certain lower come, in- house positions in favor of outsourcing or contracting out.
- 6. • The Bill is Inconsistent with the President’s Promise that Employees can Keep Health Plans They Have Due to Government Micromanagement • The Federal government would take a more substantial role in the design of health insurance through dozens of new requirements.
- 7. • The Bill is Inconsistent with the President’s Promise that Employees can Keep Health Plans They Have Due to Punitive Taxes • Starting in 2018, the bill imposes a 40% tax on certain high cost plans which employees would ultimately pay for in either fewer increases in salary changing plans. • The tax will force many employers to change their current plans in favor of cheaper plans – plans that may carry fewer benefits and, possibly, higher cost-sharing.
- 8. • The Bill will add to the Instability for Our Economic Future • Over an operating ten year window they are $2. 5 trillion dollars (2014-2023) in new spending. And that is based on estimates that may or may not be reliable over time. • The Congressional Budget Office, the Medicare Actuaries, and many others do not appear skeptical over the political sustainability of hundreds of billions of dollars of cuts to Medicare.
- 9. • Mandates, Penalties and Liabilities will Harm Employers Who have Been Doing Their Part to Provide Health Insurance • The bill contains dozens of confusing, conflicting, and burdensome provisions with new bureaucrats and new penalties. These provisions will create conflicting interpretation and pose substantial new threats and liabilities for employers. Employers may get out of the role of providing health insurance. • The employer mandates are punitive, create needless bureaucracy, and may threaten jobs.
- 11. Self-Funded Department of Employer Labor Plan
- 12. Small State Group Regulators Market
- 13. State Insurance Regulators Licensure, Accreditation EXISTING REQUIREMENTS •Prompt pay •Guaranteed renewal •Appeals and grievances •Rating •Privacy/Confidentiality •Preexisting conditions •Licensure/Accreditation •Non‐discrimination •Antitrust •Quality improvement and •Benefit plan reporting material/information •Benefit mandates •Consumer protection •Solvency and financial •Fraud and abuse requirements •Market conduct
- 14. Department of Labor Internal Revenue Service EXISTING PROGRAMS EXISTING AUTHORITIES •ERISA •Enforcement for HIPAA, Mental Health Parity, •COBRA Genetic nondiscrimination •Health care portability •Tax provisions •Privacy, Mental Health Parity, Genetic Non Discrimination •Benefit Requirements Health and Human Services •Claims Processing EXISTING REQUIREMENTS/PROVISIONS Requirements •HIPAA Benefit Mandates •Enforcement Authorities •HIPAA Privacy/ARRA Privacy •Mental Health Parity •Genetic Information Nondiscrimination Act •Medicaid/CHIP •Medicare
- 16. • Large Employers (Above 50) • Auto Enroll (1511) • Inform about coverage option (1512) • Minimum essential coverage (1513) • Eligible employer-sponsored plan • Full time employees (and their dependents) • Penalty if fails to provide opportunity and on full time employee enrolls in a QHP involving premium tax credit or cost-sharing reduction. $2000 per employee cap.
- 17. Maintain Essential Coverageafter 2013 for individual and dependents Penalty of $695 in 2016 with phase in $2,250 for entire family
- 18. States to establishExchanges by 2014 Certify Qualified Health Benefit Plans Essential Health Benefit Requirements Refundable tax credit for coverage under a qualified health plan Reduced cost-sharing for individuals enrolling in qualified health plans
- 19. In 2010 through2013, eligible employers can receive a small business tax credit for up to 35 percent of their contribution toward the employee’s health insurance premium. Tax- exempt small businesses meeting the above requirements are eligible for tax credits of up to 25 percent of their contribution. In 2014 and beyond, eligible employers who purchase coverage through the State Exchange can receive a tax credit for two years of up to 50 percent of their contribution. Tax-exempt small businesses meeting the above requirements are eligible for tax credits of up to 35 percent of their contribution.
- 20. Excise Tax onHigh Cost Employer Plans in 2018 (9001) Annual Fee on Health Insurance Providers 9010 Elimination of Deduction of Expenses allocable to Medicare Part D Subsidy 9012
- 21. • No Lifetime or Annual Limit (PHSA 2711) • Prohibiting rescissions (PHSA 2712) • Coverage of preventive services (PHSA 2713) • Extension of dependent coverage (PHSA 2714) • Development and utilization of uniform explanation of coverage documents and standardized definitions (PHSA 2715) • Prohibition of discrimination based on salary (exception self-insured) (PHSA 2716)
- 22. • Ensuring quality of care (PHSA 2717) • Accounting for Costs value (PHSA 2718) • Appeals process (PHSA 2719) • Administrative simplification (1104) • Prohibition of preexisting condition (PHSA 2704) • Guaranteed availability of coverage (2702) • Non-discrimination in health care (2706) • Comprehensive health insurance coverage (2707)
- 23. • Guaranteed availability 2702 • Guaranteed renewability 2703 • Prohibiting discrimination based on health status 2705 • Wellness program 2705 • Provider participation 2706 • Prohibition on excessive waiting periods • Development of coverage documents and standardized definitions (2715)
- 24. Between 6 millionand 7 million people would be covered by an employment-based plan under the bill who would not be covered by one under current law (largely because the mandate for individuals to be insured would increase workers’ demand for coverage through their employers).
- 25. Between 8 millionand 9 million other people who would be covered by an employment- based plan under current law would not have an offer of such coverage under the proposal. Firms that would choose not to offer coverage as a result of the proposal would tend to be smaller employers and employers that predominantly employ lower wage workers.
- 26. Under the legislation,workers with an offer of employment-based coverage would generally be ineligible for exchange subsidies, but that “firewall” would be enforced imperfectly and an explicit exception to it would be made for workers whose offer was deemed unaffordable.
- 27. Current Employer Providing Insurance Smaller Companies not Bigger Companies Providing Insurance but Willing to Pay Penalty Employees Receive But Employees Receive Subsidy Subsidy
- 28. Small Business TaxCredit Eliminating Pre-Existing Condition Exclusions for Children Prohibiting Rescissions Eliminating Lifetime Limits Regulating Use of Annual Limits Covering Preventive Health Services Extending Coverage for Young Adults
- 29. Standardizing the Definitionof Qualified Medical Expenses Increased Additional Tax for Withdrawals from Health Savings Accounts and Archer Medical Savings Account Funds for Non- Qualified Medical Expenses Pharmaceutical Manufacturers Fee
- 30. Administrative Simplification Limiting HealthFlexible Savings Account Contributions Eliminating Deduction for Employer Part D Subsidy Increased Threshold for Claiming Itemized Deduction for Medical Expenses Additional Hospital Insurance Tax for High Wage Workers Medical Device Excise Tax
- 31. Reforming Health InsuranceRegulations Eliminating Annual Limits Ensuring Coverage for Individuals Participating in Clinical Trials Establishing Health Insurance Exchanges for Individual and Small Group Market Providing Health Care Tax Credits Individual Mandate Employer Mandate Health Insurance Provider Fee
- 32. High Cost PlanExcise Tax
- 33. Increasing the subsidiesfor premiums and cost sharing that would be offered through the new insurance exchanges; Increasing the penalties for employers that do not offer health insurance and modifying the penalties for individuals who do not obtain insurance; Increasing the federal share of spending for certain Medicaid beneficiaries;
- 34. Changing eligibility forMedicaid in a way that effectively increases the income threshold from 133 percent of the federal poverty level to 138 percent for certain individuals; Reducing overall payments to insurance plans under the Medicare Advantage program; Expanding Medicare’s drug benefit by phasing out the “doughnut hole” in that benefit;
- 35. Modifying the designand delaying the implementation of the excise tax on insurance plans with relatively high premiums; and Increasing the rate and expanding the scope of a tax that would be charged to higher- income households.
- 36. • Adding Problems and Instability for Our Economic Future • Relies on Cuts in Medicare that Are Not Politically Sustainable Over Time • Breaking the Promise to Allow Employees to Keep Current Plans • Failing to Address the Rising Cost of Health Care • Government Regulation of the Health Care Quality of Hospitals and Doctors
- 37. Extensive Requirements toProvide Information to the Government Unfairly treating low and moderate income workers Pressure for outsourcing
- 38. Nandan Kenkeremath President Leading EdgePolicy & Strategy, LLC [email protected] 703-407-9407