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Similar to Navigating health reform webinar
Navigating health reform webinar
- 1. Keep the conversationgoing: @dominionsystems @GravesandCoIns Navigating Health Reform: Then, Now, and Tomorrow We will begin at 1pm EST Use the chat feature to ask questions! #ACA
- 2. Software company thathelps businesses with their payroll, time & attendance, and human resource management. Dominion provides an integrated web-based solution that allows businesses to run more efficiently.
- 3. Specializes in insurancebenefits for individuals and employers from 2 employees and up. For employer groups, Graves & Company provides health, life, disability, vision, and voluntary/worksite insurance.
- 4. Matt Graves Benefit Specialist& Certified Patient Protection and Affordable Care Act Professional Contact Matt: [email protected] Linkedin: www.linkedin.com/in/matthewpgraves/
- 5. To help youunderstand the Affordable Care Act and how it impacts you
- 6. Agenda History Timeline Changes and Delays IndividualMandate Federal Poverty Level Guidelines Taxes and Fees Small Employer Groups and Health Reform Large Employers and the Employer Mandate
- 7. PPACA Legislatively known asthe ‘Patient Protection and Affordable Care Act’ (PPACA), but also referred to as Health Reform, Health Care Reform, Affordable Care Act, and Obamacare. – Signed into law by President Obama on March 23, 2010
- 8. 2010 to 2011 •Eligibility option to remain on parents health insurance coverage until age 26. • Medical underwriting prohibited for children under the age of 19. • Implementation of ‘no cost’ preventative care visit requirement. • New limitations on usage for HSA, FSA, and Health Reimbursement arrangements. • New fee on pharmaceutical manufacturers. • Introduction of Medical Loss Ratio limitations.
- 9. 2012 to 2013 •Required distribution of Summary of Benefits and Coverage (SBC), provided by carrier. • Medical device ‘sales tax’ begins • Employers to begin reporting value of benefits of employee W- 2’s. • Employers required to inform all employees of exchange access and insurance availability through healthcare.gov • Pre-tax contributions to FSA limited to $2,500 annually.
- 10. 2014 to 2015 •Guarantee issue for all fully- insured plans (group and individual); elimination of pre- existing condition clauses (fully- insured plans). • Essential Health Benefit requirement (EHB). • Limitation on waiting periods for employer sponsored health insurance eligibility. • Individual mandate • Opening of state and federally managed health insurance marketplaces, also referred to • ‘Waiting on further guidance’ (see delays) • Employer mandate for employers with 50 or more employees. • Implementation of health plan excise tax, commonly referred to as the ‘Cadillac Tax’ (2018).
- 11. Changes and Delays •Over 40 changes and delays to date • Delay of SHOP • Elimination of 1099, PPACA related, reporting requirement • Extension of individual enrollment period, sans mandate penalty • Extension of individual deadline for April 1st effective date • Carrier option to provide continuation of prior year plan/extension of ‘non-compliant’ plans • Removal of deductible ceilings for small group plans
- 12. Individual Mandate Penalty(Tax) • 2014: $95 per uninsured individual or 1% of household income. • 2015: $325 per uninsured individual or 2% of household income. • 2016: $695 per uninsured individual or 2.5% of household income.
- 13. Individual Mandate andFederal Poverty Level Guidelines Persons in Family/Household Income Guidelines at 400% 1 $45,960 2 $62,040 3 $78,120 4 $94,200 5 $110,280 6 $126,360 7 $142,440 8 $158,520 • Individuals/families with less than 400% of the defined household income may qualify • Individuals/families with less than 250% of the defined household income may qualify for cost- sharing subsidies
- 14. Taxes and Fees ComparativeEffectiveness Research Fee (CERF) is an annual fee on fully-insured and self-funded health plans until 2019. • Created to fund comparative effectiveness research to determine which treatments work best when applied to actual patients. • A $2 per participant, annual fee, that may be future indexed on the basis of national health expenditures. • On fully-insured plans the insurer is responsible for fee payment; self-insured plans the employer is responsible.
- 15. Taxes and Fees HealthInsurance Industry Fee is an annual fee on fully- insured medical, dental and vision plans beginning at 2-2.5% in 2014 and increasing to 3-4% in future plan years. • Implemented to help fund the Federal and State Marketplaces. • Insurers are responsible for making sure fee is paid.
- 16. Taxes and Fees ReinsuranceAssessment Fee is an annual fee applied to fully-insured and self-funded plans from 2014-2016. • Purpose is to help offset high risk individuals entering the individual market. • Fee is $63 per insured per year beginning in 2014 with a decreasing, to be determined fee, in 2015 and 2016. • For fully-insured plans, the insurer is liable for the fee, while self- funded plan sponsors are responsible for the payment but may utilize the services of a Third Party to help administer.
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- 18. The ‘Cadillac’ Tax Effectivebeginning 2018 40% annual tax on employers that provide high-cost benefits through an employer- sponsored group health plan.
- 19. The ‘Cadillac’ Tax •Currently, the law states that the employer is responsible for determining the tax and reporting it to the plan administrator. – The plan administrator pays the tax to the IRS • Tax is applicable to premiums exceeding caps of $10,200 for single coverage and $27,500 for family coverage. – The 40% tax is levied on each dollar of premium exceeding the caps
- 20. W-2 Reporting Requirements CoverageType Report Do Not Report Optional Major medical Dental or vision plan FSA funded by salary- reduction amounts FSA employer contributions/excess contributions HRA contributions HSA contributions Hospital indemnity or specified illness, paid on pre-tax basis Additional reporting information available at http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage
- 21. Reforming FSAs, HRAs,and HSAs • FSA – (Flexible Spending Account), HRA – (Health Reimbursement Arrangement), HSA – (Health Savings Account) – FSAs, HSAs, and HRAs are pre-tax, or tax deductible, resources that can be utilized towards qualified medical expenses. • Under PPACA, FSA and HSA dollars can no longer be used to purchase OTC medications and other retail medical related items without a physician issued prescription.
- 22. Reforming FSAs, HRAs,and HSAs • FSAs are now limited to a maximum contribution of $2,500 per calendar year under PPACA. – Dollars contributed to FSAs are usually provided through an employee’s elected payroll deduction. – FSAs are, usually, referred to as ‘use-it-or-lose-it’ accounts • In late 2013 the IRS issued new guidance enabling a FSA balance roll- over of, up to, but no greater than $500. • HRAs, prior to September of 2013, could be offered by an employer to reimburse employees for individually owned health insurance policies. – IRS ruled such actions were no longer compliant because it qualified as a group health related offering.
- 23. Small Employer Groupsand Health Reform Small employer groups defined as employers with 49 or less Full-Time Equivalent employees. • Not subject to penalties for declining to offer an employer sponsored health insurance plan.
- 24. Small Employer Groupsand Health Reform All small employer group, fully-insured (FI) plan requirements – Must be guarantee issue beginning in 2014; elimination of medical underwriting – Groups no longer classified on basis of industry code (SIC) for purposes of underwriting – Elimination of composite rates – Maximum 3-to-1 spread of rate differential amongst employee population – Adjusted Community Rating
- 25. Large Employer Groupsand the Employer Mandate
- 26. Calculating Full-Time Equivalents •Step 1: Calculate the number of full-time employees for each month of the previous calendar year. – Full-time is defined as anyone that worked 30 hours a week per month, or 130 hours total per month; includes any paid hours (e.g., vacation). • Step 2: Determine the number of FTEs for each month of the previous calendar years. – To calculate the FTEs take the total paid hours of service that were not full-time for the defined month; defined as 30 hours or less per week or a maximum of 120 hours per month, per employee. – Determine the sum total hours worked of all part-time employees and divide by 120; result is the employer groups total number of FTEs.
- 27. Calculating Full-Time Equivalents •Step 3: Determine the final FTE count by finding the sum of Step 1 and Step 2; divide the FTE total sum by 12. • If the employer group’s calculated result is greater than 50, the group is subject to the Employer Mandate.
- 28. Large Employers andthe Employer Mandate – The Penalties • Large group employers not offering coverage are subject to an annual penalty of $2,000 per full-time employee, less 30 employees. – Example: Penalty for employer with 75 full-time employees, not offering coverage. • (75 full-time employees minus 30) multiplied by $2,000 = $90,000 in calendar year penalties. • If the large group offers a health plan, but does not meet ‘affordability’ standards, the employer is subject to a $3,000 penalty per employee that is eligible to receive a premium tax-credit through the State or Federally Facilitated Marketplace.
- 29. Large Employers andthe Employer Mandate The employer mandate requires employers with 50 or more full-time equivalent employees (FTEs) to provide health insurance. Insurance must be provided to all eligible employees working the equivalent of 30 hours or more a week over a defined ‘look back’ period.
- 30. Employer Mandate Part-time employees(less than 30 hours) • No requirement to offer part-time employees coverage • However, part-time employees are utilized in calculating the Full-Time Equivalents
- 31. What happens next? Ideas,Statistics, Expectations, and Actions
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