130220 kennebec valley chamber presentation

The Affordable Care Act

And Your Business

Mitchell Stein, Policy Director Consumers for Affordable Health Care

“Advocating the right to health care for every man, woman, and child”

1-800-838-0388 www.mainecahc.org

Kennebec Valley Chamber of Commerce

Wednesday, February 20, 2013

Agenda

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• Introduction to Consumers for Affordable

Health Care

• The Affordable Care Act: The Basics

• Implementing the ACA: What Your Business

Needs to Know

www.mainecahc.org 3

Introduction to Consumers for

Affordable Health Care

www.mainecahc.org 4

MISSION STATEMENT

Consumers for Affordable Health Care is a Maine advocacy organization that

strives to ensure a strong consumer voice in decision making at all levels and

in all forums in order to advocate for a consumer-oriented health system in

Maine and the United States. Since 1988, Consumers for Affordable Health

Care has provided leadership and support to consumers, businesses,

organizations, and policymakers to specifically advocate for:

Access to health care for all Maine residents including preventive,

acute, chronic and long-term care that is assured through health care

coverage

Affordable health care coverage that is guaranteed for all Maine

residents, taking into account an individual’s ability to pay

An individual's right to freely choose her or his provider and method

of care within the confines of quality care that is based on objective

standards and supported by publicly available data on individual

providers and hospitals

Financing coverage from a broad variety of government and private

sources

Controlling rising costs while preserving quality care

Consumers for Affordable Health Care provides resources to educate

consumers and assist them in navigating the existing system.

Consumers for Affordable Health Care works with other organizations to

educate them and to advocate our mission before legislative and regulatory

bodies.

PO Box 2490

Augusta, ME 04338-2490

www.mainecahc.org

Helpline

1-800-965-7476

http://www.mainecahc.org/

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About Consumers for Affordable

Health Care (CAHC)

Non-profit, non-partisan mission driven

advocacy organization since 1988

Consumer Assistance Program

Policy Research and Advocacy

Mission: To advocate the right to quality,

affordable health care for every man,

woman, and child in Maine.

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Consumer Assistance Program

HelpLine 1-800-965-7476 Our statewide, toll-free Consumer HelpLine assists people who

need insurance or have been denied care

Provides help finding programs to help with health care and drug costs

Help with Coverage Disputes

Understanding your coverage and rights

Help with denials, appeals or complaints

On-line health care guide

Workshops and presentations

Train service professionals on MaineCare eligibility, private

insurance and non-insurance programs that can help people

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Policy Advocacy

Monitor Statehouse and Washington activities

Speak on behalf of consumers at state level

Represent consumers in rate review hearings

(and help consumers to represent themselves)

Info we get thru our Helpline and Outreach

informs our policy and advocacy work; we often

are able to spot harmful trends

Founding member of the Health Care for Maine

Alliance (HC4ME)

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The Affordable Care Act:

The Basics

The ACA – Law of the Land

Supreme Court ruled:

Individual Mandate is a constitutional exercise of

Congress’ power to tax

Medicaid expansion violates Congress’ spending clause

power as unconstitutionally coercive of states Results in Medicaid Expansion being an option for each state instead of

mandatory for all states

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What does the ACA do?

Universal access to health coverage

32 million uninsured Americans (est. by 2019)

Expansions to public programs

New Options for Individuals and Small Businesses

Insurance Reform at the Federal Level

Patients’ Bill of Rights

Holding Insurance Companies Accountable

Workforce Expansion and Quality Improvement

Provisions

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What’s happened so far Young adult dependent coverage until age 26

No pre-existing condition exclusions for children

Interim coverage available for adults with pre-existing conditions

New consumer protections (e.g. appeal rights, etc.)

Medicare prescription drug coverage donut hole being plugged in phases

Small employer tax credits

No cost preventive services

End to recisions

Ban on lifetime limits

Phasing out of annual limit

Standardized disclosure forms (SBC)

And more…

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And coming in 2014 Minimum Credible Coverage Requirement: Mandate for Individuals

Mandate for large employers (50 or more employees)

Expanded Medicaid eligibility - incomes up to 133% FPL (dependent on State participation)

Health Insurance Marketplaces (Exchanges) Individual subsidies toward Premiums and Cost Sharing

Additional Small Employer Tax Credits (through the Marketplace)

Limits on Out-of-pocket spending

One-stop shopping: consumer-friendly

Navigators/Assisters

Plan reforms Essential Health Benefits (both Marketplace and non-Marketplace plans)

Rate Review

Risk Adjustment Programs

No more pre-existing condition exclusions for adults

And more…

Marketplaces (Exchanges)

Supreme Court decision left Exchanges untouched

An Exchange is a marketplace that provides a way to

compare and review choices in a consumer-friendly

format (now called marketplace)

Marketplaces will offer a variety of plans for individuals

and small businesses

Enrollment begins October 1, 2013!

Coverage will begin for all new enrollees on January 1,

2014

Enrollment annually or at “qualifying event”


Marketplaces (cont.) Maine will have a Federally-facilitated

Marketplace

Two Marketplaces

Individual Marketplace

Small Business Health Options Program

(SHOP )


Marketplaces (cont.) Individual subsidies will only be available through the

Marketplace. Who can get a subsidy?

If NO access to employer coverage:

Household income between 100 and 400% FPL

If YES access to employer coverage:

At or below 133% FPL and employer plan coverage less

than 60% of average expenses

At or below 400% FPL and employer plan costs more than

9.5% of income

Subsidy for individual coverage offered through Marketplace

Sample 2013 FPLs:

100% Single - $11,490, Family of 4 - $23,550

400% Single - $45,960, Family of 4 - $94,200


Marketplaces (cont.) Who can help? Navigators

Specific responsibilities outlined in law, including facilitating

enrollment in qualified health plans

Must be at least two, one of which must be a nonprofit

May target specific groups “most likely” to be in Marketplace

Assistors (may not be available in all states)

More flexibility in duties

Not limited to type

Can be used to reach any groups

Brokers

Awaiting further Federal regulations as well as clarification of state

regulation of Navigators


Essential Health Benefits (EHB) EHB is the minimum benefits all (insured) plans must cover (inside OR

outside the Marketplace)

Each state had the ability to define their own EHB (at least for 2014 and

2015) from one of 10 possible benchmark plans

10 Mandatory Categories of Coverage: Ambulatory patient services

Emergency services

Hospitalization

Maternity and newborn care

Mental health and substance use disorder services, including behavioral health treatment

Prescription drugs

Rehabilitative and habilitative services and devices

Laboratory services

Preventive and wellness services and chronic disease management, and

Pediatric services, including oral and vision care



Implementing the ACA:

What Your Business

Needs to Know

Employer Specifics

I do want to caution that I’m not a broker, not an accountant

and not a lawyer – I’m a policy guy who can talk at a high

level about what’s coming. I will provide background

information but I am not able to suggest to you your best

option. I would strongly encourage you to talk to others

(broker, accountant and/or attorney) before making any

decisions.


Employer Specifics Tax Credits

Two programs:

Currently available and available through the Marketplace in 2014

For tax years 2010 through 2013, the maximum credit is 35 percent for small

business employers and 25 percent for small tax-exempt employers such as charities

On Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively

(available only if you purchase coverage through the Marketplace)

If you are a small business employer who did not owe tax during the year, you can

carry the credit back or forward to other tax years. Also, since the amount of the

health insurance premium payments are more than the total credit, eligible small

businesses can still claim a business expense deduction for the premiums in excess

of the credit

For tax-exempt employers note that the credit is refundable, so even if you have no

taxable income, you may be eligible to receive the credit as a refund so long as it

does not exceed your income tax withholding and Medicare tax liability.


Employer Specifics Tax Credits (cont.)

Can you claim the credit?

To be eligible, you must cover at least 50 percent of the cost of single (not family)

health care coverage for each of your employees. You must also have fewer than 25

full-time equivalent employees (FTEs). Those employees must have average wages

of less than $50,000 a year

What is a full-time equivalent employee?

Calculate the number of full-time equivalents by dividing the total annual hours of

part-time employees by 2080

What are average wages? If you pay total wages of $200,000 and have 10 FTEs.

To figure average wages you divide $200,000 by 10 – the number of FTEs – and

the result is your average wage. The average wage would be $20,000

The amount of the credit you receive works on a sliding scale. The smaller the

business or charity, the bigger the credit. So if you have more than 10 FTEs or if the

average wage is more than $25,000, the amount of the credit you receive will be less

http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers




















Employer Specifics Employer Responsibility

Employer responsibility for offering coverage to full-time

employees if have 50+ full time equivalent employees

Full-time is defined as 30+hours a week

Equivalents are determined based on total number of

hours by part-time employees each month and dividing

by 120

Paid hours include paid vacation days, sick days, etc.

Employers use 2013 data to determine 2014

responsibility


Employer Specifics Employer Responsibility (cont.)

Transitional relief – may use any consecutive 6 month

period in 2013 to determine 50+ status

Seasonal employees don’t count

Guidance does not define seasonal – for at least 2014

employers may use any reasonable good-faith interpretation of

that term (this represents a positive change in Maine where the

proposed definition of 120 days did not cover our tourist

“season”)

Can use proposed rules to make decisions, won’t be

penalized in 2014 if final rules are different


Employer Specifics Employer Responsibility (cont.)

If have 50+ full time equivalents, penalty if:

Does not offer coverage to full-time employees

Coverage offered is not sufficient: Less than 60% actuarial value

Coverage is unaffordable: EE responsibility 9.5% income or

more for individual coverage

Companies with common owners or are otherwise

related must be combined for determining 50+ full time

equivalents

If state elects to participate in Medicaid (MaineCare)

Expansion and employee enrolls there is no penalty


Employer Specifics Additional Items

Medical Loss Ratio (MLR) Rebates

First ones mailed in July 2012, distribution depends

on who pay the premium (employer or employee)

Summary of Benefits and Coverage (SBC)

For insured plans should be created by insurer and

given to ER to distribute

Applies to all individual and group plans (no exception

for grandfathered plans)


Employer Specifics Additional Items (cont.)

New hire waiting period cannot exceed 90 days (all

plans, grandfathered or not)

W2 disclosure of benefit costs beginning January 2013

(for 2012 year)

If issued less than 250 W2s in January 2012, exempt

in 2013

Note this is NOT taxable income. For informational

purposes only



Flexible Spending Account (FSA) limit of $2,500

including Health and Dependent Care FSAs. HRA and

HSA not impacted by new limit (begins in 2013)

Medicare Tax Increase for income over $200,000 for

individuals and $250,000 for joint filers

Patient Centered Outcomes Research Institute Fee (First

annual fee payable by July 2013 )

First year, $1 per covered life, second year $2 per

covered life, thereafter the $2 is indexed for Medical

Inflation



Notice of Marketplace Options (originally scheduled for

March 2013 but delayed until late summer early fall to

correspond with publicity around Marketplace enrollment

period)

Simple Cafeteria Plans (2014 plan year)

Congress amended the Internal Revenue Code to

allow eligible employers' cafeteria plans to qualify as

simple cafeteria plans. Simple cafeteria plans are

treated as meeting certain nondiscrimination

requirements and benefits for cafeteria plans making

the process simpler.


Employer Specifics To offer or not to offer, that is the question

A few things to consider when deciding whether or not to offer health coverage:

Employer’s cost The coverage offered is tax deductible to the employer

The penalty paid is not tax deductible to the employer

Potential need to increase salary to compensate for the reduction in total compensation

Employee’s cost The cost of individual coverage is NOT tax deductible to the employee (as opposed to their contribution to

employer coverage which is tax deductible)

Coverage might be more expensive than their employer coverage is now, especially if they are not eligible

for subsidies

What is the competition doing Impact of decision in attracting and retaining employees


For More Information: Consumers for Affordable Health Care:

http://www.mainecahc.org/ACA/updates.htm

HealthCare.Gov: http://www.healthcare.gov/

Department of Labor FAQs: http://www.dol.gov/ebsa/faqs/

IRS: http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions

Kaiser Family Foundation: http://healthreform.kff.org/





http://www.healthcare.gov/

http://www.dol.gov/ebsa/faqs/

http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions










http://healthreform.kff.org/

http://healthreform.kff.org/


Questions?

Consumers for Affordable Health Care Ph: 1-800-838-0388

HelpLine: 1-800-965-7476 Web: http://www.mainecahc.org

“Like” us on Facebook Read our blog: http://mecahc.blogspot.com/

Follow us on Twitter: @MAINECAHC

http://www.irs.gov/newsroom/article/0,,id=220839,00.html

http://mecahc.blogspot.com/

http://mecahc.blogspot.com/


Thank You!

130220 kennebec valley chamber presentation

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