Affordable Care Act (ACA) aka Obamacare

Current and Future Impact on Benefits

for

Small and Large Businesses

June 1, 2016

Disclaimer

This presentation provides general information. This is not legal advice.

Guidance on many provisions of the Patient Protection and Affordable Care Act (ACA or PPACA) are outstanding. New guidance may be issued regarding ACA, or more generally, changes to statutes, rules, or regulations may be forthcoming that change the content of this presentation or alter the answers to some questions.

Initial Impact on Small Business Health Plans (Less than 50 Full-Time Equivalents)

• Full Time Defined as 30 Hours Per Week

• Member Level Rating

• Children Covered to Age 26

• Small Group Definition was 2-50 and was going to be increased to less than 100

• Employers Dropping Employer Coverage and having employees purchase individual plans

• Coverage needs to provide Minimum Essential Coverage & Affordable to employees

• Calculating Full Time Equivalents

• Seasonal/Part-time employee calculations – measurement periods (look-back period and stability)

• Waiting Period needs to be 90 days or less

• Additional filing via 1094 & 1095 forms

Initial Impact on Large Business Health Plans (More than 50 Full-Time Equivalents)

• May 12, 2016 - U.S. District Judge Rosemary Collyer ruling

that healthcare subsidies are unconstitutional as not approved by U.S. House of Representatives and that President Obama exceed authority by spending billons on these subsidies

• Appeal of this ruling is expected to be filed

• If ruling withstands appeal, it could undermine the stability of ACA

9.69% in 2017

What are Small Employers Doing Today?

• Increasing Deductibles and Coinsurance

• Looking toward less known companies – Evergreen

• Reducing employer paid ancillary plans (ie disability) and switching to Consumer (Voluntary) Benefits

• Continuing to offer group based products

• Maryland SHOP (Small Business Health Option Program)

• Level Funded Alternatives

Level Funding

Level Funding

What are Large Employers Doing Today?

• Changing Contributions by increasing Employer Dollars to Employee Only coverage and reducing or eliminating contributions to Dependents

• Increasing Deductibles and Coinsurance • Introducing Health Savings Accounts and Health Reimbursement

Accounts as a way to offset Employee exposure to higher deductibles/Out-of-Pocket Maximums

• Looking toward less newer companies – Evergreen • Reducing employer paid ancillary plans (ie. Life/Disability) but

allowing employees to pay for via Consumer (Voluntary) Benefits • Dependent Surcharge/Audits • Considering Self Funded (Level Funded) Alternatives • Private Exchanges (Defined Contribution Approach)

Source: Watson Wyatt Worldwide - “Effective Employees drive Financial Results”

Communication of Benefits is vital to Employee Satisfaction of Benefits

Regulatory Checklist Handout

Questions ?

John Grove BB&T Insurance Services 301-644-6556 jgrove@bbandt.com