agenda solution oriented and hopefully political free individual mandate – winners & losers,...
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Agenda
• Solution oriented and hopefully political free• Individual Mandate– Winners & Losers, Rules & Exchanges
• Rules for Employers with less than 50 lives– Mandates, Taxes and Fees
• Rules for Employers with more than 50 lives– Mandates, Taxes and Fees
• Solutions
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Misinformation
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Misinformation
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Winners & Losers
Winners• Poorer• Sicker• Older
Losers• Richer• Healthier• Younger
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Exchange – Plan Requirements2014
EXCHANGES / MARKETPLACES
• Must offer “essential health benefits package”
• 10 essential health benefit categories
• Limited deductibles ($2000 / $4000)• Fair health insurance premiums
• Age (3:1) • Geographic area• Tobacco use (1.5:1) • Coverage tier
• 5 plan levels: • Platinum (90%), • Silver (70%)• Gold (80%), • Bronze (60%)
• Catastrophic plan for those under age 30
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Individual Mandate• Beginning in 2014, the Affordable Care Act includes a mandate
for most individuals to have health insurance or potentially pay a penalty for noncompliance.
• Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance.
• Individuals will be required to maintain minimum coverage levels for themselves and their dependents.
• Tax credits will be available to help offset cost if household income is less than 400% of the Federal Poverty Limit.
IN SHORT – HAVE COVERAGE THAT MEETS THE MANDATE OR PAY A TAX PENALTY.
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Penalty for Noncompliance2014 - Penalty for not maintaining minimum essential coverage– Greater of (capped at the national average of annual cost for Bronze plan
in the Exchange for # of individuals who would have purchased coverage): – A flat annual dollar amount or a percentage of annual family income as
follows:
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Exchanges
• Online marketplace for Individual coverage– Carriers compete for business
• Employers must notify members of the existence of the marketplace, the adequacy of the current plan and potential loss of employer contribution by October 1, 2013
• Not all exchanges are government sponsored– Only the government exchange has TAX CREDITS
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Exchange Overview• Exchange must offer “essential health benefits package”
• 4 plan levels: • Platinum (90%), • Gold (80%),• Silver (70%)* • Bronze (60%)
• Exchange also sells catastrophic plan for individuals < age 30 *Premium tax credits are available only in the government sponsored Exchange and are based on the silver plan cost
* Cost sharing reductions are only available with the silver plan in the Exchange
• Percentages reflect the richness of the plan (platinum pays 90% of costs)• Network will also vary widely from bronze to platinum
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Subsidy Examples
• 1 person; non-smoker; SILVER plan
AGE200%
$22,980Cost per
YearSubsidy Amount
AGE300%
$34,470Cost per
YearSubsidy Amount
AGE400%
$45960Cost per
YearSubsidy Amount
25 $2,312 $1,448 $864 25 $2,312 $2,312 $0 25 $2,312 $2,312 $0 35 $2,814 $1,448 $1,366 35 $2,814 $2,814 $0 35 $2,814 $2,814 $0 45 $3,325 $1,448 $1,877 45 $3,325 $3,275 $50 45 $3,325 $3,325 $0 55 $5,135 $1,448 $3,687 55 $5,135 $3,275 $1,860 55 $5,135 $4,366 $769
Source: Kaiser Family Foundation
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Subsidy Examples
• Family of 4; non-smoker; silver plan
AGE100%
$23,550Cost per
YearSubsidy Amount
AGE133%
$31,322Cost per
YearSubsidy Amount
AGE150%
$35,325Cost per
YearSubsidy Amount
25 $7,549 $471 $7,078 25 $7,549 $940 $6,609 25 $7,549 $1,413 $6,136 35 $8,553 $471 $8,082 35 $8,553 $940 $7,613 35 $8,553 $1,413 $7,140 45 $9,575 $471 $9,104 45 $9,575 $940 $8,635 45 $9,575 $1,413 $8,162 55 $13,195 $471 $12,724 55 $13,195 $940 $12,255 55 $13,195 $1,413 $11,782
AGE200%
$47,100Cost per
YearSubsidy Amount
AGE300%
$70,650Cost per
YearSubsidy Amount
AGE400%
$94,200Cost per
YearSubsidy Amount
25 $7,549 $2,967 $4,582 25 $7,549 $6,712 $837 25 $7,549 $7,549 $0 35 $8,553 $2,967 $5,586 35 $8,553 $6,712 $1,841 35 $8,553 $8,553 $0 45 $9,575 $2,967 $6,608 45 $9,575 $6,712 $2,863 45 $9,575 $8,949 $626 55 $13,195 $2,967 $10,228 55 $13,195 $6,712 $6,483 55 $13,195 $4,246 $8,949
Source: Kaiser Family Foundation
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Exchange Notification
• Census with audit trial– Email participants with receipts– Hand delivery with signature– First class mail with returned addresses
– Proof of additional contact
• Going extra step of providing concierge so no exchange questions were answered
• Amended Sec 125• New hires have notice in the enrollment guide and sign for it or
electronically enroll
• May not be 100%, but it will be far more compliant than most
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Mandates pre-2014
• Summary of Benefits and Coverage• 60 day notice of plan changes• Statement of Grandfathered Status• Notice of Rescission• Notice of Patient Protections & Provider Selection*• Preventive Care Services for Women*• $2,500 Contribution Limit for Health FSA’s• Marketplace Notice
*Non-grandfathered plans only
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Mandates Effective Plan Year 2014• Coverage must be effective by the 91st day of eligibility
– Variable Hour Safe Harbor (Measurement Period)• Guarantee Issue / Renewable for fully-insured plans*• Elimination of Pre-Existing Condition Exclusion• Coverage for Clinical Trials*• Limits on Cost Sharing*
– Out of Pocket limit of $6,350 / $12,500– Deductible, coinsurance and copay all accrue to limit– Premium is NOT part of Cost Sharing
• Optional Wellness Incentives of 30% or 50% for tobacco cessation
*Non-grandfathered plans only
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Mandates Effective Plan Year 2014
• No dollar limits on Essential Health Benefits– Large Employer does not have to offer– If offered, no limit can apply
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Mandates – No Date Set• Section 105(h) Non-Discrimination*
– Rules currently define a highly compensated individual as someone in the top 25% of earnings
• Fully Insured plans – Delayed– Grandfathered fully insured plans are exempt– Non-grandfathered fully insured plans – rules are pending
• Applies today to Self-Funded Plans– No delay of the rules– Fully insured rules (when released) may affect self-funded plans too
• Automatic Enrollment for FLSA Employers – Delayed– 200+ full-time employees– Rules are pending
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Current Taxes / Fees
• Additional Medicare Tax – January 2013– Employer collects 0.9% tax, does not match it– All employers
• Patient Centered Outcomes Research Institute Fee (PCORI) – 2012/2013– $1-2 per covered member fee, indexes annually– Paid with general assets only– 6 year fee– All plans
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The Tax Man Cometh (2014)
• Transitional Reinsurance Fee – January 2014– $63 per covered member fee in 2014– Paid with general or plan assets– 3 year fee (2014 – 2016)– Fee estimated to decrease each year– All plans
• Health Insurance Carrier Tax – January 2014– Annual fee based on carrier’s market share– Fully insured plans only
• Including dental & vision
– No end date
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Large Group / Small Group
• For PPACA 50 Full-Time Equivalents– Include part-time on a pro-rata basis
• For coverage, the state uses Average Number of Full Time Employees– Average over a period of time
• You CAN be large group for one and small group for the other.– Which set of rules do you follow?
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Small Group Considerations
• Provide the 10 Essential Health Benefits• “Fair” Health Insurance Premiums– Age, tobacco, area, tier– 3:1 Ratio of lowest rate to highest rate
• Meet certain Actuarial Values (metal plans)– HSA contributions do not count toward the AV
• Cost Sharing Limits (premium does not count)– $2,000 / $4,000 deducible– $6,250 / $12,000 out of pocket
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Small Group Considerations
• No penalty for not providing coverage• Employees can enter the exchange• Winners and losers– Older, sicker groups benefit. – Younger healthier groups do not.– Networks will be important
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Large Employer Considerations
• As of 2015, Large employers must offer affordable coverage that meets minimum value requirements or incur a penalty.– Minimum value = 60% or greater– Affordable = at least 9.5% of lowest paid employee
wages• $89.54 / mo. for employees making $7.25 / hr.• Working 30+ hours / week
– Available at least once a year
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Large Group Considerations• Pay or Play – Applicable to All Large Employers
• Full-time = 30 hours + per week• Penalty assessed if one or more full-time employees receives the
premium tax credit• Penalty is an excise tax
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Pay or Play Employee Types
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Solutions
• Manage Part Time Status– Part-time employees move to exchange coverage– Manage to less than 30 hours per week– Helps participation
• Skinny – Minimum Essential Coverage (MEC) – El Fenix– $70 - $90 pepm– Provides the minimum required by law– Have a plan B
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Solutions
• New plans– Network – HMO • Range from $99.99 at age 20 to $472.38 at age 64+
• Self-fund– Avoid mandates– Lower cost– Flexibility• Surcharge or exclude spouses
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Solutions
• Have an Exchange Concierge– Invaluable for anyone not covered by employer
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Mandates pre-2014
• Summary of Benefits and Coverage• 60 day notice of plan changes• Statement of Grandfathered Status• Notice of Rescission• Notice of Patient Protections & Provider Selection*• Preventive Care Services for Women*• $2,500 Contribution Limit for Health FSA’s• Marketplace Notice
*Non-grandfathered plans only
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Solutions
• Get compliant by March 2014.– Cannot unscramble eggs– Do not take brokers word for it– Treat it like an accounting relationship• Documentation• Deliverables
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Mandates Effective Plan Year 2014• Coverage must be effective by the 91st day of eligibility
– Variable Hour Safe Harbor (Measurement Period)• Guarantee Issue / Renewable for fully-insured plans*• Elimination of Pre-Existing Condition Exclusion• Coverage for Clinical Trials*• Limits on Cost Sharing*
– Out of Pocket limit of $6,350 / $12,500– Deductible, coinsurance and copay all accrue to limit– Premium is NOT part of Cost Sharing
• Optional Wellness Incentives of 30% or 50% for tobacco cessation
*Non-grandfathered plans only
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Mandates Effective Plan Year 2014
• No dollar limits on Essential Health Benefits– Large Employer does not have to offer– If offered, no limit can apply
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