hcr 2012 (3)
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Health Care Reform 2.5
SDAHUNeil CrosbyDirector of Sales – Warner PacificVP of Public Affairs – CAHUChair of Media Relations - NAHU
How It Affects Employers & Agents
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Drivers of Reform
Health Care cost increases
Therefore Health ‘Insurance’ costs increase
Un Insured
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Initial Goals Of Reform Lower the Costs in Health Care Assure the Quality of Health Care Affordable coverage for all Americans Choice of Doctors & Plans
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The Health Care Reform Law
Details are hard to come by… Mostly general provisions Basic timelines Subject to change
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Employers Across America Want to Know… What are the effects on me as an Employer? What are the effects on my Employees? How much is this going to cost me? What do I have to do?
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The ‘Positives’ of the Law Small Business Tax Credit Overage Child Coverage Guarantee Issue No Lifetime maximum on benefits Preventive care covered at 100%
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FSA & HSA changes…
Insured's can no longer run ‘Over The Counter’ drugs through their FSA pre-tax.
HSA withdrawals for non-qualified medical expenses are now subject to a 20% penalty, which is a 100% increase.
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New 1099 provision Applies to all Businesses Must 1099 everyone they pay $600 or more to in
a year Include their Tax ID or SS#
Generating Tax Revenue…
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New Reporting
Include the cost of Employer paid Benefits in the Employee’s W-2
Employers of 50+ Employees, new extensive Reports
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Summary Benefit Comparisons (SBC’s) Carriers will generate SBC’s
Who provides to the Employer: New Business – Agent / General Agent Renewal – Carrier
Employers need to send to Cobra Beneficiaries
Carriers will send to CalCobra Beneficiaries
SBC’s included in renewal packets – Vary by Carrier
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Community Living Assistance Services & Supports Act
A Government run Long Term Care program All Employees in America must pay into this
program, unless they opt out. Estimated premium: $120-$240 per month 5 Year Deductible before Claims Maximum Daily Benefit: $75 per day
The C.L.A.S.S. Act
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More Tax Revenue… In 2013, ‘Medical’ expense contributions to FSA’s
to Pre-Tax will be capped at $2,500. An increase in MediCare Tax of .9%. New 3.8% MediCare Tax (Could be triggered by
selling a home) Applies to $200,000 Single, or $250,000 jointly.
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Provider ComplianceCurrently 14,000 Codes
In 2014
180,000 Codes
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Employer ComplianceAll Provisions: 1-1-2014
Renewal Date: Doesn’t matter
Plan Year: Doesn’t matter
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Rate changes… In 2014
Tobacco ‘rate ups’: 50% more?
Premium Ratio: 3/1 Maximum
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More 2014 Changes… Small Employers = 1-100 Employees eventually Guaranteed Issue Waiting Periods: Max 90 Days Subsidies begin
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Employer Mandate In 2014, Employers with 50 or more Employees
will not be mandated to provide coverage, but…..
Potential Penalty: $2,000 for each Employee
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Affordable Plan Requirement Affects Employers who do not pay 100% for EE’s Reviewed: Employee’s portion of premium Trigger: If Employee’s portion of premium
exceeds 9.5% of ‘household income’ Result: Employer is labeled as providing
‘unaffordable coverage’ Penalty: $3,000 to Employer, for each Employee Study: 1/3 of the Employers in America
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Exchanges In 2014, Exchanges begin in every state.
To create Competition
Some States may well need it, some not so much…
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California’s Past Exchanges HIPC – Health Insurance Plan of California (1993)
Exchange PacAdvantage – Not For Profit Co-Op (Closed
2006) Lessons learned?
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Exchange Provisions California, as an example… Individual – Agent involvement SHOP – Small Employer Health Options Plan Agent involvement Past knowledge applied?
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Employer ‘notices’ to their Employees Employers must give the option to opt out of
their plan for the Exchange plan Employers must pay for the Exchange plan Employees may keep the change…
Employer Vouchers
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Summary of the Law
Positive Provisions It was supposed to lower health insurance costs,
is it? Fairly heavy burden on Employers
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Will The Law Change? SCOTUS decision affects…
Fact: The Law was passed by only 1 Party
November Election: Will have a huge effect
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Questions ?
Neil Crosby
Director of Sales – Warner Pacific
Vice President of Public Affairs – CAHU
Chair of Media Relations - NAHU
800-801-2300