Health Care Reform UpdateHealth Care Reform UpdateFlorence Unified School DistrictFlorence Unified School District

Governing BoardGoverning Board

July 11, 2012July 11, 2012

Florence/2013/Meetings/07112 Board meeting/12 board ppaca overview 0711.ppt

Supreme Court DecisionSupreme Court Decision

Affirmed PPACA Future: Debate, Elections in

November Further Legal Challenges Possible So, Onward and Upward

Upcoming PPACA IssuesUpcoming PPACA Issues

2013: 2012 W-2 to contain Aggregate Health Benefit Cost Information

Open Enrollment (7/1/2013): Summary of Benefits and Coverage (SOBC)– 4 Pages Maximum– Specific Information– $1000 Penalty for non compliance

Upcoming PPACA IssuesUpcoming PPACA Issues

2014 Reporting Requirements– Minimum Essential Benefits– Qualifying and Affordable

Coverage Penalty for non compliance:

– $50 for each missed employee; $100,000 maximum

Upcoming PPACA IssuesUpcoming PPACA Issues

2018: Cadillac Tax

40% Excise Tax on Value of Benefits in excess of– $10,200 Individual– $27,500 Family

Upcoming PPACA IssuesUpcoming PPACA Issues

State Exchange to be “up and running” as of 2014

Deductible limits of $2,000 individual and $4,000 family, unless contributions are offered that offset excess deductibles.

Maximum out of pocket: $5,950 Individual; $11,900 Family

Upcoming PPACA IssuesUpcoming PPACA Issues

Plans to be offered through the State Exchange:

• Bronze Plan Provides 60% of actuarial value of minimum qualifying coverage.

• Silver Plan Provides 70% of actuarial value of minimum qualifying coverage.

• Gold Plan Provides 80% of actuarial value of minimum qualifying coverage.

• Platinum Plan Provides 90% of actuarial value of minimum qualifying coverage.

• A catastrophic only policy would be available for those 30 and younger.

Upcoming PPACA IssuesUpcoming PPACA Issues

Individual Mandate to Purchase Health Insurance

If employer does not offer “affordable and qualifying” coverage:

– Penalty for non compliance (or “tax” as SCOTUS has interpreted)

Possible subsidy depending upon income

Household Income 2014 Penalty 2015 Penalty 2016 Penalty

$10,830 $108.30 $325.00 $695.00

$21,660 $216.60 $433.20 $695.00

$32,490 $324.90 $694.80 $812.25

$43,320 $433.20 $866.40 $1,083.00

$55,125 $551.25 $1,102.50 $1,378.13

$66,150 $661.50 $1,323.00 $1,653.75

$77,175 $771.75 $1,543.50 $1,929.38

$88,200 $882.00 $1,764.00 $2,205.00

Helping Employees Prepare for Health Care Reform Legislation Helping Employees Prepare for Health Care Reform Legislation (Individual Refusal to Purchase Coverage)(Individual Refusal to Purchase Coverage)

Penalty Table

Upcoming PPACA IssuesUpcoming PPACA Issues

Employer Mandate:

Don’t have to offer, but…..

– Penalty “if you don’t”

– Penalty possible “if you do”

• If coverage is not “qualifying or affordable”

TOPICEffective

Date of the Change

Description of the Change

Employer Penalty for Offering

Coverage that’s not “Qualifying” and “Affordable”

January 1st, 2014

Mandates only apply to employers with an average of at least 50 full-time employees during the preceding

calendar year.

Penalties assessed if employer coverage is considered “unaffordable”; employee contributions to the plan

must not exceed 9.5% of employee’s household income or if the plan is not “qualifying” – has an actuarial value

of less than 60% of covered health care expenses. Penalty: $3,000 per full time employee who receives a

subsidy through an insurance Exchange; capped at $2,000 X total # of FTEs with 1st 30 FTEs excluded.

% of FPL Max. % Single Income

Maximum Single

Premium

Family of 4 Income

Maximum Family of 4 Premium

400% 9.50% $43,320 $342.95 $88,200 $698.25

““Qualified and Affordable Plans” and PenaltiesQualified and Affordable Plans” and Penalties

Determination and Potential Application of Employer Determination and Potential Application of Employer Penalty for Categories of Employees Penalty for Categories of Employees

Employee Category How is this category of employee used to determine “large employer”

Once an employer is deemed to be a “large employer” could the employer be subject

to a penalty if this type of employee received a premium credit?

Full - time Counted as one employee, based on a 30 hour or more work week Yes

Part – time

Prorated (calculated by taking the hours worked by part-time

employees in a month divided by 120)

No

Seasonal Not counted, for those working less than 120 days in a year

Yes, for the month in which a seasonal worker is full-time

Temporary Agency

Generally, counted as working for the temporary agency

(except for those workers who are independent contractors)

Yes, for those counted as working for the temporary agency

Summary of Potential Employer Penalties under PPACA, Cong. Research ServiceMay 14, 2010

PPACA ModelingPPACA Modeling

Recommending a Customized Impact Study to quantify effect of PPACA in 2014

Modeling Scenario: Actual employee and employer

contributions US census data To project cost impact and employee

migration due to PPACA Report generated based upon:

No change to current benefit plans in 2014 Termination of group medical plan in 2014 Employer sponsors only a 60% actuarial

value plan in 2014

QuestionsQuestions