NAVIGATING THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA)

Key Provisions ImpactingSmall Business

What is PPACA?

This presentation is focused on companies with less than 50 employees

Became law March 23, 2010; some provisions already in effect

Employer rules vary by company size: Self Employed 25 Employees or less 25-49 Employees 50 + Employees 250 + Employees

Key Benefit Mandates

Most carriers have/are modifying the plans they offer to conform to these requirements

Guaranteed Issue: waives pre-existing condition exclusions for persons younger than 19 ; on Jan 1, 2014, this benefit applies to ALL ages

Community Rating elements Removal of annual and lifetime dollar limits Coverage for dependents to age 26 100% coverage for certain preventive services Additional participant claim and appeal rights 90-day maximum wait for coverage

Three New Terms

Health insurance exchanges – where “pools” of qualified insurance policies became available for purchase beginning on Oct 1, 2013

Employer mandate – employers of 50 or more must provide insurance or pay a penalty. (Penalty delayed to Jan 1, 2015 due ostensibly to employer terminations and restructuring to29-hour jobs)

Individual mandate – individuals must have health insurance that meets new federal requirements, or pay a penalty

Insurance Exchanges

Setup required by 2014, but 32 states have refused to fund, passing baton to the US gov’t

Congress mandated continuation of individual and group coverage outside the exchanges

Insurance companies offer coverage “pools” through “portals of access” Regulatory bodies – regulate carriers and policies Subsidy administration – IRS Enrollment portals – online “SHOP” Information portals – internet-based

Individual Coverage

Annual penalty per family member the greater of (max 3 per family): 2014- $ 95 or 1% of individual’s taxable income 2015- $ 325 or 2% 2016- $ 695 or 2.5%, then indexed for inflation Enforced as tax liability on federal income tax

Exchange will subsidize premiums for individuals earning less than $46,000

Required to have Minimum Essential Health Coverage (MEC) starting January 1, 2014

Main Impacts on Employers

Employees can elect the exchange, impacting its 75% participation rate, but if the employer offers a plan, no subsidy is available to the employee

Employer plans unchanged since Mar. 23, 2010 can be “grandfathered” indefinitely

By 1/1/2014 – employer plan must conform to mandated benefits – plan renewal before end of 2013 will buy another year of noncompliance

But .. the exchange is operating the first year on “honor-system;” employee can claim no employer coverage – no way to verify

Employer Administrivia

Provide employees with current Benefits and Coverage (SBC) disclosure summary from insurer – at renewal or effective date after 9/23/13

Employee FSA contributions reduced to $2500; OTC meds disallowed for HSAs

H&HS supposedly approves >10% rate increases

Medical Loss Ratio (MLR) rebates started 2012; insurer must spend 85% of group premiums on claims

Notify employees of the existence of the exchange

Taxes and Fees

Employer credit: up to 35% of 2013 premiums

Four new fees added starting 2014 to insurance premiums: HIIF – 2.3%+ to offset PPACA cost-generating

provisions REA - $5.25/mo/insured to cover high cost patients PCORI – funds comparative treatment research FFEUF – pays for access to federally-facilitated

exchanges

0.9% Medicare payroll tax of income over $200,000

3.8% tax on investment income in effect for some

Where is PPACA taking us? Insurance premiums will continue to rise.

Privacy will evaporate – in 2014, health records will go to a centralized federal database.

Other Americans will wait longer for service, especially on exchanges, which docs will avoid.

Fewer doctors will take Medicare; Independent Payment Advisory Board will ration services, condemning seniors to 2nd-class medical care.

Coverage choices and flexibility will diminish.

Towards a Single-Payer System 10 million uninsured individuals without employer coverage are being forced to enroll in health

insurance

By 2015, so many workers will be trapped in the exchanges that there will be no going back to private plans

Community organizers have infested public places to sign up live bodies for the exchanges

Delay in business penalties accelerates the transition from employer-based insurance to the Single Payer System; it also transfers $60 billion in expense from business to taxpayers

Applicants can receive a “liar’s subsidy”

Recommendations

If you want to keep control of a group of 5 or more employees, look into partial self-funding

Support efforts in Congress to defund PPACA; Consider treatment outside the U.S. Find an independent physician or hospital Take charge of your health

Democrats and unions are jumping ship

For More Information

www.familybusinessoffice.net

http://www.sba.gov/healthcare http://www.dol.gov/ebsa/healthreform http://healthcare.gov/ http://www.theihcc.com

Wayne Peterson … (800) 659-4570