the affordable care act 10 things you need to know. · what size employer does ppaca impact? get...

The Patient Protection and Affordable Care Act –

What Employers need to know

Presented by: Misty Baker [email protected]

800-880-7428

This update is based on the known provisions of the PPACA. This is not to be construed as legal or tax advice.

Copyright © 2013, Independent Insurance Agents of Texas. All rights reserved.

mailto:[email protected]�

Questions?

Just stop me and ask….

this is more fun when you

participate.


First things, first….

Breathe! There is so much to learn and what you learn today may not hold true tomorrow.

Clarification, through rule making, from several entities (HHS, DOL, IRS, CCIIO) will take place quickly over the next 18-36 months.

Over 20,000 pages of regulation have already been issued – Over a million pages are expected.

We cant cover 100% of the rules today, this is an overview that will start conversations with you and your broker.


Timeline, 2014 Guaranteed Availability of Insurance Requires guarantee issue and renewability of health insurance regardless of health status and allows rating variation based only on age (limited to a 3 to 1 ratio), geographic area, family composition, and tobacco use (limited to 1.5. to 1 ratio) in the individual and the small group market and the Exchanges. Implementation: January 1, 2014 No Annual Limits on Coverage Prohibits annual limits on the dollar value of coverage. Implementation: January 1, 2014 Employer Requirements Assesses a fee of $2,000 per full-time employee, excluding the first 30 employees, on employers with more than 50 employees that do not offer coverage and have at least one full-time employee who receives a premium tax credit. Employers with more than 50 employees that offer coverage but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee, excluding the first 30 employees. Implementation: January 1, 2014


What size employer does PPACA impact? Get your calculator ready

Generally speaking, only LARGE employers, over 50 full time equivalent workers*

You must include full time (30 hours per week) and part time workers (prorated).

Example: 25 full time employees 40 part time employees, working an average of 80 hours per month 35 seasonal employees working under 120 days*

Full time employees:

25

Full time equivalents

26.6

TOTAL full time

equivalents 51.6

40 part time employees x 80 hours per month = 3200 / 120 = 26.6

Group Size & Rules

Marketplace notification required by October 1, 2013. Employers must notify their employees of the existence of the Health Insurance Marketplace, in writing to employees by October 1, 2013. New employees must also receive information about the Marketplace.

Notification requirements

The written notification must inform the employee of the existence of the Marketplaces including: — A description of the services provided by the Marketplaces — The manner in which the employee may contact the Marketplaces to request assistance — The availability of premium tax credit to the employee if the employer’s plan doesn’t cover

60% of services and the employee purchases coverage through the Marketplaces — The employee may lose the employer contribution (if any) toward the cost of health benefits

if the employee purchases coverage through the Marketplaces

Notice for employers that offer benefits to all or some of their employees - http:/ / www.dol.gov/ ebsa/ pdf/ FLSAwithplans.pdf

Notice for employers that do not offer benefits - http:/ / www.dol.gov/ ebsa/ pdf/ FLSAwithoutplans.pdf


Marketplace (Exchange) Notice

http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf�

http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf�

Tips for completing Employer notifications

Part B – the employer completes

— Make sure to designate an email address for contact.

— Make sure you have a designated employee benefits contact for both employees and government official

— Employer statement includes offering minimum value affordable coverage

— This is almost impossible for you to complete right now

— Appears to be a one time notification.


Underwriting Considerations

Forget everything you know about underwriting & rates

Technically: Adjusted Community Rating (ACR), or Modified Community Rating — Zipcode — Tobacco use — Age

Cannot charge the oldest person more than 3 times what they charge the youngest person. (3 rate bands)

Tobacco use can be charged 50% than non tobacco users — No clear indication of how to determine tobacco use, honor system? — ONLY when a wellness program is in place — MOST carriers will NOT be asking about tobacco use



What will it cost?

Essential Health Benefits (EHB)

The law requires health plans offered in the individual and small group markets, both inside and outside of the Exchanges , offer a comprehensive package of items and services, that include:

Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health

treatment Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Preventive and wellness services and chronic disease management, and Pediatric services, including oral and vision care

No limit on these EHB


Essential Health Benefits (EHB)

Cost Sharing and deductible limits — Annual maximum out-of-pocket in 2014 — $6,350 self only $12,700 family coverage

— Deductible (Applies to small groups, “reasonably” applied to large group)

$2,000 self only $4,000 family coverage

— Preventive services covered at 100% — No lifetime limits — No annual limits on the dollar value of essential benefits


Small Group

Remember: Small employers are not penalized, taxed or fined if they don’t offer health insurance

Quality employee retention and recruitment are key

Be careful if you just give a raise, tax implications and could block employees from Marketplace subsidy

Don’t be afraid to self fund

You NEED a relationship with a payroll company or use great payroll software.


Full Time Status Waiting periods

Waiting Period — Not to exceed 90 days — Employer mandate delay did NOT change this rule. This is

due 1-1-14 for all groups.


“Marketplace” Online eligibility Online comparison of plans $4.4 Billion to build (originally $2 billion) Only place to receive immediate individual subsidy Open enrollment starts Oct 1, 2013 – March 31, 2014 Enrollment can be done: online, in person, via mail or phone

Marketplace assistors, agents, brokers, navigators

SHOP Exchange (on hold-ish) Small employer option (2-50)* Only place for tax credit 2-25 ee’s, annual avg wages are less than $50,000 can get up to 50% tax

credit Employee Choice (can be limited by the ER) THIS provision on hold till 2015

Exchange/Marketplace “Marketplace”


How caught?

Just one employee gets coverage from Exchange would cause employer to be reviewed for penalties

How will they know? — The Exchanges are responsible to review each individual’s

income to determine the level of premium subsidy that they are eligible for in the Exchange

— The Exchange will obviously review tax information for each applicant they find employer


Individual Mandate Penalties

Taxes begin in 2014 and rise in years following. In each year, the tax consists of the higher of a dollar amount or a percentage of household income. For a given household, the tax applies to each individual, up to a maximum of three. Following is the schedule of taxes:

2014: The higher of $95 per person (up to 3 people, or $285) OR 1.0% of taxable income.

2015: The higher of $325 per person (up to 3 people, or $975) OR 2.0% of taxable income.

2016: The higher of $695 per person (up to 3 people, or $2,085) OR 2.5% of taxable income.

After 2016: The same as 2016, but adjusted annually for cost-of-living increases.


To see what the subsidy amounts look like: http://healthreform.kff.org/SubsidyCalculator.aspx


Questions for your company

I must have a qualified broker

Don’t wait until 4th Quarter 2014

Expect more delays / changes / modifications

Do I have to pay or play? — Penalty vs. offering insurance? — Will I retain quality employees if I don’t offer a health plan?

Calculate FTE & establish look back

Budget for potential rate increase in 2014


Reference Material Links to guidance we talked about today:

►Definition of full-time employee ► http://www.irs.gov/pub/irs-drop/n-12-58.pdf ► http://www.irs.ustreas.gov/pub/irs-drop/n-12-17.pdf ► http://www.irs.ustreas.gov/pub/irs-drop/n-11-36.pdf ►90-day waiting period limitation ► http://www.irs.gov/pub/irs-drop/n-12-59.pdf ►Affordability ► http://www.irs.ustreas.gov/pub/irs-drop/n-11-73.pdf ►Minimum value ► http://www.irs.ustreas.gov/pub/irs-drop/n-12-31.pdf W2 Guidance: ► http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage ► http://www.irs.ustreas.gov/pub/irs-drop/n-12-09.pdf ►The IRS in April 2012 issued requests for comments on how to facilitate compliance with IRC §§ 6055 and 6056. ► http://www.irs.ustreas.gov/pub/irs-drop/n-12-32.pdf ► http://www.irs.ustreas.gov/pub/irs-drop/n-12-33.pdf http://www.dol.gov/ebsa/faqs/main.html http://www.dol.gov/ebsa/healthreform/ http://www.cms.gov/cciio/index.html http://www.healthcare.gov/ http://www.hhs.gov/partnerships/aca_act_and_community/index.html http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions


http://www.dol.gov/ebsa/faqs/main.html�

http://www.dol.gov/ebsa/healthreform/�

http://www.cms.gov/cciio/index.html�

http://www.irs.gov/�



http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions�

Thank you!

Presented by: Misty Baker [email protected]

800-880-7428

This update is based on the known provisions of the PPACA. This is not to be construed as legal or tax advice.


mailto:[email protected]�

the affordable care act 10 things you need to know. · what size employer does ppaca impact? get...

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