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Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
Obama care 2013 updated 3 7-13
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Obama care 2013 updated 3 7-13

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  • 1. ExpertQuote Insurance Services, Inc. HealthCare Reform: a.k.a. PPACA, ACA, ObamaCare IMPACT ON EMPLOYERS 2013 & Beyond By: Raj SinghExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 2. Disclaimer There are many parts of this legislation and a majority of the many specifics have yet to be worked out. Many are awaiting procedural guidelines from various government agencies. This document is intended for informational purposes only, and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice, and should not be construed as legal advice. In addition, this new law is expected have on-going updates. If you have any questions concerning your situation or the information provided, please consult with an attorney or an HR Professional. Guidelines and requirements are being updated on a weekly basis via press releases from HHS (Health Human Services). Effective dates are subject to the rules and regulations process both at the state and federal levels – which could alter the intended timing of implementation. Employers are encouraged to consult with their legal and tax advisors before acting on any information presented in following with this disclaimer.ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 3. (PPACA) (ACA) (Obamacare) ACA Act is the largest change to the American Medical landscape since 1965, when Medicare was implemented PPACA became law on March 23, 2010 What does Obamacare mean for your business? It depends – on the size of your work force, employee salaries, how much employees are required to contribute. For some firms the new mandates will lead to penalties for other firms nothing at allExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 4. How ACA Counts Employees Full Time: Any one person working 30 hours or more per work week for 120 days during a year or more Hour of service: Each hour for which an employee is paid or entitled to payment for the performance of duties, including vacation, leave, holiday, illness, incapacity, layoff, jury duty, military duty or other leave of absence Part –Time/ Variable Employee: Less then 30 hours a week A full-time equivalent is when part-time or seasonal employees equate to a full-time employee. Take total number of hours worked by non-full time employees during the month and divide by 120 All full-time equivalent employees within a Controlled Group or an Affiliated Service Group must be countedExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 5. Small Group - Large Group Defined Current 2013 2014-2015 2016 forward California Small Group 2-50 Small Group 1-50 Small Group 1-100 Large Group 51+ Large Group 51+ Large Group 101+ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 6. ACA Waiting Periods Timeframe Effective January 1, 2014 Small Group: California employers NOT to exceed 60 days Large Group: California employers NOT to exceed 90 daysExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 7. The Exchange In 2014 California Exchange will be up and running by Q4!!! Called “Covered California” for Individuals Individual making apx. $43,000 or family of four making $88,000 will be eligible for tax subsidies http://www.coveredca.com/ Exchange Called “SHOP” for Companies with 1-50 employees In 2016, SHOP will have plans available to Large Groups (firms with 100+ employees) Will the plans in the SHOP Exchange be a viable option? We do not have visibility yet. There will be more options outside the Exchange By Summer 2013 Employers must provide notice regarding California Exchange to employees & new hires : subsidy, employer penalty, etc…ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 8. Employer Tax Credits Annual average wages below $50,000 Pay at least 50% of the employee premium Must have fewer than 25 full-time equivalent employees Any shareholder with 2% or any owners of more than 5% not counted Current tax credit is 35% of business employees’ premiums (2010-2013) In 2014, tax credit increases to 50%, but only if insurance purchased via SHOP Not for Profit: 25% tax creditExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 9. Employer Tax Credits Employer claims the “tax credit” as part of general business tax credit and uses it to offset actual tax liability If no tax liability, may carry “tax credit” forward or back to offset tax liabilities for other years When claiming “tax credit”, employer may deduct insurance expenses on any tax return minus the amount of the “tax credit” “Tax credit” may be claimed for up to 6 years, if insurance purchased through “Exchange”, may claim “tax credit” for additional two years. (Commenced 2010)ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 10. Affordability & Dependents Employee Contribution must be 9.5% or less of their monthly/annual salary Calculation: Employer to take lowest compensated employee on the company- sponsored plan Employer must offer dependents opportunity to enroll in employer-sponsored planExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 11. Affordability: Plan Deductible & Out-Of-Pocket Maximums January 1, 2014 requirement Small group and non-grandfathered group plans may not: Impose annual deductibles greater than $2,000 for single coverage Impose annual deductible greater than $4,000 for family coverage Impose annual max-out-of-pocket greater than $3,100 for single coverage Impose annual max-out-of-pocket greater than $6,250 for family coverage Co-Insurance not to exceed 60% of benefits Employer may contribute accordingly to reduce such amounts Further guidance is expected to clarify this requirementExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 12. 2013 Requirements Flexible Spending Account Limits: limit amount employees can contribute to flexible spending account for medical expense to maximum $2,500 per year (this is half from current limit) IRS is considering some changes that would either minimize or do away with the “use-it- or-lose-it” rules wherein dollars left in a FSA are forfeited. As of today, no final rule has been issued as the IRS reviews comments solicited through August 2012. The $2,500 maximum does not apply to employer contributionsExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 13. Summary of Benefits & Coverage (SBC) SBC (Summary of Benefits Coverage) Employers to provide employees with a document provided by the carrier in a specific, standardized, government-approved format that further explains their plans in a simple manner Definitions of medical and health coverage Description of coverage, cost sharing, deductibles, co-insurance and co-payments, Must be provided to each participant and beneficiary for each benefit package offered Must be furnished within 90 days for newly-covered participants Provided at time of enrollment and/or if plan is amended Must be provided within 120 days for new plans Can be distributed electronically, SBC Penalty: $1,000 each personExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 14. Sample of SBCExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 15. Auto-Enrollment Provision Effective January 1, 2014 (either at that time or that year) Employers with 200+ full-time employees will be required to auto- enroll their full-time employees (those working 30 hours or more); employees can opt outExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 16. 2014 Employer Mandate Beginning in 2014, large employers may be subject to an excise tax/penalty if the employer: a) Offers coverage to full-time employees (and their dependents) that: 1) Does NOT meet the law’s affordability standard (employee’s cost for self-only coverage must not exceed 9.5% of family income), or 2) Coverage does not meet minimum-value standards b) Fails to offer any coverage to full-time employees and their dependents The penalty is triggered under situation (a) or (b) if at least one full-time employee whose household income is between 100% and 400% of the federal poverty level is able to qualify for, and receive, a premium tax credit for Exchange coverage.ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 17. 2014 Points & Employer Penalty Employer excluded on first 30 employees for this penalty (FTE = 30 hours or more per week) Employers are not required to offer coverage to part-time employees (those who work less than 30 hours per week, per month) even though they are part of the calculation to determine large group status Penalty consists of: Monthly penalty for employers who do not provide insurance is: (1/12) x $2,000 x ((number of full-time employees) – 30) Monthly penalty for employers who provide coverage (but coverage is not considered minimal essential coverage) is the lesser of: (1/12) x $3,000 x each full-time employee who receives a premium credit, or (1/12) x $2,000 x ((number of full-time employees) – 30)ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 18. Premium Variation – Community Rating Effective January 1, 2014 Risk Adjustment Factors (RAF) will not be taken into account Variation of premiums will be limited to : Age Bands: 0-20 age-band, 21-64 age band, 65+ age-band Family Size Geographic Area (California has 19 rating regions)ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 19. Informational IRS Reporting Annual Reports. Effective for January 1, 2014, employers (with 50 or more full-time employees) must file an informational return (due in 2015) in a form to be established by the Secretary of the Treasury containing: Employer’s name, employer identification number, and company waiting period ; Attestation whether or not the employer allows full-time employees (and their dependents) to enroll in minimum-essential coverage under an eligible employer- sponsored plan; Number of full-time employees for each month during the calendar year; Name, address, tax identification number, and the months of health plan coverage for each full-time employee during the calendar year; and Monthly premiums and lowest cost option. Note: The employer must provide employees a written report including the name and contact information for the person filing the return and the information required to be shown on the return.ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 20. W-2 Reporting Employers required to file 250 or more W-2 forms will be responsible for reporting to employees the total cost of their group health benefit plan coverage on their W-2 forms. Employers with less W-2’s may be required in near future--prepare now This requirement is effective with the 2012 W-2 forms distributed to employees in January 2013 (Box 12, Code DD) This amount includes both the employer-paid and employee-paid costs--regardless if employee paid via post-tax contributions This requirement is informational only and does not mean that employer-provided coverage will be subject to income tax (hmmm…) This requirement is only for the medical portion of the benefits plan Report employee annual premium, excluding any H.R.A. claims-funding expenditures 2013 year, reported on 2014 W-2 – Required for all employersExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 21. Who Pays for it?: Patient Centered Outcome Research Institute (PCORI) Fee For Policy years ending on or after October 1, 2012 with first fee due July 31st of 2013 Phasing out in 2019 The fee will be paid annually by July 31st on IRS form 720 For fully-insured health plans, the insurer pays the fee For HRA health plans, the plan sponsor pays the fee The fee will apply each plan year and is the average number of covered lives: October 1, 2012 and before October 1, 2013 = $1 fee (PEPY) October 1, 2013 and before October 1, 2014 = $2 fee October 1, 2014, going forward, fee will be increased based on medical inflationExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 22. Who Pays for it?: Taxes & FeesEffective in 2010:Annual tanning tax: 10% tax on indoor tanning services ($2.7 B)Effective in 2011:Annual pharmaceutical industry fee: Begins at $2.5 billon per year ($27 B)Effective in 2012:Annual medical device manufacturer fee: Excise tax of 2.3% on the sale of any taxable medical device($20 B)Effective in 2013:Annual Medicare tax on high earners and unearned income: 0.9% increase in payroll tax. Unearnedincome tax of 3.8% ($210.2 B)Effective in 2014:Annual insurer fee: Applies to fully-insured business ($60.1 B)Effective in 2018:Annual high-cost insurance tax: 40% excise tax on “Cadillac” plans ($32 B)ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 23. Who Pays for it?: The 3.8% Tax Effective 1-1-2013 This 3.8% unearned income tax applies to the lesser of: Net investment income, or The excess of Modified Adjusted Gross Income over the threshold $250,000 for married couples filing jointly $200,000 for individual $125,000 for married filing separatelyExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 24. Who Pays for it?: Limited Medical Deductions Effective 1-1-2013 Itemized medical expenses income tax deductions increases to 10% from 7.5% of AGIExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 25. Who Pays for it?: Individual Mandate Penalty 2014: Penalty is $95 per adult and $47.50 per child up to $285 per family or 1% of family income, whichever is greater 2015: Penalty is $325 per adult and $162.50 per child up to $975 per family or 2% of family income, whichever is greater 2016: Penalty is $695 per adult and $347.50 per child up to $2,085 per family or 2.5% of family income, whichever is greaterExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 26. Who Pays for it?: Medicare Tax Increase Medicare Tax Increase: High end wage earners will experience their first tax increase with ACA. Medicare tax on wages will increase by 0.9% (from 1.45% to 2.35%) on employee FICA earnings $250,000 married filing jointly $125,000 married filing separately $200,000 all othersExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh
  • 27. Will Premiums Continue To Rise? To fund several of the changes mandated by the Health Care Reform law: New fees will apply to health insurance issuers. The fees fund patient-centered outcomes research, the Transitional Reinsurance Program Premium tax subsidies for individuals in Exchanges Mandated medical plan enhancements: removal of Lifetime Plan Maximums and incorporating robust preventive care services at no cost to the employee Based on the government rule and industry analysis which anticipates an increase in premiums by about 3.8%. The government is also projecting as more individuals enter the insurance buying pool, that more buyers will help lower premiums for everyone EQ believes rates will continue to increase predominately because ACA has failed to address lifestyle and macro-issues that are the core inflation driver of medical premiums Healthcare fraud costs $180M per day Approximately 30% of the U.S. population or 70M are obese, and users of extensive medical services 10,000 Americans turn 65 every day, the senior population in the U.S. will reach 72M by 2030ExpertQuote Insurance Services, Inc. — Your Experts in Health & 401K™ © 2013 Confidential Raj Singh

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