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The Affordable Care Act- A Timeline of Provisions That Will Affect Your Business
 

The Affordable Care Act- A Timeline of Provisions That Will Affect Your Business

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In this timely webinar, presenter and G&A Partners expert Grace Jaen shares her timeline for provisions of the PPACA. Grace successfully completed the National Association of Health Underwriters ...

In this timely webinar, presenter and G&A Partners expert Grace Jaen shares her timeline for provisions of the PPACA. Grace successfully completed the National Association of Health Underwriters Health Care Reform Certification Course and is now a Certified Patient Protection and Affordable Care Act Professional.

Grace explains each provision, its date of implementation, and how it will affect American businesses.

At the end of the webinar, we also hosted a live Q&A session with Grace.

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    The Affordable Care Act- A Timeline of Provisions That Will Affect Your Business The Affordable Care Act- A Timeline of Provisions That Will Affect Your Business Presentation Transcript

    • Pa#ent  Protec#on  and  Affordable  Care  Act  (PPACA):  A  Timeline  of  Provisions  That  Will  Affect  Your  Business    Presented  by  Grace  Jaen,  G&A  Partners  
    • Disclaimer  •  This  is  the  interpreta#on  as  we  know  it  today  (2/28/2013),  and  is  subject  to  change.    •  In  general,  this  presenta#on  is  designed  for  regula#ons  and  requirements  that  are  specific  to  fully  insured  plans.    Self  Funded  plans  will  have  many  addi#onal  requirements.  
    • Agenda  •  Why  is  it  important  now?  •  What  has  already  happened?  •  What  this  means  for  small  group?  •  What  this  means  for  large  group?  •  Pay  or  Play  •  What  decisions  do  you  need  to  make  to  prepare?  
    • Why  so  much  focus  now?  •  It  wasn’t  repealed  •  Elec#on  •  The  #meline…employers  will  be  subject  to  ‘pay  or  play  provisions’  next  year    
    • Grandfathered  Plan  A  plan  that  was  in  place  on  March  23,  2010  If  you  have  made  any  changes  in  your  health  plan,  you  will  lose  this  status,  including:    •    Increasing  employee  contribu#ons  of  5%+    •  Change  deduc#ble  by  15%+  •  ANY  increase  in  EE  coinsurance  percentage  •  Increase  copayment  more  than  $5  or  15%  •  Eliminate  any  coverage  •  Reduces  annual  limits  Employer  is  responsible  in  providing  proof  and  disclosure  if  grandfathered  
    • 2010:  Small  Business  Tax  Credit  Qualifica#on:  •  Less  then  25  employees  •  Average  salary  <$50,000  •  Employer  pays  50%+  for  employee  only  coverage    Maximum  Credit  is  up  to  35%  of  what  the  employer  pays  •  Non  profits  are  eligible  (25%)    In  2014  •  Max  Credit  changes  to  up  to  50%  (35%  for  non  profits)  •  ER  must  par#cipate  in  the  exchange  •  You  may  not  get  credit  two  consecu#ve  years  
    • 2011:  MLR  •  Insurance  plans  required  to  comply  with  new  medical  loss  ra#os  (MLR):  80%  for  individual  and  small  group  plans  and  85%  for  large  group  plans.    •  Insurance  companies  are  required  to  pay  a  lump  sum  or  premium  holiday  for  rebates  •  What  can  an  employer  do  with  rebate?  •  If  employer  paid  100%,  the  employer  can  retain  it  •  If  employee  paid  ANY,  you  must  use  it  as  a  plan  asset  •  Distributed  to  par#cipants  •  Used  toward  future  par#cipants  
    • 2012:  Employer  Repor#ng  W2s  •  250+ processed W2s•  2012 tax year•  This value is not taxable•  Must include:•  Major medical•  Mini Med•  Onsite Medical Clinic•  Flex Cards•  EAP*•  Wellness Program**if subject to COBRA  
    • 2013:  Increased  Medicare  Tax  •  Increase  Medicare  tax  rate  on  wages  by  0.9%  (from  1.45%  to  2.35%)  on  earnings  over  $200,000  for  individual  taxpayers  ($250,000  for  joint  filers)  •  Employer  doesn’t  have  to  no#fy  employee  •  Employer  doesn’t  have  to  match  the  excess  tax  
    • 2013:  Employer  No#ce  of  Exchanges  •  March  1,  2013  (delayed)  •  Exchange:  Mechanism  for  individuals  or  groups  to  gain  access  to  health  care  financing  op#ons  through  a  program  administered  by  state  and/or  Federal  government.  •  Employers  are  required  to  no#fy  employees  that  exchanges  exist  and  that  they  may  be  eligible  
    • 2014:  Mandates  Everyone  must  have  insurance,  or  pay  a  penalty,  except:  •  Those  who  choose  not  to  buy  a  policy  for  religious  reasons  •  Undocumented  immigrants  •  Incarcerated  ci#zens  •  Members  of  Na#ve  American  tribes  •  Those  with  family  income  below  the  threshold  requiring  a  tax  return.      
    • 2014:  Mandate  Penal#es  The  penalty  for  non-­‐compliance  will  be  phased-­‐in  according  to  the  following  schedule:  •  2014:    $95  (or  1%  of  income,  whichever  is  higher)    •  2015:  $325  (or  2%  of  income)    •  2016  :$695  (or  2.5%  of  income)    •  2017  Forward:      the  penalty  will  be  increased  annually  by  the  cost-­‐of-­‐living  adjustment.    
    • Where  will  they  get  insurance?  •  Employer  •  Large  Employers  are  subject  to  a  penalty  for  not  providing  coverage  •  Medicaid/Chip  /Medicare/Tricare  •  Exchange  •  To  receive  exchange  subsidy,  you  must  not  have  an  affordable  op#on  through  your  employer  (9.5%  of  EE  coverage)  
    • PPACA  Large  Employer  What  is  considered  as  a  large  employer?  W2  Compliance  in  2012  tax  Year   250+  W2’s  processed  2014  Eligibility  to  par#cipate  in  SHOP  exchange   100+  Employees  are  not  eligible  Automa#c  Enrollment   200+  Full  Time  Equivalent  Pay  or  Play   50+  Full  Time  Equivalent  Plan  Limits   50+  Full  Time  Employees  Employer  Repor#ng   100+  Full  Time  Employees  
    • Employer  Tax:  What  is  a  Large  Employer?  •  50+  Full  Time  Equivalent  Employees  •  Excludes  Seasonal  workers  •  Full  Time  is  considered  30  hours/week  •  A  PEO  does  NOT  affect  your  size  as  an  employer  •  Common  Ownership  DOES  affect  your  size  as  an  employer     0-­‐20%  • Rarely  found  to  have  common  ownership  20-­‐50%  • Assumed  to  not  have  common  ownership  • Burden  on  the  employer  to  show  why  there  is  common  ownership  50-­‐80%  • Assumed  to  have  common  ownership  • Burden  on  employer  to  show  why  there  is  NOT  common  ownership  80-­‐100%  • Common  Ownership  
    • Calcula#ng  FTE  •  Example:  •  35  Full  Time  Employees  •  42  Part  Time  Employee  working  20  hours  a  week  •  #  of  PT  Employees  X  #  of  Hours/Week  X  4  /120  •  42  PT  Employees  X  20  hrs/wk  *  4  /  120  =  28  •  35  FT  +  28  FTE  =  63  FTE    
    • What  are  the  penal#es?  •  Pay:    •  $2,000  Per  Full  Time  Employee  minus  the  first  30  •  This  is  a  monthly  payment  •  Play:  •  $3,000  per  Full  Time  Employee  who  par#cipates  in  the  exchange  and  receives  a  subsidy  or  above  (whichever  is  lower)  
    • Affordability  Safe  Harbor  •  If  Employee  Only  Coverage  on  base  plan  is  less  than  9.5%  of  income,  employer  will  be  safe  harbored  against  affordability  penalty  •  Example:    •  If  Jane  makes  $10/hr  and  works  30-­‐40  hours  a  week  
    • 2014:  Employer  Penalty    Are  you  a  large  employer?  -­‐at  least  50  full-­‐#me  equivalent  workers  -­‐including  FT  and  PT  workers  -­‐excluding  seasonal  workers  (up  to  120  days  per  year)    Are  Any  of  your  full-­‐:me  employees  in  an  exchange  plan  and  receiving  a  premium  credit?  Do  you  have  more  than  30  full-­‐:me  employees?  Do  you  provide      health  insurance?  Pay  Monthly  penalty,  lesser  of:  1/12  x  $2000  x  (number  of  full-­‐#me            employees  –  30)  or  1/12  X  $3,000  x  (#  FTEs  who  receive  credits  for  exchange  coverage)  Pay  monthly  penalty  of  1/12  x  $2,000  x  (number  of  full-­‐#me  employees    -­‐    30)  No  Penalty  No  Penalty  No  Penalty  yes  no  yes  no  yes  no  yes  no  
    • Small  Employers  •  Does  this  really  have  a  financial  impact  on  small  businesses?  •  Will  you  lose  employees  by  not  offering  insurance?  •  Will  you  have  a  harder  #me  recrui#ng  employees?  
    • Plan  Limits  •  Deduc#bles:  •  $2,000  Individual  •  $4,000  Family  Unit  •  Out  of  Pocket  Maximums:  •  $6,250  Individual  •  $12,500  Family  Unit  
    • Employer  Repor#ng  •  6055:  Enforcement  of  Individual  Mandate  •  Name,  address,  tax  payer  ID  •  Individual  informa#on  and  dates  of  coverage  •  If  it  is  a  qualified  plan  •  ”other  informa#on  HHS  requires”  •  6056:  Large  Group  Repor#ng  •  Monthly  Premiums  (employee  contribu#on)  •  #  of  FT  employees  by  month      
    • Variable  Employee  •  If  it  can  not  be  determined  if  an  employee  is  reasonably  expected  to  work  30+  hours/week  •  Employer  would  calculate  each  employee’s  status  by  looking  back  at  a  measurement  period  •  Must  remain  eligible  for  the  stability  period  
    • Variable  Employee  
    • 2014:  Other  Provisions  •  Wai#ng  Periods  •  <90  days    •  Automa#c  Enrollment  •  Employers  with  200+  FTE  •  Employees  may  opt  out    
    • Beyond  2014  •  Large  Employers  (100+)  may  par#cipate  in  the  exchange  (2017)  •  Cadillac  Tax  (2018)  •  40%  Excise  tax  for  plans  that  exceed:  •  $10,200  for  individual  coverage  •  $27,500  for  family  coverage  •  It  will  be  adjusted  for  infla#on  
    • What  should  you  do  to  prepare?  •  Small  Employer  •  Am  I  going  to  keep  coverage?  •  What  plan  design  changes  will  I  make  to  prepare  for  2014  plan  limits?  •  Will  I  have  issues  recrui#ng  and  retaining  employees  if  I  don’t  offer  coverage?  •  Do  I  want  to  grow?  
    • Large  Employer  Considera#ons  •  Am  I  going  to  cut  hours?  •  What  dollar  figure  is  my  safe  harbor  for  affordability?      •  Will  I  change  my  contribu#on  strategy?  •  If  I  decide  to  ‘pay’,  will  I  have  a  harder  #me  recrui#ng  and  retaining  employees?  
    • Ques#ons?  Please  send  all  ques#ons  and  comments  to  info@gnapartners.com