Affordable Health Care Act


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Every business owner, regardless of their size needs to understand the affordable health care laws (Obama Care). This presentation was presented by Todd Gordon to customers of The Virtual HR Director in May 2013. New presentations will be delivered as the law becomes clear.

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Affordable Health Care Act

  1. 1. T O D D E . G O R D O N , R H U P R E S I D E N T , T H E B E N E F I T S G R O U P , I N C . N A H U C E R T I F I E D P A T I E N T P R O T E C T I O N A N D A F F O R D A B L E C A R E A C T ( P P A C A ) P R O F E S S I O N A L Health Care Reform: Impact on You & Your Business
  2. 2. The Individual Mandate  What are my options? 1. Employer-sponsored coverage 2. Individual coverage  Individual market exchange  „Off „ exchange 3. No coverage – pay the penalty
  3. 3. The Public Exchange/Marketplace  Individuals who buy a policy from the public exchange may be eligible for credits and subsidies  Income range from 133% to 400% Federal Poverty Level (FPL)  Individual: $14,856 to $44,680  Family of four: $30,6565 to $92,200  Not have access to minimum essential coverage through their employer or have access to coverage, but it is not affordable  Premium Credits – for any level plan  Cost-Sharing Subsidies – Silver Plan only  Public exchange open enrollment begins 10/1/13
  4. 4. No Coverage – Penalties for Individuals  2014  Greater of $95 or 1% of taxable income  2015  Greater of $325 or 2% of taxable income  2016  Greater of $695 or 2.5% of taxable income  2017 and beyond  Annual adjustments
  5. 5. Essential Health Benefits  Applies to:  Individual & Small Group plans  Non-grandfathered plans: On and off exchange  Does not apply to:  Large Group and ASO plans  Grandfathered plans  Benchmark plan:  Each state will select for the purposes of defining EHBs
  6. 6. Essential Health Benefits  Ambulatory patient services  Emergency services  Hospitalization  Laboratory services  Maternity & newborn care  Mental health & substance abuse disorder services  Pediatric services, including oral & vision care  Prescription drugs  Preventive & wellness services and chronic disease management  Rehabilitative and habilitative services and devices
  7. 7. Reform Related Taxes & Fees What When Who Pays How Much Comparative Effectiveness Research Fee Plan/policy years ending 10/1/2012 Insurers of fully insured plans; sponsors/administrators of self-insured plans $1 per person per year; adjusted for subsequent years Reinsurance Assessment 1/1/2014 Issuers of fully insured plans Estimated at $5.25 per person per month Tax on high earners Tax year beginning 1/1/2013 Individuals .9% increase on Medicare, in excess of $200k single/$250k married Tax on unearned income Tax year beginning 1/1/2013 Individuals 3.8% on unearned income in excess of $200k single/$250k married Insurer Fees Tax year beginning 1/1/2014 Issuers of fully insured plans Estimated at 2.46% of premium, plus state fee High-cost insurance tax Tax year beginning 1/1/2018 Insurers of fully insured plans; sponsors/administrators of self-insured plan 40% on plan costs exceeding “Cadillac” thresholds
  8. 8. What About Rates in 2014?  Most significant changes will be in markets for individuals and small employers  Rating constraints  Product constraints  Benefit mandates  New taxes  Studies & Carrier Reports  Forecasting a wide range of impact
  9. 9. Options for Small Businesses Employers who have less than 50 employees:  Offer a fully insured plan through either:  SHOP Exchange (full implementation has been delayed)  The off-exchange market  Offer an ASO (administrative services only)  Self-funded  Stop offering coverage  Employees go to exchange  Offer “non-affordable” coverage  Employees go to exchange
  10. 10. Options for Large Employer  Employer Shared Responsibility Penalty  If a “large” employer does not offer “minimum essential” health benefits to their full-time employees, they may be required to pay a penalty  If a plan is offered, but it does not meet the coverage levels required, they may be required to pay a penalty  If a plan is offered, but “unaffordable”, they may be required to pay a penalty
  11. 11. Employer “Play or Pay” Mandate  Employers with 50+ employees who DO NOT offer coverage:  At least 1 employee obtains subsidized coverage from health insurance exchange  Fee equal to $2,000 X the number of full-time employees minus the first 30 employee  Employers with 50+ employees who DO offer coverage, but coverage is not “affordable”  Assessment of $3,000 X the number of employees receiving subsidized coverage  “Affordable” defined as employee‟s share of the premium is greater than 9.5% of income for employee only coverage
  12. 12. Large Employer Considerations  Calculating the number of full-time and full-time equivalent employees (FTEs)  Aggregation of common ownership  Automatic Enrollment for employers with 200+ FTEs – delayed for 2014  Minimum essential coverage  Plan coverage must provide minimum value at least 60% of the total allowed cost of benefits that are expected to be incurred under the plan  HHS/IRS will provide a calculator to determine minimum value
  13. 13. Questions Todd E. Gordon, RHU President, The Benefits Group, Inc. NAHU Certified Patient Protection and Affordable Care Act (PPACA) Professional (770) 455-3446 ext. 207 www.