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Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013
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Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013

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http://bit.ly/18aLNUZ

Health Care Reform: Making Informed Decisions in Uncertain Times - April 2013

Health Care Reform is a Transformative Event. Health Care Reform will change the way healthcare is paid for, delivered and consumed in the United States over the next 20-30 years, impacting every employer, person residing in the United States and health care provider. The subject of the Affordable Care Act is the healthcare delivery system in the United States. The law is designed so more people receive health insurance coverage. Since many people are covered through employers, the Affordable Care Act has an enormous effect on employers.

At the outset, many financial professionals might ask…”Why should I care about Health Care Reform, unless my organization is within the healthcare industry? From an employer’s perspective, isn't this just about benefits and HR?”

In fact, Health Reform has the potential to:

-Fundamentally change the way companies recruit, retain, and reward their people.
-Drive major investments in HR IT and HR Administrative Practices
-Alter risk management practices, and renew focus on HR compliance
-Bring HR and Finance Teams together more closely

As a side note, health care reform will also re-direct consumer dollars away from discretionary spending, in order to pay for health premiums.

In short, Health Care Reform is creating a period of financial uncertainty for large companies, as they think through and identify how to comply with legislative requirements taking effect from now through 2018.

By understanding the sources of that uncertainty and taking action to mitigate its impact, CFOs can help to minimize the risks and costs associated with these changes.

And as a side note, ADP has health benefits administration expertise and insights that can help (based, in part, on aggregated client data and experience); the purpose of this presentation is to share those insights with you.

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  • Before we get started I need to remind all listeners that the purpose of today’s webcast is for informational purposes only and is not intended as legal or tax advice. Neither ADP nor Freeman Health System practice law or dispense legal advice. We encourage all listeners to retain qualified legal counsel prior to implementation of any significant changes to Human Resource and Health Benefit policies and practices within their firms.
  • Health Care Reform is a Transformative Event. Health Care Reform will change the way healthcare is paid for, delivered and consumed in the United States over the next 20-30 years, impacting every employer, person residing in the United States and healthcare provider. The subject of the Affordable Care Act is the healthcare delivery system in the United States. The law is designed so more people receive health insurance coverage. Since many people are covered through employers, the Affordable Care Act has an enormous effect on employers.
  • At the outset, many financial professionals might ask…”Why should I care about Health Care Reform, unless my organization is within the health care industry? From an employer’s perspective, isn’t this just about benefits and HR?”In fact, Health Reform has the potential to:Fundamentally change the way companies recruit, retain, and reward their people. Drive major investments in HR IT and HR Administrative PracticesAlter risk management practices, and renew focus on HR complianceBring HR and Finance Teams together more closelyAs a side note, health care reform will also re-direct consumer dollars away from discretionary spending, in order to pay for health premiums. In short, Health Care Reform is creating a period of financial uncertainty for large companies, as they think through and identify how to comply with legislative requirements taking effect from now through 2018. By understanding the sources of that uncertainty and taking action to mitigate its impact, CFOs can help to minimize the risks and costs associated with these changes. And as a side note, ADP has health benefits administration expertise and insights that can help (based, in part, on aggregated client data and experience); the purpose of this presentation is to share those insights with you.
  • Income is a significant predictor of participation in health benefits today, and will likely remain so in 2014.Newly eligible employees may have unique concerns and educational needs compared to traditional eligible employeesSome low income employees who do not participate in health benefits today, may resist doing so in the future, based upon affordability and need Longer term, IRS tax penalties to individuals who do not maintain adequate health coverage may change participation rates—these penalties will be phased in between 2014 and 2016.
  • The 2018 Excise Tax is a potential sleeping giant for some employers. In essence, if the sum total of all employer and employee pre-tax premiums for health coverage exceed a specific threshold, the employer could be subject to a 40% excise tax on the amount of excess benefit. This tax is calculated on a per employee basis, rather than on the overall population. However, the employer does not have any direct means to pass the excise tax back to employees. In a worst case scenario, the excise tax could cost millions of dollars to an unsuspecting employer. So which employers need to worry about this? Here are a few criteria:Location in high cost statesHealth Plans with low co-pays / deductiblesAging workforce / presence of chronic conditionsLimited tools/emphasis on preventive healthNo controls for cost / quality review—especially for catastrophic casesIt’s interesting to note that many not-for-profits, public sector employers, and religious organizations offer rich health benefits, often in lieu of competitive salary. The excise tax will fall particularly hard on these groups.
  • Shared Responsibility is the most significant and complex ACA provision that is going to affect employers in 2014. Shared Responsibility really touches on all five of the strategies we just discussed. Employers need to evaluate the requirements and the costs of providing coverage to all full-time employees and then make the decision as to whether they are going to “PLAY” or “PAY.” Will they play and continue offering healthcare coverage to their full-time employees (must be minimum essential coverage) or will they pay? Considerations include the financial impact, as well as the impact to employee engagement, morale, and your company’s strategies to recruit and retain top talent. Even if you decide to play, you still could be subject to penalties if your coverage is not affordable (determine whether any employees have to pay more than 9.5% of their household income (safe harbor is provided to review employees’ W-2 wages; rate of pay or Federal Poverty Level) for the coverage your company offers) and does not provide minimum value (designed to pay, on average, at least 60% of participants’ covered medical expenses; equal to a bronze level plan on the Exchange).While making these decisions, employers need to consider the economic demographics of their employee population and what impact that will have on the affordability of the coverage you offer.
  • Let’s take a look at some key questions we recommend employers ask themselves to help you prepare for the details of the Shared Responsibility requirements. Is your company a “large” employer? How many employees do you have with 30 or more hours of service per week or 130 hours of service per month? We will discuss what constitutes a "large" employer and how to determine full-time status in just a moment. Do you have any seasonal employees? More guidance is expected on what constitutes a seasonal employee, but for now a good-faith interpretation of existing DOL guidance will suffice.Under the Shared Responsibility rules, which of your employees are now eligible for healthcare coverage? Is this a larger number than in the past? What types of positions are newly eligible for healthcare coverage? Are these positions for which you would have offered benefits in the past? What are your turnover rates? What effect will this have on ongoing eligibility for healthcare coverage? Will your company decide to play and offer healthcare coverage?If you don’t offer coverage, will your company still be seen as an employer of choice? Are other employers in your geography/industry offering coverage or opting out?
  • Determine who will certainly work 30 hours per week or more and who will certainly work fewer than 30 hours per week. These employees can be removed from consideration because you know for certain whether you will need to offer healthcare coverage or not to these employees.Which employees are on the bubble? Determine which employees you cannot tell with certainty the number of hours these employees will work per week on average. Consider how often will these employees' hours vary. Will they work 30 hours per week on average or is there no way of telling at the outset? Are your seasonal employees, if any, expected to work for more than 4 calendar months? Determine the affordability of the coverage you intend to offer. The regulations provide that, to be affordable, the cost of coverage must be less than 9.5% of the employee's household income, but the agencies have provided a safe harbor for employers to use the employee's current box 1, W-2 wages as a basis of determination. There are additional safe harbors that are available as well, such as ones based on an employee’s rate of pay, or the federal poverty level.
  • Base focuses on acquiring the best skills within labor market, and the retention of knowledge and experience.Variable aligns personal behavior with individual / shared objectivesBenefits creates a sense of belong, shared risk, shared purpose
  • Wellness rollout in stages, incenting behavior, ees need to understand what’s happening – stats not a “gut” feeling…what are the real trends. How does CDHP, Spending Accounts, Wellness all play together. Employees…more accountability.
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