Health Care Reform (Bill Copy) Hr 3590


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Presentation given a number of times to different groups...most recently to the California Moving and Storage Association in Lake Tahoe.

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Health Care Reform (Bill Copy) Hr 3590

  1. 1. Health Care Reform: Understanding your most expensive new hire… (HR 3590: The Protection and Affordable Care Act of 2010) Bill Hammett Barlocker/Leavitt Insurance Services & President of San Diego Assoc. of Health Underwriters
  2. 2. How did we get here? <ul><li>‘ Health Care’ cost increases </li></ul><ul><li>‘ Health Insurance’ rate increases </li></ul><ul><li>Under-Insured </li></ul><ul><li>Un-Insured </li></ul>email a question now to:
  3. 3. Pressure for Reform <ul><li>Campaign for President </li></ul><ul><li>Party Politics </li></ul><ul><li>Failure, not an option </li></ul>email a question now to:
  4. 4. The New Law <ul><li>House Bill </li></ul><ul><li>Senate Bill </li></ul><ul><li>Reconciliation </li></ul><ul><li>Like it or not…It’s the Law </li></ul>email a question now to:
  5. 5. What does this mean to me? <ul><li>Effects on Employer? </li></ul><ul><li>Effects on my Employees? </li></ul><ul><li>How much is it going to cost me? </li></ul><ul><li>What do I have to do? </li></ul>email a question now to:
  6. 6. HR 3590…An Outline <ul><li>Details are few </li></ul><ul><li>General Provisions </li></ul><ul><li>Basic Timelines </li></ul><ul><li>All subject to Change </li></ul>email a question now to:
  7. 7. What DO We Know?
  8. 8. Grandfathered Plans <ul><li>Plans in place on March 23, 2010 </li></ul><ul><li>If my Employer makes even a simple change in their plan, does it lose Grandfathered status…stay tuned </li></ul><ul><li>Enrollees and new dependents added on are NOT Grandfathered </li></ul>email a question now to:
  9. 9. Small Business Tax Credits <ul><li>Begins with the 2010 Tax Year </li></ul><ul><li>Credit on Business’ Annual Tax Return </li></ul><ul><li>Retro tax credit to January 2010 </li></ul>email a question now to:
  10. 10. Tax Credits- Who is Eligible <ul><li>Small Business only </li></ul><ul><li>Less than 25 Full Time Employees (FTE’s) </li></ul><ul><li>Income ‘average’ less than $50K per FTE </li></ul><ul><li>Owners & Families excluded from Calculation </li></ul>email a question now to:
  11. 11. Tax Credit - Guidelines <ul><li>Only Premium paid by the Employer is eligible for the Credit </li></ul><ul><li>Employer must pay a minimum of 50% of EE premium. </li></ul><ul><li>Premium counted toward Credit may not exceed an ‘average premium’ as set by HHS </li></ul>email a question now to:
  12. 12. Tax Credit - Amounts <ul><li>2 – 9 FTE’s </li></ul><ul><ul><li>Income average less than $25K per FTE </li></ul></ul><ul><ul><li>Maximum Credit: 35% </li></ul></ul><ul><li>10 – 24 FTE’s </li></ul><ul><ul><li>Income average less than $50k peer FTE </li></ul></ul><ul><ul><li>Credit varies based on a ‘reduction formula reducing from the Maximum Credit of 35% </li></ul></ul>email a question now to:
  13. 13. MediCare Part D <ul><li>2010 $ 250 Rebate Check ($3,600) ? </li></ul><ul><li>2011 50% Reduction of the ‘Donut Hole’ </li></ul><ul><li>2020 Elimination of the ‘Donut Hole’ </li></ul>email a question now to:
  14. 14. Expansion of Child Coverage <ul><li>Begins October 1, 2010 </li></ul><ul><li>All Group & Individual Plans, including Self Insured </li></ul><ul><li>Through age 25 up to age 26 </li></ul><ul><li>Dependents may be Married and even live elsewhere </li></ul><ul><li>Covers only the Dependent, not Spouse or Children </li></ul>email a question now to:
  15. 15. Maximum Benefit Limits <ul><li>Begins 2010 </li></ul><ul><li>Lifetime Benefit Limits will be prohibited </li></ul><ul><li>Annual Benefits may remain for now </li></ul>email a question now to:
  16. 16. High Risk Pools <ul><li>Begins in 2010 </li></ul><ul><li>Creates or Funds Pools </li></ul><ul><li>Will end in 2014 when Exchanges are operational </li></ul><ul><li>Financed by a $5 Billion appropriation </li></ul>email a question now to:
  17. 17. Various Provisions <ul><li>Begin 2010 </li></ul><ul><li>Children not subject to Pre-Ex </li></ul><ul><li>All Group & Indv plans must treat ‘Emergency services’ as In-Network regardless of Provider </li></ul><ul><li>Employees may designate any network doctor as their PCP </li></ul><ul><li>Federal Grant program for small Employers offering Wellness programs </li></ul>email a question now to:
  18. 18. Rate Review <ul><li>Begins 2010 </li></ul><ul><li>HHS – Prevent ‘unreasonable’ rate increases </li></ul><ul><li>Pattern of ‘unreasonable increases </li></ul>email a question now to:
  19. 19. 2011 Provisions <ul><li>Employer sponsored premiums on W-2 </li></ul><ul><li>Prohibits ‘OTC’ drug reimbursements from FSA’s, HSA, HRA </li></ul><ul><li>Penalties for HSA non-qualified withdrawals increase from 10% to 20% </li></ul><ul><li>New Public LTC Program </li></ul>email a question now to:
  20. 20. 2013 Provisions <ul><li>New cap on ‘Medical’ FSA contributions of $2,500 annually </li></ul><ul><li>MediCare Hospital Tax: </li></ul><ul><ul><li>1.45% to 2.35% for high income earners </li></ul></ul><ul><ul><li>New 3.8% Tax on net investment income </li></ul></ul><ul><li>Both: $200k Indvl / $250K Joint </li></ul>email a question now to:
  21. 21. Exchanges <ul><li>Begins 2014 </li></ul><ul><li>Requires States to create an Exchange for Individuals </li></ul><ul><li>A ‘SHOP’ Exchange for small Groups </li></ul><ul><li>Or may combine into one Exchange </li></ul><ul><li>In 2017 states may allow 100+ groups to buy through the Exchange </li></ul>email a question now to:
  22. 22. Market Reforms <ul><li>Begins 2014 </li></ul><ul><li>Guarantee Issue in all markets </li></ul><ul><li>No Pre-Ex </li></ul><ul><li>No Annual Benefit Limits </li></ul><ul><li>Waiting Periods may not exceed 90 days </li></ul><ul><li>Low income subsidies begin – Affordability Credits up to 400% of FPL </li></ul><ul><li>Redefines Small Group as 1-100 </li></ul>email a question now to:
  23. 23. Rating Methods <ul><li>Begins 2014 </li></ul><ul><li>Individual & Group – Strict modified community rating standards </li></ul><ul><li>Premium variations allowed only for: Tobacco(50%), Family, Geography </li></ul><ul><li>Premium Ratio: 3/1 </li></ul>email a question now to:
  24. 24. Insurer Fees <ul><li>2014 $ 8 Billion </li></ul><ul><li>2018 $ 14.3 Billion </li></ul>email a question now to:
  25. 25. Benefit Requirements <ul><li>Begins 2014 </li></ul><ul><li>Sets Minimum Benefit packages </li></ul><ul><li>Multiple benefit Levels are established </li></ul><ul><li>Allows ‘catastrophic only’ policies for those 30 and younger </li></ul>email a question now to:
  26. 26. Deductible Maximum <ul><li>Begins 2014 </li></ul><ul><li>Deductible cannot exceed: </li></ul><ul><ul><li>Individual: $ 2,000 </li></ul></ul><ul><ul><li>Family: $ 4,000 </li></ul></ul>email a question now to:
  27. 27. Individual Mandate <ul><li>Begins 2014 </li></ul><ul><li>Requires all American Citizens and Legal Residents to buy qualified coverage </li></ul>email a question now to:
  28. 28. Individual Mandate - Exclusions <ul><li>Religious objectors </li></ul><ul><li>Those not lawfully present </li></ul><ul><li>Incarcerated individuals </li></ul><ul><li>Members of Indian Tribes </li></ul><ul><li>Taxpayers under 100% of FPL </li></ul><ul><li>Those with No tax liability </li></ul><ul><li>Those who were not covered for ‘less than 3 months’ </li></ul>email a question now to:
  29. 29. Individual Penalties <ul><li>2014 Lesser of 1 % of Income or $ 95 </li></ul><ul><li>2015 Lesser of 2 % of Income or $ 325 </li></ul><ul><li>2016 Lesser of 2.5% of Income or $ 695 </li></ul><ul><li>Child(ren) 50 % of Adult penalty </li></ul>email a question now to:
  30. 30. Employer Mandate <ul><li>Begins 2014 </li></ul><ul><li>Applies to Employers of 50+ </li></ul><ul><li>Don’t have to provide coverage </li></ul><ul><li>PTE’s don’t need to be covered (-30hrs) </li></ul><ul><li>If even 1 employee receives a subsidy and buys coverage through the Exchange the Employer will face penalties </li></ul>email a question now to:
  31. 31. Employer Issues <ul><li>Employer Penalty: </li></ul><ul><ul><li>‘ Free Riders’ </li></ul></ul><ul><ul><li>Only Employers 50+ </li></ul></ul><ul><ul><li>$2000 per FTE x 1/12 per month </li></ul></ul><ul><ul><li>Minus 30 employees (Deductible) </li></ul></ul><ul><li>SIMPLE…. </li></ul>email a question now to:
  32. 32. Employer Vouchers <ul><li>Begins 2014 </li></ul><ul><li>Notification to Employees about the Exchange begins March 1, 2013. </li></ul><ul><li>Employers must issue Vouchers in the amount they contribute now, to employees who wish to buy through the Exchange </li></ul><ul><li>Only to Employees under 400% of FPL </li></ul><ul><li>Educate the Employees on the differences between their coverage and the Exchange </li></ul><ul><li>Employees may ‘keep the change’… </li></ul>email a question now to:
  33. 33. Auto Enrollment <ul><li>Begins 2014 </li></ul><ul><li>Employers with 200+ </li></ul><ul><li>Must ‘enroll’ all new hires </li></ul><ul><li>Must allow Employees to ‘opt out’ </li></ul>email a question now to:
  34. 34. Cadillac Tax <ul><li>Begins 2018 </li></ul><ul><li>Meant as a Revenue builder </li></ul><ul><li>40% Excise Tax </li></ul><ul><li>Individuals: $10,200 </li></ul><ul><li>Families: $27,500 </li></ul>email a question now to:
  35. 35. Potential Scenarios <ul><li>June 2010 Election – Prop 14 !!! </li></ul><ul><li>November 2010 Congressional Elections </li></ul><ul><li>November 2012 Presidential Election </li></ul><ul><li>Political Movement within America & California </li></ul>email a question now to:
  36. 36. What happens next… <ul><li>Not much detail yet </li></ul><ul><li>Changes will be made </li></ul><ul><li>New information learned and applied </li></ul>email a question now to:
  37. 37. Questions? <ul><li>Contact information: </li></ul><ul><li>[email_address] </li></ul><ul><li>(800) 829-0807 x 319 office </li></ul><ul><li>(619) 252-3735 cell </li></ul>