HealthCareReformReport Seminar

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  • I’m _______________ with the Alternative Board. We are your hosts today for this event – we truly hope you find the content stimulating and valuable. We are very pleased to have with us (bla bla from Samarai – you would have words for this) We have with us today a group of our current members and their employees, and we welcome them to the forum. We also have with us quite a number of you that are business owners, or service providers, who may or may not be very familiar with The Alternative Board. As such, I’d like to take a moment and share a bit of information about our organization.
  • In a nutshell, we are an organization dedicated to helping privately held business owners, CEOs, and general managers achieve higher levels of business and personal success. We promise our members three things: You will make better decisions You will take focused action Your situation will improve. We make a difference in the bottom line performance of over a hundred companies here in Chicago, and thousands across the US.
  • How do we do this? The core of our offering is the TAB board meeting – a group of non competing peer company leaders that meet monthly to work on, not in, their businesses. We also conduct monthly private coaching sessions, to ensure what gets discussed in the board meeting gets implemented. We bring to bear a number of proprietary tools to help owners. We hold educational sessions – today being a prime example And, our members are part of a broader resource network
  • We know this process works. It might be a great fit for you, or someone you know or work with. We are very open to having a conversation where we can both learn more. There is a one page flyer on the table with our contact information, or you can find one of our facilitators here. We do know that you came today because you want to improve your business, and that is what we are all about. With that in mind, we will get to our program shortly. But first, one thing you probably can’t get too much of is networking. So, lets take about 5 minutes, and I’d like you to find and introduce yourself and your business to a few people around you that you don’t know.
  • Change the math so it equals 2.90, add another ee.
  • Add example for tax credit vs deduct
  • Add example for tax credit vs deduct
  • Title, estimated medical services cost Source is the center for medicare and medicade services
  • Bill to give us an example of this.
  • Bill to give us an example of this.
  • Bill to give us an example of this.
  • Add sl
  • Add sl
  • HealthCareReformReport Seminar

    1. 1. Decoding Healthcare Reform: A Small Business Perspective Presented by & This presentation is provided with the understanding that the authors are not engaged in rendering legal, accounting, tax or other advice.  Any information contained herein is not intended to be used, and cannot be used, by you or any other person, for the purpose of avoiding penalties that may be imposed under federal laws.
    2. 2. Welcome <ul><li>Friday May 28 th </li></ul>Pheasant Run Hotel and Resort in St. Charles
    3. 3. The Alternative Board
    4. 4. Helping Businesses Achieve Greater Success <ul><li>Our three promises: </li></ul><ul><li>1. You will make better decisions </li></ul><ul><li>2. You will take focused action </li></ul><ul><li>3. Your situation will improve </li></ul>
    5. 5. What Is TAB? <ul><li>The TAB system includes: </li></ul><ul><li>Monthly board meetings </li></ul><ul><li>Executive coaching </li></ul><ul><li>Proprietary on-line tools </li></ul><ul><li>Business education </li></ul><ul><li>Resource network </li></ul>
    6. 6. How to Learn More <ul><li>Materials on the table w/ contact information </li></ul><ul><li>Talk with a facilitator </li></ul><ul><li>Check us out on the web </li></ul>
    7. 7. Rules For Today <ul><ul><li>Hold Questions Until the End </li></ul></ul><ul><ul><li>Detailed Hand-Outs at End </li></ul></ul><ul><ul><li>Take a Break on Your Own </li></ul></ul><ul><ul><li>Finish NLT 10AM </li></ul></ul><ul><ul><li>Panelists Will Stay Around Afterward </li></ul></ul><ul><ul><li>Current Analysis of Evolving Subject Matter </li></ul></ul>
    8. 8. Dave Gotsch Bill Finestone Gene Levin Presenters Lead Benefit Consultant Joseph M. Wiedemann & Sons Managing Partner Lipschultz, Levin & Gray, L.L.C. Senior Tax Manager Lipschultz, Levin & Gray, L.L.C. Panel
    9. 10. March 23, 2010 President Obama Signs the Patient Protection and Affordable Care Act (Healthcare Reform Bill) into law. March 23, 2010
    10. 11. Full Time Equivalent 2,080 hours earned per year Full Time Employee 30 or more hours earned per week Healthcare Reform: 101
    11. 12. Healthcare Reform: 101 Full Time Equivalent <ul><li>Total hours worked / number of employees </li></ul><ul><ul><li>Hours worked in excess of 2,080 are disregarded </li></ul></ul>Bob - 2,080 /yr Mary - 3,080 /yr Sue - 1,000 /yr Bruce - 880 /yr Hours Worked 2,080 /yr 2,080 /yr 1,000 /yr 880 /yr Hours Counted 6,040 / 2,080 = 2.90
    12. 13. Timeline 2010 2018 Taxes 2010 Benefits 2010
    13. 14. Timeline <ul><li>Increase in exclusion for employer-provided adoption assistance </li></ul><ul><li>Small employer health insurance tax credit </li></ul>Jan 2010
    14. 15. Timeline For the 2010 tax year , a qualified employer has 9 FTEs, with average annual wages of $23,000 per FTE. The employer pays $72,000 in health care premiums for those employees. The credit for 2010 equals $25,200 (35% x 72,000). Example Jan 2010
    15. 16. <ul><li>Breast Milk Expression Accommodation </li></ul><ul><li>Must provide reasonable break time </li></ul><ul><li>Must provide private location (not the bathroom) </li></ul><ul><li>Only applies to employers with over 50 FTEs </li></ul>Timeline March 2010
    16. 17. <ul><li>Dependents of employees remain on plan until age 26 </li></ul><ul><li>Prohibition of waiting periods exceeding 90 days </li></ul><ul><li>No pre-existing condition exclusions for persons under age 19 </li></ul><ul><li>Prohibition of lifetime maximums for essential benefits </li></ul>Timeline October 2010
    17. 18. <ul><li>Prohibition of Annual Maximums for Essential Benefits </li></ul><ul><li>Ambulatory patient services </li></ul><ul><li>Emergency services </li></ul><ul><li>Hospitalization </li></ul><ul><li>Maternity and newborn care </li></ul><ul><li>Mental health and substance use disorder services, including behavioral health treatment </li></ul><ul><li>Prescription drugs </li></ul><ul><li>Rehabilitative services and devices </li></ul><ul><li>Laboratory services </li></ul><ul><li>Preventative and wellness services </li></ul><ul><li>Chronic disease management </li></ul><ul><li>Pediatric services, including oral and vision care </li></ul>Timeline October 2010
    18. 19. <ul><li>Currently estimated cost per capita is $6,800 </li></ul><ul><li>Estimated cost in 5 years is $11,000 </li></ul>Timeline Estimated Medical Services Cost* *Center for Medicare and Medicaid Services October 2010
    19. 20. Timeline <ul><li>Uniform coverage determined by HHS </li></ul><ul><li>85% mandatory medical loss ratio with refund for large businesses </li></ul><ul><li>80% mandatory medical loss ratio for small business and individuals </li></ul><ul><li>Reporting requirements begin </li></ul>Jan 2011
    20. 21. Timeline <ul><li>W-2 Reporting of the value (cost) of employer sponsored health insurance coverage </li></ul><ul><li>Restrictions on using funds in a health FSA, HRA, HSA, or MSA for OTC medicines </li></ul><ul><li>10% additional tax on HSA and MSA withdrawals not used for medical expenses </li></ul><ul><li>New simplified cafeteria plan for small </li></ul><ul><li>businesses </li></ul>Jan 2011
    21. 22. Timeline <ul><li>Expanded information reporting </li></ul><ul><ul><li>Corporate Recipients </li></ul></ul><ul><ul><li>Includes Goods </li></ul></ul><ul><li>Estimated increase of 2.5 billion new 1099’s </li></ul><ul><ul><li>Example: who are you going to call at AT&T and where are you going to send it? </li></ul></ul>Jan 2012
    22. 23. Timeline <ul><li>Modification Notice </li></ul><ul><li>Employers must provide notice of any material modification to benefits 60 days before implementing those modifications. </li></ul><ul><li>Failure to comply will result in a fine on a per-enrollee basis </li></ul>March 2012
    23. 24. Timeline <ul><li>Large Employer Return </li></ul><ul><li>Begins June 30, 2013 </li></ul><ul><li>Employer must submit return to the secretary which contains: </li></ul><ul><li>- Name, date, employer ID number </li></ul><ul><li>- Certificate verifying offering of coverage </li></ul><ul><li>- Name, address, and SS# of each FTE </li></ul>June 2013
    24. 25. Timeline Additional .9% Medicare tax on wages/self- employment income of high earners Jan 2013
    25. 26. Timeline Linda works for ACME. She earns $100,000 and her husband Ted earns $210,000 at his job. Their combined wages of $310,000 are $60,000 over the $250,000 threshold for joint filers. However, ACME is not required to withhold any portion of the additional Medicare tax from Linda’s salary, since it is under $200,000. And Ted’s employer withholds the additional .9% tax only on $10,000 the earnings in excess of $200,000. Since their employers don’t withhold enough to cover all their additional Medicare tax liability, Linda and Ted should take the shortfall into account for estimated tax payment purposes. Jan 2013
    26. 27. Timeline 3.8% Medicare surtax on unearned income of higher income tax payers. Jan 2013
    27. 28. Timeline David is single and has a modified AGI of $230,000. Of that amount, $100,000 is net investment income. His liability for the unearned income Medicare contribution tax is $1,140 - 3.8% of $30,000, the amount of his modified AGI in excess of $200,000. Example 1 Jan 2013
    28. 29. <ul><li>Abby, a single taxpayer, has modified AGI of $310,000 and net investment income of $100,000. Her unearned income Medicare contribution tax is $3,800 - 3.8% of $100,000, the full amount of her net investment income, since that amount is less than $110,000 (the excess of modified AGI over $200,000, the threshold for her filing status). </li></ul>Example 2
    29. 30. Timeline <ul><li>$2,500 limit on annual health FSA contributions </li></ul><ul><li>10% floor on itemized medical expense deduction </li></ul><ul><li>Elimination of business deduction for certain retirees </li></ul>Jan 2013
    30. 31. Timeline <ul><li>Pre-existing condition exclusions eliminated </li></ul><ul><li>Discrimination as to benefits or coverage based on health status prohibited </li></ul><ul><li>Out of pocket expenses for enrollees capped </li></ul><ul><li>- $2,000 for single </li></ul><ul><li>- $4,000 for families </li></ul><ul><li>Must provide employees with notice of available state exchanges and federal subsidies </li></ul>Jan 2014
    31. 32. Timeline Out of Pocket Limits For HSA health plans - $5,950 for individuals - $11,900 for families Coverage for Clinical Trials Employers must provide coverage for clinical trials for life-threatening diseases. Jan 2014
    32. 33. Timeline <ul><li>Individual healthcare minimum essential coverage mandate/penalties/subsidies </li></ul><ul><li>Small employer health insurance tax credit (second phase) </li></ul><ul><li>Employer shared responsibility mandate/penalties </li></ul><ul><li>- $2,000 per employee (no coverage offered) </li></ul><ul><li>- $3,000 per employee who receives federal subsidy (coverage offered) </li></ul>Jan 2014
    33. 34. Timeline <ul><li>Employer A fails to offer coverage and has 100 full time employees, 10 of whom receive a tax credit for the year for enrolling in a state exchange offered plan. For each employee over the 30 employee threshold, the employer owes $2,000, for a total penalty of $140,000 (100 – 30 = 70 x $2,000). This penalty is assessed on a monthly basis. </li></ul>Example 1 (No Coverage Offered) Jan 2014
    34. 35. Timeline <ul><li>Employer has 100 full time employees and provides healthcare for them. 20 employees receive a premium tax credit from a state exchange plan. For 2014, the employer pays $3,000 x 20 employees = $60,000. The penalty cannot exceed the amount calculated if the employer did not offer coverage. </li></ul>Example 2 (Unaffordable Coverage Offered) Jan 2014
    35. 36. Timeline <ul><li>40% excise tax on high-cost health coverage </li></ul><ul><li>provided by employers </li></ul><ul><li>“ Cadillac” Plan (regardless who pays) </li></ul><ul><ul><li>>$10,200 for individual coverage </li></ul></ul><ul><ul><li>>$27,500 for family coverage </li></ul></ul><ul><ul><li>Assessed on the Insurance Company </li></ul></ul>Jan 2018
    36. 37. Tax Recap <ul><li>Increase in Medicare Tax </li></ul><ul><li>New tax on unearned income </li></ul><ul><li>New penalties on employers </li></ul><ul><li>Additional reporting requirements </li></ul>
    37. 38. Benefits Recap <ul><li>More coverage...more cost </li></ul><ul><li>HHS defining implementation </li></ul><ul><li>Finding alternative strategies </li></ul>
    38. 39.     BCBS Monthly Rates Employee Monthly Contribution Annual Salary at 7.99%           PPO   Plan 72323 Plan 72323   Single   $600 $150 $22,528 EE/Spouse   $1,165 $350 $52,565 EE/Child(ren)   $1,157 $347 $52,115 Family   $1,720 $516 $77,496
    39. 40. <ul><li>How many FTEs do I have? </li></ul><ul><li>What is the average salary of my employees? </li></ul><ul><li>Am I a large or small employer? </li></ul><ul><li>What percentage of my employees benefit costs do I cover? </li></ul><ul><li>How do the tax aspects of this bill affect me and my business? </li></ul><ul><li>How am I keeping up with the evolution of healthcare reform? </li></ul>Ask Yourself…
    40. 41. Questions? This presentation is provided with the understanding that the authors are not engaged in rendering legal, accounting, tax or other advice.  Any information contained herein is not intended to be used, and cannot be used, by you or any other person, for the purpose of avoiding penalties that may be imposed under federal laws.
    41. 42. This presentation is provided with the understanding that the authors are not engaged in rendering legal, accounting, tax or other advice.  Any information contained herein is not intended to be used, and cannot be used, by you or any other person, for the purpose of avoiding penalties that may be imposed under federal laws.

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