Navigating health reform webinar


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Navigating health reform webinar

  1. 1. Keep the conversation going: @dominionsystems @GravesandCoIns Navigating Health Reform: Then, Now, and Tomorrow We will begin at 1pm EST Use the chat feature to ask questions! #ACA
  2. 2. Software company that helps businesses with their payroll, time & attendance, and human resource management. Dominion provides an integrated web-based solution that allows businesses to run more efficiently.
  3. 3. Specializes in insurance benefits for individuals and employers from 2 employees and up. For employer groups, Graves & Company provides health, life, disability, vision, and voluntary/worksite insurance.
  4. 4. Matt Graves Benefit Specialist & Certified Patient Protection and Affordable Care Act Professional Contact Matt: Linkedin:
  5. 5. To help you understand the Affordable Care Act and how it impacts you
  6. 6. Agenda History Timeline Changes and Delays Individual Mandate Federal Poverty Level Guidelines Taxes and Fees Small Employer Groups and Health Reform Large Employers and the Employer Mandate
  7. 7. PPACA Legislatively known as the ‘Patient Protection and Affordable Care Act’ (PPACA), but also referred to as Health Reform, Health Care Reform, Affordable Care Act, and Obamacare. – Signed into law by President Obama on March 23, 2010
  8. 8. 2010 to 2011 • Eligibility option to remain on parents health insurance coverage until age 26. • Medical underwriting prohibited for children under the age of 19. • Implementation of ‘no cost’ preventative care visit requirement. • New limitations on usage for HSA, FSA, and Health Reimbursement arrangements. • New fee on pharmaceutical manufacturers. • Introduction of Medical Loss Ratio limitations.
  9. 9. 2012 to 2013 • Required distribution of Summary of Benefits and Coverage (SBC), provided by carrier. • Medical device ‘sales tax’ begins • Employers to begin reporting value of benefits of employee W- 2’s. • Employers required to inform all employees of exchange access and insurance availability through • Pre-tax contributions to FSA limited to $2,500 annually.
  10. 10. 2014 to 2015 • Guarantee issue for all fully- insured plans (group and individual); elimination of pre- existing condition clauses (fully- insured plans). • Essential Health Benefit requirement (EHB). • Limitation on waiting periods for employer sponsored health insurance eligibility. • Individual mandate • Opening of state and federally managed health insurance marketplaces, also referred to • ‘Waiting on further guidance’ (see delays) • Employer mandate for employers with 50 or more employees. • Implementation of health plan excise tax, commonly referred to as the ‘Cadillac Tax’ (2018).
  11. 11. Changes and Delays • Over 40 changes and delays to date • Delay of SHOP • Elimination of 1099, PPACA related, reporting requirement • Extension of individual enrollment period, sans mandate penalty • Extension of individual deadline for April 1st effective date • Carrier option to provide continuation of prior year plan/extension of ‘non-compliant’ plans • Removal of deductible ceilings for small group plans
  12. 12. Individual Mandate Penalty (Tax) • 2014: $95 per uninsured individual or 1% of household income. • 2015: $325 per uninsured individual or 2% of household income. • 2016: $695 per uninsured individual or 2.5% of household income.
  13. 13. Individual Mandate and Federal Poverty Level Guidelines Persons in Family/Household Income Guidelines at 400% 1 $45,960 2 $62,040 3 $78,120 4 $94,200 5 $110,280 6 $126,360 7 $142,440 8 $158,520 • Individuals/families with less than 400% of the defined household income may qualify • Individuals/families with less than 250% of the defined household income may qualify for cost- sharing subsidies
  14. 14. Taxes and Fees Comparative Effectiveness Research Fee (CERF) is an annual fee on fully-insured and self-funded health plans until 2019. • Created to fund comparative effectiveness research to determine which treatments work best when applied to actual patients. • A $2 per participant, annual fee, that may be future indexed on the basis of national health expenditures. • On fully-insured plans the insurer is responsible for fee payment; self-insured plans the employer is responsible.
  15. 15. Taxes and Fees Health Insurance Industry Fee is an annual fee on fully- insured medical, dental and vision plans beginning at 2-2.5% in 2014 and increasing to 3-4% in future plan years. • Implemented to help fund the Federal and State Marketplaces. • Insurers are responsible for making sure fee is paid.
  16. 16. Taxes and Fees Reinsurance Assessment Fee is an annual fee applied to fully-insured and self-funded plans from 2014-2016. • Purpose is to help offset high risk individuals entering the individual market. • Fee is $63 per insured per year beginning in 2014 with a decreasing, to be determined fee, in 2015 and 2016. • For fully-insured plans, the insurer is liable for the fee, while self- funded plan sponsors are responsible for the payment but may utilize the services of a Third Party to help administer.
  17. 17. Taxes and Fees
  18. 18. The ‘Cadillac’ Tax Effective beginning 2018 40% annual tax on employers that provide high-cost benefits through an employer- sponsored group health plan.
  19. 19. The ‘Cadillac’ Tax • Currently, the law states that the employer is responsible for determining the tax and reporting it to the plan administrator. – The plan administrator pays the tax to the IRS • Tax is applicable to premiums exceeding caps of $10,200 for single coverage and $27,500 for family coverage. – The 40% tax is levied on each dollar of premium exceeding the caps
  20. 20. W-2 Reporting Requirements Coverage Type Report Do Not Report Optional Major medical  Dental or vision plan  FSA funded by salary- reduction amounts  FSA employer contributions/excess contributions  HRA contributions  HSA contributions  Hospital indemnity or specified illness, paid on pre-tax basis  Additional reporting information available at
  21. 21. Reforming FSAs, HRAs, and HSAs • FSA – (Flexible Spending Account), HRA – (Health Reimbursement Arrangement), HSA – (Health Savings Account) – FSAs, HSAs, and HRAs are pre-tax, or tax deductible, resources that can be utilized towards qualified medical expenses. • Under PPACA, FSA and HSA dollars can no longer be used to purchase OTC medications and other retail medical related items without a physician issued prescription.
  22. 22. Reforming FSAs, HRAs, and HSAs • FSAs are now limited to a maximum contribution of $2,500 per calendar year under PPACA. – Dollars contributed to FSAs are usually provided through an employee’s elected payroll deduction. – FSAs are, usually, referred to as ‘use-it-or-lose-it’ accounts • In late 2013 the IRS issued new guidance enabling a FSA balance roll- over of, up to, but no greater than $500. • HRAs, prior to September of 2013, could be offered by an employer to reimburse employees for individually owned health insurance policies. – IRS ruled such actions were no longer compliant because it qualified as a group health related offering.
  23. 23. Small Employer Groups and Health Reform Small employer groups defined as employers with 49 or less Full-Time Equivalent employees. • Not subject to penalties for declining to offer an employer sponsored health insurance plan.
  24. 24. Small Employer Groups and Health Reform All small employer group, fully-insured (FI) plan requirements – Must be guarantee issue beginning in 2014; elimination of medical underwriting – Groups no longer classified on basis of industry code (SIC) for purposes of underwriting – Elimination of composite rates – Maximum 3-to-1 spread of rate differential amongst employee population – Adjusted Community Rating
  25. 25. Large Employer Groups and the Employer Mandate
  26. 26. Calculating Full-Time Equivalents • Step 1: Calculate the number of full-time employees for each month of the previous calendar year. – Full-time is defined as anyone that worked 30 hours a week per month, or 130 hours total per month; includes any paid hours (e.g., vacation). • Step 2: Determine the number of FTEs for each month of the previous calendar years. – To calculate the FTEs take the total paid hours of service that were not full-time for the defined month; defined as 30 hours or less per week or a maximum of 120 hours per month, per employee. – Determine the sum total hours worked of all part-time employees and divide by 120; result is the employer groups total number of FTEs.
  27. 27. Calculating Full-Time Equivalents • Step 3: Determine the final FTE count by finding the sum of Step 1 and Step 2; divide the FTE total sum by 12. • If the employer group’s calculated result is greater than 50, the group is subject to the Employer Mandate.
  28. 28. Large Employers and the Employer Mandate – The Penalties • Large group employers not offering coverage are subject to an annual penalty of $2,000 per full-time employee, less 30 employees. – Example: Penalty for employer with 75 full-time employees, not offering coverage. • (75 full-time employees minus 30) multiplied by $2,000 = $90,000 in calendar year penalties. • If the large group offers a health plan, but does not meet ‘affordability’ standards, the employer is subject to a $3,000 penalty per employee that is eligible to receive a premium tax-credit through the State or Federally Facilitated Marketplace.
  29. 29. Large Employers and the Employer Mandate The employer mandate requires employers with 50 or more full-time equivalent employees (FTEs) to provide health insurance. Insurance must be provided to all eligible employees working the equivalent of 30 hours or more a week over a defined ‘look back’ period.
  30. 30. Employer Mandate Part-time employees (less than 30 hours) • No requirement to offer part-time employees coverage • However, part-time employees are utilized in calculating the Full-Time Equivalents
  31. 31. What happens next? Ideas, Statistics, Expectations, and Actions
  32. 32. Questions?
  33. 33. Thank You