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How To Survive And Thrive In The Era Of Health Reform[1]

How To Survive And Thrive In The Era Of Health Reform[1]






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    How To Survive And Thrive In The Era Of Health Reform[1] How To Survive And Thrive In The Era Of Health Reform[1] Presentation Transcript

    • HOW TO SURVIVE AND THRIVE DURING THE ERA OF HEALTH CARE REFORM By Jim Wisdom, CFP James L. Wisdom Insurance Services August , 2012
    • OVERVIEWHealth Reform OverviewWhere Are You Today?Where Do you Want To Go?How Can We Help You Get There?
    • PATIENT PROTECTION AND AFFORDABLECARE ACT ( PPACA)-OVERVIEWTax Credits Employers with 10 or fewer workers Average annual wages of < $25,000 Eligible for credit of up to 35% of premiums costs through 2013 Phases out and disappears if employer has > 25 employees and average annual income of $50,000 or more
    • PATIENT PROTECTION AND AFFORDABLECARE ACT ( PPACA)-OVERVIEW ( CONT’D)  2011- Adult children to 26; No lifetime limits; Restricted Annual limits; No Pre-Existing Conditions for Children under 19; Preventive Services with no cost sharing required  Employers must satisfy non-discrimination requirements of Section 105(h)- subject to $100/day penalty ( non-compliance)
    • PPACA- OVERVIEW ( CONT’D)Form W-2 Reporting2013- Broaden Medicare HI (+ .9% increase )Medicare tax on investment income ( +3.8%)Applies to income levels greater than $200K ( Individuals) and $250K ( Families)Unearned income = interest, dividends, capital gains, annuities, royalties and rents
    • PPACA- OVERVIEW ( CONT’D)2013 ( cont’d)Tax of 2.3% on Medical Device ManufacturersItemized Deductions on Medical Expenses- Expenses must exceed 10% of income ( from 7.5% of income now)
    • PPACA- OVERVIEW ( CONT’D) 2014- Employer “pay or play” responsibility for 50 FTE’s or more ( includes part-timers) If employer offers coverage, but has one employee receiving subsidized coverage in exchange:  Employer pays lesser of $3,000 X # FTE’s receiving subsidized coverage in an exchange or $2,000 X # FTE’s If employer doesn’t offer coverage, employer pays $2,000 X # FTE’s, if at least one FTE obtains subsidized coverage in an exchange
    • PPACA- OVERVIEW ( CONT’D) 2014 ( cont’d) Employer Free Choice Vouchers  Subsidies available for low income employees  The Employee’s household income can’t exceed 400% of FPL
    • PPACA- OVERVIEW ( CONT’D)2014 ( cont’d)Wellness Incentives Increase from 20% to 30% of plan costs ( Health Care Reform “carrot”) for participation in employer sponsored wellness program  Incentive may increase to 50% of plan costs
    • PPACA- OVERVIEW ( CONT’D)2014Employee Health Coverage Reporting- Employers must report on the following: If “minimum essential coverage” is offered Waiting period Lowest cost option in each enrollment category Employer share of total allowed costs of benefits Total number and names of FTE’s receiving coverage
    • PPACA- OVERVIEW ( CONT’D)2014 ( cont’d)Insurance market reform ( Exchanges) guaranteed issue; no underwriting, no pre-existing conditions; limits on rating bands
    • PPACA- OVERVIEW ( CONT’D)2018- “Cadillac Tax”Excise tax on high-cost health plans 40% excise tax Applies to Individual coverage cost > $10,200 Applies to Family coverage cost > $27,500 Costs are aggregated ( i.e. PPO + H.S.A., etc. ) “Cadillac Tax to affect 60% of our clients”- Towers Watson – Benefit Consultants
    • HIGH PERFORMING COMPANIES VS. LOWPERFORMING COMPANIES“There is a bigger price difference between High Performing companies and Low Performing Companies than ever before.” Towers Watson- 2010 Health Care Survey
    • KEY CHARACTERISTICS OF HIGH PERFORMINGCOMPANIESProactive vs. ReactiveConsumer Driven Health Plan Option ( i.e. HSA, HRA)Company Sponsored Wellness ProgramSource: Towers Watson 2010 Health Care Survey
    • CONSUMER DRIVEN HEALTH PLANSHRA – Health Reimbursement ArrangementHSA- Health Savings Account “Health Care IRA” 20% to 30% discount vs. Traditional Plans “Triple Tax Punch”  Tax- Favored at Deposit, Growth and Withdrawal Phase Unused $$ rolls over to the next year- tax-favored Maximum Deposit ( 2012):  Individuals: $3,100  Families: $6,250 
    • WELLNESS PROGRAMS$2.5 Trillion spent on health care annuallyApprox. 50% of all health care costs due to lifestyle “The Big Three”- Diabetes, Obesity, Heart Disease70% of all health care costs due to: Diabetes Asthma Congestive Heart Failure Coronary Artery Disease Depression
    • VALUE BASED PLANS: OVERVIEWWhat are Value Based Plans?What makes them unique?What is the long term outlook for Value Based Plans?
    • WHAT ARE VALUE BASED PLANS?Like typical health plans, when a member is injured or sick, Value Based Plans will pay their claimsUnlike typical health plans, Value Based Plans go further by rewarding employees to take action to improve or manage their health.The difference: Health Insurance vs. Healthy Insurance
    • POTENTIAL BENEFITS - VALUE BASED HEALTH PLANSProvide financial incentives to employees to complete “Health Actions” and monitor health and lifestyleLower Health Claims Costs, lower health premiums over the short and long-termLower, more stable health premiums over the short and long-termA healthier, more educated workforceLower presenteeismLower absenteeismHigher employee morale and productivityA more profitable employer
    • POTENTIAL FUTURE BENEFITS – VALUE BASED PLANSValue Based Plans have offered rate increases averaging 1.5% per year for the last two years ( far below industry norms)For groups of 51+ employees, some vendors are offering two year rate guaranteesValue Based Plans may be attracting a healthier risk poolIf this happens, Value Based Plans may continue to offer lower annual rate increasesThe above phenomenon would adversely affect the annual rate increases with traditional health plans ( HMO, PPO) – adverse risk pool = higher than normal rate increases
    • WHERE ARE YOU TODAY? Level I I Level IIIMulti Plans Yes YesPre-Tax Premiums Yes YesRollover Unused $ No YesPay Claims Pre-Tax Yes YesHC Financial Option No YesPrice/Quality Tools No YesInv. Options ( tax-adv.) No YesHealth Risk Tools Yes YesHealth Risk Prev. Tools No NoWellness Program No No
    • WHERE ARE YOU TODAY? Level IV PlanningMulti Plans YesPre-Tax Premiums YesRollover unused $ YesPay Claims Pre-Tax YesHC Financial Option YesPrice/Quality Tools YesInv. Options (tax adv) YesHealth Risk Tools YesH R Prev. Tools YesWellness Program Yes
    • WHY JAMES L. WISDOM INSURANCE SERVICES24 years of experience in Insurance and Financial ServicesSpecialize in privately held employer groupsCertified Financial Planner DesignationHealth Care ConsultingComprehensive Fee Based Financial Planning – Owners and Key ExecsHealth Care Reform SpecialistsProperty & Casualty / Worker’s Comp. Expertise Through Associate Firms
    • WHY JAMES L. WISDOMINSURANCE SERVICESHow we approach your business:Each company is unique and differentFully understand your company, culture, industry and business objectivesIdentify your 2-5 year Strategic Business PlanHelp create a 2-5 year Insurance/Risk Management PlanConsult, counsel and adapt during this time frameFollow-through ( measuring and reporting)
    • JAMES L. WISDOM INSURANCE SERVICES- ADD’LSERVICESI. Insurance/Risk Management PlanningII. Retirement PlanningIII. Estate PlanningIV. Business Succession Planning
    • CONTACT INFORMATIONJames L. Wisdom Insurance Services4607 Lakeview Canyon Road- Suite 482Westlake Village, CA 91361Work: 805-497-9264Cell: 818-469-6640Fax: 805-435-3636CA License # 0699524Web Site: www.wisdomhealthplans.comE-Mail: jim@wisdomhealthplans.comHealth Care Reform Blog: www.jimwisdom.wordpress.com
    • THANK YOU!