The Election is over. Health care Reform is here to stay, and Colorado is also moving forward on a number of health care issues independently of the federal government. Conversely, employers in the state have to make huge employee benefit decisions based on changing and sometimes limited information.

1. HEALTH CARE REFORM
PREPAREDNESS 103:
The Post-Election Direction
Brought to you by:

2. Agenda
• Quick recap of past 2
sessions
• Tips and strategies from
the latest guidance and
everything we’ve learned
since the election
• Preview of what’s coming
in the next three sessions
2

3. Recap of Previous Sessions
Changes through 2013
2010 – 2011 • Small employer tax credit rolled out
• Employers can declare their plans grandfathered
• No lifetime maximum on benefits
• Kids covered up to age 26
• Preventative care provided with no cost sharing
• No over-the-counter drugs under HSA/health FSA
2012 • Must report value of health coverage on W2
• New SBC format for easier plan comparisons
• Expanded preventative care including free contraceptives
2013 • Health FSA now limited to $2,500
• New PCORI fee of $1 per employee per year ($2 next 6 yrs)
• New Medicare taxes on those earning over $200,000
3

4. Recap of Previous Sessions
Changes in 2014 & Beyond
Market • All policies must be guaranteed issue with no exclusions for
Changes pre-existing health conditions
• All group policies for 2-50 EE’s will be community rated
• New individual and small group exchanges will be available
• New fees on insurance companies will be added to premiums
Pay or Play • NO MANDATE ON EMPLOYERS WITH LESS THAN 50 EE’S
Mandate • Larger employers must provide coverage or pay penalties
• If no coverage, penalty is $2,000 per EE except first 30
• If coverage not “affordable,” pay $3,000 for each EE w/subsidy
Coverage • Waiting periods can’t exceed 90 days
Changes • Cost sharing limits: $2,000/$4,000 deductible for small
employers, out of pocket max is limited to HSA limits for all
• Cadillac tax in 2018 on premiums that exceed $850/mo single
4

5. The Post-Election Direction
• Multiple court challenges to ACA ended in
Supreme Court Ruling June 2012:
– Law is constitutional under Congress’ authority to
impose a tax (individual mandate)
– Feds may not, however, require states to agree to
Medicaid expansion
• November Election solidified
the ACA’s future, for now
• Future scenarios:
– 2014 mid-term elections
– 2016 presidential election
5

6. Top 10 New Topics Under ACA
• Perhaps not quite as exciting as…
6

7. Top 10 New Topics Under ACA
#10: Limited Medical waivers
expire 12/31/13
• These plans were mostly used by
large companies
• Plans typically have a very low
limited max and thus don’t meet
the new requirements
• Insurers and large employers
received temporary waivers, which
expire the end of this year
7

8. Top 10 New Topics Under ACA
# 9: New Transition rules for expatriate
plans
• Plans will be deemed
compliant until 2016 if in
compliance with pre-HCR
rules, such as:
• Mental Health Parity
• ERISA Claims
Procedures
• HIPAA non-
discrimination
8

9. Top 10 New Topics Under ACA
#8: Newly Released Preventative Care FAQs
No Cost Sharing Allowed:
• Polyp removal during
colonoscopy
• Genetic testing for breast cancer
• Breastfeeding equipment and
support
• Preventive OTC meds with Rx
• Out-of-net preventative services
IF no in-net doc who can provide
a certain service
• Annual HIV testing for women
9

10. Top 10 New Topics Under ACA
#7: 90 Day Waiting Period Clarified
• Many plans feature a “first of the month” provision
for ease of payroll deductions.
• 90 Calendar days is TRUE
max
• Could only use FOM if
following 60 days of less
• See exception later for
Variable Hour employees
10

11. Top 10 New Topics Under ACA
# 6: Yes, Aggregation Rules Apply!
Controlled groups and affiliated
service groups will be added
together to determine whether
they have 50 employees for the
purposes of the Pay-or-Play
penalty
11

12. Top 10 New Topics Under ACA
#5: Safe Harbor Definition of Seasonal
Worker for Employer Shared Responsibility
• IF an employer’s workforce exceeds 50 full-time employees for 120
days or fewer during a calendar year,
• AND the employees in excess of that 50 who were employed
during that period of no more than 120 days were seasonal
employees
• Then, the employer would not be an applicable large employer.
• For this purpose, “seasonal worker” means a worker who performs
labor or services on a seasonal basis, as defined by the Secretary of
Labor, including (but not limited to) workers covered by 29 CFR
500.20(s)(1) and retail workers employed exclusively during holiday
seasons.
12 Source: Towers Watson HCR Bulletin September 2012.

13. Top 10 New Topics Under ACA
#4 Variable Hour Employee Safe Harbor
12/1/2013 11/30/2014 1/1/2015 12/31/2015
Start Date End of 12 Mo Covg Starts End of 12 Mo
Measurement Period Stability Period
Administrative Period
13

14. Top 10 New Topics Under ACA
#3: Is it More Expensive to Pay Penalties or
Buy Coverage?
Modeling Penalties vs. ER Contributions on $400 Premium
Salary Number of Average 100% ER Contrib 80% ER Contrib 60% ER Contrib 0% ER Contrib
Category Employees Salary ER Cost Penalties ER Cost Penalties ER Cost Penalties ER Cost Penalties
< $10K 2 $8,800 $9,600 $0 $0 $6,000 $0 $6,000 $0 $4,000
$10 - $20K 69 $15,700 $331,200 $0 $265,000 $0 $0 $207,000 $0 $138,000
$20 - $30K 35 $24,700 $168,000 $0 $134,400 $0 $100,800 $0 $0 $70,000
$30 - $40K 19 $35,600 $91,200 $0 $73,000 $0 $54,700 $0 $0 $38,000
$40 - $50K 17 $45,400 $81,600 $0 $65,300 $0 $49,000 $0 $0 $0
$50K + 13 $89,500 $62,400 $0 $49,900 $0 $37,400 $0 $0 $0
Total 155 $29,500 $744,000 $0 $587,600 $6,000 $241,900 $213,000 $0 $250,000
After Tax Impact of Costs 65% 100% 65% 100% 65% 100% 65% 100%
Total Costs $483,600 $387,940 $370,235 $250,000
14

15. Top 10 New Topics Under ACA
#2:Community Rating: BIG for SMALL Groups
Oldest Members
2013 2014
3 to 1
6 to 1 Youngest Members
15

16. Top 10 New Topics Under ACA
#1: Small Group $2,000 Deductible Limit
• Starting with next anniversary in 2014, small employers must
have a deductible of no more than $2,000, indexed for
inflation
• Starting with next anniversary in
2014, small employers must have a
deductible of no more than $2,000,
indexed for inflation
• Are higher deductibles possible?
16

17. Top 10 New Topics Under ACA
Whew!
17

18. Preview of Upcoming Sessions
HCR104: • How will the new on-line marketplaces work?
The State of the • What are the advantages and disadvantages to using them?
Exchange
• What should we expect as the October enrollment start
approaches?
HCR105: • Regardless of the ACA, healthcare trends have been high for
Making Healthcare decades and costs are unsustainable
More Affordable • What can an employer do about it?
• Learn strategies specific to small, mid-sized, and large employers
HCR106 : • What do we know so far about the Exchange plans?
Where Do We Go • What are the latest regulations that affect planning for 2014?
From Here?
• Given everything we know now, how should employers proceed?
Future Seminars We hope to continue this series throughout the year. Please join us
for the latest information you need to know!

19. Thank You!
Questions?
Kristen Russell Eden Ripingill
(303) 369-3200 (303) 306-2561
kristen@fallriver Eden.M.Ripingill
benefits.com @kp.org