The Future of Health Care for Your Small Business


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Learn how the Affordable Care Act will impact the future of health care for small businesses! Specifically, this presentation expores the future of insurance market reforms, small business tax credits and state health exchanges.

Presentation by:
Cindy Gillespie, Senior Managing Director, Washington, McKenna Long & Aldridge
Jandel Allen-Davis, MD, Vice President of Government and External Relations, Kaiser Permanente

Published in: Business, Economy & Finance
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  • KP, June 2012, A Survey of Colorado Small Business Owners About Health Insurance and the Availability of Insurance Through the Colorado Health Insurance Exchange
  • Prevention Care when you’re healthy helps decrease overall health costs and keep your employees engaged and on the job. A large portion of health care reform focuses on prevention by expanding access to preventive care visits at no additional cost to you or your employees. Quality of care Physicians will be paid based on value rather than volume. The law is designed not just to control health care costs, but also to improve quality of care. The new law provides incentives for physicians to join together to form “Accountable Care Organizations” where doctors can better coordinate patient care and improve the quality, help prevent disease and illness, and reduce unnecessary procedures, tests or hospital admissions. Guarantee Issue Now no longer will you have to worry about a pre-existing condition limiting or denying you health coverage. Health plans must permit you to enroll regardless of health status, age, gender, or other factors that might predict the use of health services. In the individual and small group market, it eliminates the ability of insurance companies to charge higher rates due to gender or health status. Cost transparency Due to the rising costs of health care, many companies have shifted a portion of their premium dollars to employees through deductible plans. This change has put much more responsibility on consumers to understand the true costs of care. In conjunction, the law puts much more accountability for costs on the providers. Many provisions of the law limit the ways in which insurance companies spend your premium dollars and require that they justify any premium increase greater than 10%.
  • Flexibility and choice in the exchange—employers may offer: A single plan for all employees. A set of plans from a single carrier. All plans within a single metal tier, allowing employees to choose their carrier and subsequently their own doctor Any plan that is offered in two adjacent metal tiers (bronze, silver, for example) Easily compare plan offerings The exchanges will allow you to compare plans more easily than ever – much like you do when booking travel. And as with travel, you will need to make some compromises. You know that with airfare a nonstop flight can be more expensive and that 1-stop flight isn’t as convenient. Health care decisions will now be very similar to the consumer shopping experience. Metal tiers: The metal tiers of plans sold through the exchange – bronze, silver, gold and platinum – represent actuarial value, or what percentage of a covered benefit is paid. For bronze it is 60 percent, silver is 70 percent, gold is 80 percent and platinum is 90 percent
  • Small business tax credit To qualify, an employer must: Have low-wage workers (less than $50k average annual salary) Pay at least 50% of employees’ premium. Employ no more than 25 full-time equivalent employees.   Through 2013, the credit equals 35 percent of the employer contribution (25 percent for nonprofits). Beginning January 1, 2014 the credit rises to 50 percent (35 percent for nonprofits). Only the amount actually contributed by an employer counts toward the tax credit. The amount of employer premium payments that qualify for the credit is capped at the average small-employer premium for the state in which the employer is located. The average small-group-market premium for each state will be calculated by the United States Department of Health and Human Services.  
  • Quote from the Denver Metro Chamber of Commerce breakfast a few days after the Supreme Court ruling on the ACA
  • The Future of Health Care for Your Small Business

    1. 1. The Future of Health Carefor Small BusinessesJandel Allen-Davis, MD, Vice President—Government and External Relations
    2. 2. McKenna Long & Aldridge LLPSenior Managing DirectorCINDY GILLESPIE
    3. 3. Agenda  2014: What happens for your employees?  2014: What are your options as a small business?  The Question: How do you choose among those options?3
    4. 4. 2014: Your employees * Assumes CO opts in to Medicaid expansion ** Tax-filing threshold *** 138% FPL – Household MAGI4 **** 400% FPL – Household MAGI
    5. 5. 2014: Different options for different size businesses… Offer affordable insurance More than 50 FTEs – Employer Mandate Don’t offer and pay penalty Offer insurance Less than 50 FTEs – “SHOP” for insurance in small employer No Employer Mandate health options exchange Don’t offer5
    6. 6. Three Key Pieces to the Penalty  What businesses are subject to the penalty? – Those with 50 or more FTEs (or equivalents)  An FTE works 30 or more hours a week  What kind of insurance must be offered to avoid a penalty? – Minimum Essential Coverage – Grandfathered plan  How much must the employer contribute? – Must be “affordable” for the employee  Safe harbor: – Lowest cost self-only plan is less than 9.5% of employee’s W-2 wage6
    7. 7. Option for Employers with Less than 50 FTEs: Shopping in COHBE’s Small Employer Health Options Program Registers On-Line or via Call Center; provides info Determines Level of May Choose Defined on the group Employee Choice Contribution Employer Goes on-line; provides Comparison shops, SHOP Payroll and individual info: Age, Insurer premium calculator, other HR Services Residence, Tobacco selects & enrolls in plan use Employees7
    8. 8. Key Questions for Employers8
    9. 9. Key Questions: Employers with <50 FTEs9 * There are numerous complexities to be examined
    10. 10. Key Dates to Remember  Election Day 2012  November 16, 2012: States submit Exchange Blueprints  January 1, 2013: States receive “go”/ “no go” from federal government  October 2013: Open Enrollment begins  January 1, 2014: Exchanges “go live” Decision time for small businesses is approaching rapidly…10
    11. 11. Kaiser PermanenteVice President of Government and External RelationsJANDEL ALLEN DAVIS, MD
    12. 12. Agenda Slide Thoughts from small businesses What you should know about care and coverage 2014 and the Colorado Health Exchange Fourth Agenda Fifth Agenda12 September 19, 2012 | © 2011 Kaiser Foundation Health Plan, Inc.
    13. 13. What we heard Thoughts from 300 Colorado small business owners…  Study conducted with CO small business Providing to owners with 2 – 50 employees some employees  300 phone interviews conducted by an Not providing independent pollster insurance  Conducted May 7 – 31, 2012 Providing insurance  +/-6% at the 95% confidence level Source: Text is 9pt Arial Narrow13 September 19, 2012 | © 2011 Kaiser Foundation Health Plan, Inc. .
    14. 14. Increasing frustration  We know, anecdotally, that small business owners are feeling more and more frustrated… – Lack of clear information14 September 19, 2012 | © 2011 Kaiser Foundation Health Plan, Inc. .
    15. 15. What you should know – Care and Coverage Care Coverage  Prevention is still key  Guarantee issue for small businesses  Quality of care  Cost transparency and accountability15 September 19, 2012 | © 2011 Kaiser Foundation Health Plan, Inc. .
    16. 16. The Exchange and your business Key benefits for you…  Flexibility and choice  Easily compare plan offerings  Four tiers represent percentage of covered benefit paid: – Platinum = 90% – Gold = 80% – Silver = 70% – Bronze = 60%16 September 19, 2012 | © 2011 Kaiser Foundation Health Plan, Inc. .
    17. 17. Small business tax credit – available now, but many are unaware of how it works  Tax credit outline – Have low-wage workers (less than $50k average annual salary) – Pay at least 50 percent of employees’ premium – Employ no more than 25 full-time equivalent employees – Through 2013, the credit equals 35 percent of the employer contribution (25 percent for nonprofits). – Beginning January 1, 2014 the credit rises to 50 percent of the employer contribution (35 percent for nonprofits).17 September 19, 2012 | © 2011 Kaiser Foundation Health Plan, Inc.
    18. 18. Thank you! Questions? “Let’s talk about getting people healthy. That’s something we can all agree on.” — Donna Lynne, DrPH, President, Kaiser Foundation Health Plan of Colorado18 September 19, 2012