Smart Business Thought Leadership Webinar Series - March 26, 2013Bracing for Impact:          What you need to know       ...
Smart Business Thought Leadership Webinar Series - March 26, 2013Pay or Play Starting in 2014 “large employers” must:  Of...
Smart Business Thought Leadership Webinar Series - March 26, 2013What Does This Mean for Employers  If you are a large emp...
Smart Business Thought Leadership Webinar Series - March 26, 2013Who is a Large Employer  On average, 50 or more full-time...
Smart Business Thought Leadership Webinar Series - March 26, 2013Who’s a Full-Time Employee  Workers with 30+ “hours of se...
Smart Business Thought Leadership Webinar Series - March 26, 2013Calculating (FTE) Full-Time Equivalent  For part-timers w...
Smart Business Thought Leadership Webinar Series - March 26, 2013When Making Calculations…  Measure your prior year full-t...
Smart Business Thought Leadership Webinar Series - March 26, 2013Managing the 50 FTE Threshold  If you are…  Under 50, in...
Smart Business Thought Leadership Webinar Series - March 26, 2013The Employer Mandate  Each month (starting January 2014),...
Smart Business Thought Leadership Webinar Series - March 26, 2013Penalty for Not Offering Coverage  If you don’t offer cov...
Smart Business Thought Leadership Webinar Series - March 26, 2013The Two Questions You Need to Ask1. Do we have a plan tha...
Smart Business Thought Leadership Webinar Series - March 26, 2013What is Essential Minimum Coverage?  Includes a number of...
Smart Business Thought Leadership Webinar Series - March 26, 2013What is Essential Minimum Coverage?                      ...
Smart Business Thought Leadership Webinar Series - March 26, 2013Full-Time Testing for Penalty Status Identify your full-t...
Smart Business Thought Leadership Webinar Series - March 26, 2013Measurement and Stability Periods  A period of time to te...
Smart Business Thought Leadership Webinar Series - March 26, 2013Did You Offer Minimum EssentialCoverage for the Month?   ...
Smart Business Thought Leadership Webinar Series - March 26, 2013Penalty for Providing Unaffordable/NotMinimum Value Cover...
Smart Business Thought Leadership Webinar Series - March 26, 2013Testing Adequate Coverage  Employee fails the test if pre...
Smart Business Thought Leadership Webinar Series - March 26, 2013The Premium Test  Several IRS safe harbors:   Premium co...
Smart Business Thought Leadership Webinar Series - March 26, 2013Does Plan Provide Essential MinimumValue?  New metal tier...
Smart Business Thought Leadership Webinar Series - March 26, 2013What is a Bronze-Level Plan?  Provides no less than 60% o...
Smart Business Thought Leadership Webinar Series - March 26, 2013Using the Calculator                       Input details ...
Smart Business Thought Leadership Webinar Series - March 26, 2013Should You Be Worried?  Majority of employer-offered plan...
Smart Business Thought Leadership Webinar Series - March 26, 2013Who Do You Have to Cover and When?  Employees who are not...
Smart Business Thought Leadership Webinar Series - March 26, 2013Key Takeaways  If you have 50+ FTEs, you are a large empl...
Smart Business Thought Leadership Webinar Series - March 26, 2013Develop an Action Plan  Get help NOW for 2014.  Understan...
Smart Business Thought Leadership Webinar Series - March 26, 2013Questions?    Joe Popp, JD, LLM         614.889.8725     ...
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Healthcare Reform - Bracing for Impact

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Healthcare Reform Webinar - bracing for Impact - presenting by Ohio Accounting Firm Rea & Associates on March 26, 2013 addressing the pay or play portion of the reform. Key topics addressed include who is a full time employee, caclulating full time equiavalents, penalty for not offering coverage, essential minimum coverage and much more. Learn how the new Obamacare reform will impact your company!

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Healthcare Reform - Bracing for Impact

  1. 1. Smart Business Thought Leadership Webinar Series - March 26, 2013Bracing for Impact: What you need to know about health care reformBy Joe Popp, JD, LLM
  2. 2. Smart Business Thought Leadership Webinar Series - March 26, 2013Pay or Play Starting in 2014 “large employers” must:  Offer minimum essential coverage that is both affordable and provides minimum value to full-time employees. or  Pay penalties. Report various elements to the IRS and employees. © 2013. All rights reserved. Rea & Associates, Inc.
  3. 3. Smart Business Thought Leadership Webinar Series - March 26, 2013What Does This Mean for Employers If you are a large employer:  Which employees will you be penalized for if you don’t cover them? • How much? How often? How can you estimate this?  Which employees can get vouchers on the new exchanges? These are different issues! Example: You may NOT be penalized for a particular employee who can go to the exchange to get a voucher due to employer safe harbors. © 2013. All rights reserved. Rea & Associates, Inc.
  4. 4. Smart Business Thought Leadership Webinar Series - March 26, 2013Who is a Large Employer On average, 50 or more full-time employees during the year (for the prior year).  Common law employees, with some subtractions.  All employees of a controlled or affiliated group are considered together.  Both full- and part-time employees count.  Calculated monthly. New employers must use reasonable estimates to determine if they will have 50 FTEs. © 2013. All rights reserved. Rea & Associates, Inc.
  5. 5. Smart Business Thought Leadership Webinar Series - March 26, 2013Who’s a Full-Time Employee Workers with 30+ “hours of service” a week.  IRS guidance is 130 hours of service/month is full- time.  Hours of service is any time paid for: • Holidays, military leave, jury duty, illness, etc.  Based on actual hours of service: • Penalty safe harbors and measurement/stability periods don’t apply. © 2013. All rights reserved. Rea & Associates, Inc.
  6. 6. Smart Business Thought Leadership Webinar Series - March 26, 2013Calculating (FTE) Full-Time Equivalent For part-timers working less than 30+ hours a week:  Add up all part-time employee time for the month.  Divide that total time by 120 hours.  Example: 10 people x 20 hours a week = 7 FTEs. Add FTE to your full-time worker number for complete monthly worker count. © 2013. All rights reserved. Rea & Associates, Inc.
  7. 7. Smart Business Thought Leadership Webinar Series - March 26, 2013When Making Calculations… Measure your prior year full-time count by month.  Average of all months = full-time count for the year. Transitional relief is available for 2014.  Can measure large employer status using any consecutive six month time period in 2013. Secure status for 2014 by making needed changes prior to July 1. © 2013. All rights reserved. Rea & Associates, Inc.
  8. 8. Smart Business Thought Leadership Webinar Series - March 26, 2013Managing the 50 FTE Threshold If you are…  Under 50, investigate steps to ensure you stay under 50.  Expanding over 50, investigate what your additional costs from health care reform will be as part of your expansion planning.  Over 50, understand how to comply. © 2013. All rights reserved. Rea & Associates, Inc.
  9. 9. Smart Business Thought Leadership Webinar Series - March 26, 2013The Employer Mandate Each month (starting January 2014), you will be:  Playing, if you offer affordable essential minimum coverage to your full-time employees.  Paying, if you fail to offer coverage to at least 95% of your full-time employees. (Penalty a)  Paying, if you offer coverage to 95% of full-time employees, but it is either not affordable or adequate insurance. (Penalty b) © 2013. All rights reserved. Rea & Associates, Inc.
  10. 10. Smart Business Thought Leadership Webinar Series - March 26, 2013Penalty for Not Offering Coverage If you don’t offer coverage to at least 95% of full- time employees – pay 4980H(a) penalty  $166 per full-time employee per month ($2,000 annually).  First 30 employees are free of penalty each month. Requires testing plans against the bronze metal tier standard. © 2013. All rights reserved. Rea & Associates, Inc.
  11. 11. Smart Business Thought Leadership Webinar Series - March 26, 2013The Two Questions You Need to Ask1. Do we have a plan that provides essential minimum coverage?2. If so, did we offer it to 95% or more of our full- time employees? © 2013. All rights reserved. Rea & Associates, Inc.
  12. 12. Smart Business Thought Leadership Webinar Series - March 26, 2013What is Essential Minimum Coverage? Includes a number of different kinds of plans:  Government sponsored programs.  Employer sponsored plans. • Group health plans – self-insured and insured.  Grandfathered health plans.  Other plans: self-funded student plans, foreign plans, etc. Must offer to full-time workers and their dependents under 26. © 2013. All rights reserved. Rea & Associates, Inc.
  13. 13. Smart Business Thought Leadership Webinar Series - March 26, 2013What is Essential Minimum Coverage? - continued Some Obamacare changes apply to the employer mandate area and some do not.  Requirement of plans containing benefits in 10 essential categories applies to exchange insurance, not large employer plans.  Non–discrimination does apply. • Self-insured: Income to high comp. • Insured: $100/person/day. © 2013. All rights reserved. Rea & Associates, Inc.
  14. 14. Smart Business Thought Leadership Webinar Series - March 26, 2013Full-Time Testing for Penalty Status Identify your full-time workers: Anyone with 130+ hours in a month. Hourly employees: Must calculate actual hours. Non-hourly: IRS safe harbors are available. • 8 hours/day, 40 hours/week, actual time. © 2013. All rights reserved. Rea & Associates, Inc.
  15. 15. Smart Business Thought Leadership Webinar Series - March 26, 2013Measurement and Stability Periods A period of time to test if someone is full-time.  Initial measurement period – intended for new hires and based on hire date.  Standard measurement period – for existing employees.  You can select different periods for different classes of employees. Administrative period – 90 days There is a period of time after the measurement period where you can rely on the results – a stability period. © 2013. All rights reserved. Rea & Associates, Inc.
  16. 16. Smart Business Thought Leadership Webinar Series - March 26, 2013Did You Offer Minimum EssentialCoverage for the Month? Waivers Initial measurement period Failed stability period If one of the above doesn’t apply, they are full-time and not offered coverage. © 2013. All rights reserved. Rea & Associates, Inc.
  17. 17. Smart Business Thought Leadership Webinar Series - March 26, 2013Penalty for Providing Unaffordable/NotMinimum Value Coverage If you offer coverage to 95% or more of your full- time employees, but it’s not affordable or adequate – pay a 4980H(b) penalty.  $250 per full-time employee failure per month ($3,000 annually).  First 30 are NOT free.  Never more than 4980H(a) penalty – max is $166/month per (full-time employees - 30). Must test each full-time employee for affordability. © 2013. All rights reserved. Rea & Associates, Inc.
  18. 18. Smart Business Thought Leadership Webinar Series - March 26, 2013Testing Adequate Coverage Employee fails the test if premiums are more expensive than the limit (a percentage of worker income). Test applies to those making 400% of poverty level or less. Current limit is 9.5% of household income (indexed for inflation). © 2013. All rights reserved. Rea & Associates, Inc.
  19. 19. Smart Business Thought Leadership Webinar Series - March 26, 2013The Premium Test Several IRS safe harbors:  Premium cost of single insurance does not exceed 9.5% of box 1, form w-2 income.  Premium cost of single insurance does not exceed 9.5% of monthly income (salary or 130 hours times hourly rate).  Premium cost of single insurance is less than 9.5% of federal poverty level for a single person. • Approximately $1,100 annual premium. If you don’t meet one of these safe harbors, you have a harder road ahead. © 2013. All rights reserved. Rea & Associates, Inc.
  20. 20. Smart Business Thought Leadership Webinar Series - March 26, 2013Does Plan Provide Essential MinimumValue? New metal tiers benchmark whether plans provide a certain level of coverage. An apples-to-apples comparison – at least within basic and premium coverage. To provide essential minimum value, employer-provided insurance must at least meet the bronze medal test. © 2013. All rights reserved. Rea & Associates, Inc.
  21. 21. Smart Business Thought Leadership Webinar Series - March 26, 2013What is a Bronze-Level Plan? Provides no less than 60% of medical costs – employees pay up to 40%.  Based on actuarial cost of insurance for a certain class of insured, not your particular workforce.  IRS and HSA calculator for taxpayers to use.  Checklist of benchmarks to come.  Can have actuary certify. © 2013. All rights reserved. Rea & Associates, Inc.
  22. 22. Smart Business Thought Leadership Webinar Series - March 26, 2013Using the Calculator Input details from your plan:  All cost sharing provisions, including co-pays, deductibles, caps, etc.  Benefits in the four core categories of benefits: • physician and mid-level practitioner care • hospital and emergency room services • pharmacy benefits • laboratory and imaging services.  Employer HSA contributions. © 2013. All rights reserved. Rea & Associates, Inc.
  23. 23. Smart Business Thought Leadership Webinar Series - March 26, 2013Should You Be Worried? Majority of employer-offered plans provide bronze metal tier coverage or better. Your plan may fail if you only offer:  High-deductible plans.  Plans with really high copays.  Plans that skimp on the core service benefits. If you don’t meet the bronze level, you won’t pass the offer of coverage test! © 2013. All rights reserved. Rea & Associates, Inc.
  24. 24. Smart Business Thought Leadership Webinar Series - March 26, 2013Who Do You Have to Cover and When? Employees who are not full-time (30+ hours a week).  Generally have a 90 day window after start date to offer coverage to a full-time employee. Complex penalty rules for not providing coverage and when to offer it (measurement / stability periods). These requirements go live for large employers January 1, 2014. © 2013. All rights reserved. Rea & Associates, Inc.
  25. 25. Smart Business Thought Leadership Webinar Series - March 26, 2013Key Takeaways If you have 50+ FTEs, you are a large employer and must provide minimum essential coverage. If you do not do this, you will be fined. Each month you will either pay:  4980H(a) penalty – you did not offer essential minimum coverage to 95%+ of full-time employees. • $166 per full-time employee per month ($2,000 annually).  4980H(b) penalty – while you offered essential minimum coverage, it was not affordable to some employees. • $250 per full-time employee failure per month ($3,000 annually). © 2013. All rights reserved. Rea & Associates, Inc.
  26. 26. Smart Business Thought Leadership Webinar Series - March 26, 2013Develop an Action Plan Get help NOW for 2014. Understand other impacts of Obamacare – nondiscrimination. Seek different planning options in actual dollar terms. Get help with the tracking. Determine what help you’ll need with the new IRC section 6056 reporting. © 2013. All rights reserved. Rea & Associates, Inc.
  27. 27. Smart Business Thought Leadership Webinar Series - March 26, 2013Questions? Joe Popp, JD, LLM 614.889.8725 Joseph.Popp@ReaCPA.com

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