How healthcare reform will affect your business in 2014.

1. How ObamaCare Affects
My Business

2. What We Will Cover
The Mandates
Compliance & Reporting
The New Market
Preparing for 2014
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3. Times are still a changin’
Regulations not yet released
Oklahoma case
Feds not ready to start exchanges
***Check with your attorney
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4. Most States Opting Out
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5. Mandates
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6. Individual Mandates
Applies to Individual & all dependents
Minimum coverage (60% of AV), exemption, or penalty
2014 $95 PP or 1% of Household Income (HI)
2015 $325 PP or 2% of HI
2016 $685 PP or 2.5% of HI
Exemption financial hardship, religious, earning below
tax (12,500 / 19,500 in 2012)
0.9% Medicare withholding on wages over 200k (2013)
3.8% on Investment Income individuals over 200k / 250k
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7. Tax Credits
Small Business Credit - Under 25 EEs with less than
$50,000 avg salary (35% maximum credit)
Individual Credit – Minimum coverage > 9.5% of HI
133%-400% of federal poverty level (43,320 / 88,200)
Can be applied directly to premium though
exchange or on tax form
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8. Employer Mandates
No mgt carve-outs, separate waiting periods/contributions
Penalty - $100 /day per incident up to $500,000 per year
Max 90 day waiting period – Can offer FOM 60 days
Significant reporting 50+ FTEEs (small group exempt for now)
Over 200 FTEs must auto-enroll (on hold pending final guidance)
Employers over 50 FTEEs Must Offer Coverage
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9. Mandates “Large Employers”
Provide “affordable” insurance or pay 1 of 2
penalties
Employers over 50 FTEs
Takes effect 1/1/14 (fiscal plan ok as long as 1/3rd offered)
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10. Are You A Large Employer?
Over 50 FTE EEs
Exclude seasonal working less than 4 months
Employee common law definition…maybe
PEO, 1099, & Long Term Staffing
Common ownership follows section 414
Generally 50- 80% (including spouses, children, parents, siblings)
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11. Who do you have to offer coverage?
EEs expected to have 30 hrs/wk or (130
hrs/mth) service
Vacation, Accrued PTO, FMLA, disability
Seasonal still counts (good faith)
1 year look-back (6 or 12 moths in 2014)
12 months in 2015+
When is an employee eligible?
No more than 90 days
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12. Pick your Penalty
4980(h) “A” vs. “B” (“pay or play”)
A. Not Offering Minimum Essential Coverage to EE (& Children)
$2,000/ yr per every FT EE over 30 EEs
100 EE company  70 x $2,000 =$140,000
Or
B. Coverage not “Affordable”
Lowest Plan Employee Only Deduction > 9.5% of HI
Can use W2, Pay Rate, or 100-133% of poverty (11k / 22k)
$3,000/ yr per FT EE receiving a tax credit
100 EE company  10 x $3,000 = 30,000
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13. Reporting & Compliance
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14. Reporting
“5500 type” report - Discrimination Testing
W2 - ER Cost of Medical, Rx, Clinic, Medicare, EAP & Standalone
Dental / Vision
Summary of Benefit & Coverage (SBC) – all dependents
30 days prior or with 7 days on request
Includes separated spouses and college students
Penalty $1,000 per incident
Notice of material changes – 60 days prior
Exchange notifications
Summary Plan Document
Grandfathered Plan Status
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15. What the Market Will Look Like
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16. Pricing
Rating based on Age (3 to 1 max), Geographic,
Family Size, & Tobacco (1.5 to 1)
No medical underwriting or re-underwriting
Rate increases are subject to review by HHS
Rates likely to increase because of “death spiral”
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17. Product
10 Essential Coverages (Med, Rx, Ambulatory, Preventative…)
Minimum Value / Affordability
No more mini-med
Max deductible $2,000 / $4,000 (may lose 100% plans)
Max Out of Pocket follows HSA OOP limits ($6,250 / $12,500)
No more HSA/HDHP over 30 (maybe)
No lifetime max
Must cover clinical trials
80-85% claims usage or MLR Rebates
Carriers supposed to release initial plans mid march
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18. The Exchanges
Individual and Group offered in
and out of exchanges
No big difference in AZ yet
Potential tax credit
Age banded
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19. Grandfathered plans
If you like your plan you probably can’t keep it
Same plan since March 21, 2010 – any change disallows:
EE contribution increase of 5% or more (based on 2010)
Ded. or OOP max change of 15% or more
Any change to coinsurance even if it is to better it
Increase in copays more than $5 or 15%
Eliminates any benefit
Does the carrier still offer it?
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20. (Partial) Self Insurance
(High Deductible for the Employer)
Still Required Not Required
No lifetime limits Minimum Essential Coverage
No copay preventative High Deductibles & HSAs
Children up to 26 Medical Loss Ratio Limits
Rate limitations (3-1 age limit,
No rescission of coverage
medical underwriting…)
except for fraud
Annual Insurance Fee
Guaranteed Issue &
Renewability
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21. Preparing for 2014
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22. Options Companies are Considering
Partially self insured plans (healthier companies)
Service groups (check with attorney)
Dual option plans
Dropping Coverage (not generally recommended)
Managing size or hours (before July 2013)
Targeted affordability
Strategy must have valid business reason
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23. Sample Report
Discrimination Results
SBC Data Integrity (1 student address missing)
Notice Of Material Changes Sent
Expected March Health Costs: $4,324
Expected Affordability Penalties:
John Smith - Avg Weekly Hours 29.3
Frank Jones – Wages above threshold
Steve Sanders – Qualifies for Credit $250
Total Health Costs $4,574
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24. TAG HCR Compliance
(Preventative ObamaCare)
Product and Program Design
Do you currently offer / can afford to offer coverage?
ROI on choices (self insurance, penalty choices, managing size…)
Employee Monitoring
Compliance Testing & Reporting
Tax Credit Calculation
Education Updates
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