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Health Care Reform Webinar: Play, Pay, or Play Differently?

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How health care reform will affect your business and what you should do about it: http://offers.zanebenefits.com/play-pay-play-differently-webinar

Businesses of all sizes are trying to wrap their heads around health care reform and what it means for your bottom line.

There are new ways for businesses and employees to save a combined 50% on health insurance through the new individual health insurance marketplaces and tax subsidies.

Is your business ready to take advantage of these savings? Should your business play, pay, or play differently?

Business owners, CEOs, human resource departments, insurance professionals, and business consultants should attend this webinar to understand health care reform and help you calculate your health benefits savings.

Slides from this 45-minute webinar include:

- Which health care reform regulations impact your business

- How the new health insurance marketplaces benefit employees

- What it means to "play," "pay," or to "play differently"

- How to design health benefits that save you money and help recruit and retain key employees

- How to calculate your health benefits savings

For recorded version of the webinar see: http://www.zanebenefits.com/play-pay-play-differently-webinar

Slides updated on July 5, 2013 to reflect delay in ACA employer mandate from 2014 to 2015.

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Health Care Reform Webinar: Play, Pay, or Play Differently?

  1. 1. Health Care Reform:Play, Pay, or Play Differently?
  2. 2. The Online Alternative to Group Health Insurance(like 401k for Health Benefits)The ZaneHRA Software provides a 100% paperless administration experience to employers and insuranceprofessionals that want to offer better health benefits without a traditional group health insurance plan at lower costs.For more information about ZaneHRA, check out our Software.Employers use ZaneHRA to open and manage their own stand-alone HRA or defined contribution health plancompletely online, electronically enroll participants and print welcome kits, and monitor expenses andreimbursements in real-time.Employees obtain their own individual health policies from a designated health insurance broker (see below),submit premium and medical expenses online, via fax, or mail, and receive same-day reimbursement via check,payroll addition, or direct deposit. Zane Benefits does not sell health insurance.DISCLAIMERThe information provided herein by Zane Benefits is general in nature and shouldnot be relied on for commercial decisions without conducting independent reviewand analysis and discussing alternatives with legal, accounting, and insuranceadvisors. Furthermore, health insurance regulations differ in each state; informationprovided does not apply to any specific U.S. state except where noted. See alicensed agent for detailed information on your state. www.ZaneBenefits.comFor additional resources onHealth Care Reform, visitwww.zanebenefits.com/blog
  3. 3. Additional FREE Resources: Health Care Reform & Defined ContributionView all of our free eBooks, Whitepapers and On-Demand Webinars at:zanebenefits.com/health-benefits-resources
  4. 4. Agenda1. Why did ACA (or "ObamaCare") get passed?2. What you need to know about "ObamaCare"3. What is the "Individual Health Insurance Marketplace"?4. What is the "Employer Mandate"?5. How to evaluate your "ObamaCare" options6. Summary/Next Steps
  5. 5. Why did ACA (or "ObamaCare") Get Passed?
  6. 6. The Current (Employer-Based) System is NOT SustainableU.S. is shifting to IndividualHealth Insurance
  7. 7. What you need to know about "ObamaCare"
  8. 8. What are Your Options?As a business, you have three primary choices regarding health benefits:1. Play (I.e. Offer Group Health Insurance)2. Pay (I.e. Offer No Health Benefits)3. Play Differently (I.e. Offer a Defined Contribution HRA)For most businesses, Option #3 will save you and your employees up to 50% onhealth insurance.... 401K Analogy.
  9. 9. Heres What You Need to Know!In order to evaluate your options, you must understand the following key"ObamaCare" provisions:1. The NEW Individual Health Insurance Marketplaces2. The NEW "Individual Tax Credits"3. The "Employer Mandate"We will cover all 3 of these provisions today, in order.Note: There are additional impacts of health care reform on employers (e.g. W-2Reporting), but they should not significantly impact your decision making progress.
  10. 10. The Major Changes to the Individual Health Insurance MarketThe "major" provisions primarily affect the individualmarket.Starting January 1st, 2014, the ACA:1. Equalizes Individual and Employer Health Plans2. Requires "Guaranteed Issue"3. Creates a NEW State Individual Health InsuranceMarketplace4. Requires virtually all Americans to purchase coverage (i.e.the "Individual Mandate")"To understand your options, you must understand the NEW Individual Health InsuranceMarketplace!"
  11. 11. What is the "Individual Health Insurance Marketplace"?
  12. 12. What is the Individual Health Insurance Marketplace?Earlier this year, the government re-branded health insurance exchanges as HealthInsurance Marketplaces.The Individual Health Insurance Marketplace is the ACAs health insuranceexchange ("AHBE") for individuals, which provides:1. Individual Plan Standardization (standardizes individual health insuranceproducts within specific metal tiers)2. "Unbiased" Individual Plan Comparison (allows individuals to compare allavailable plans in one place)3. Tax Subsidy Administration (determines tax subsidy eligibility/amount andfacilitates advanced payment)"Helping individuals compare standard individual health insurance options"
  13. 13. Understanding How the Health Insurance Marketplace WorksRecommended to work through a trusted health insurance professional.Step 1: Individual goes to his or her states Individual Health Insurance Marketplacewebsite (e.g. www.coveredca.com).Step 2: Individual completes 1 of 2 applications:i. Application for Insurance with Tax Credit (e.g. sample).ii. Application for Insurance without Tax Credit (e.g. sample).Step 3: Individual health insurance marketplace displays all available plan optionswithin metallic tiers and displayed cost will factor in tax credit.Step 4: Individual selects plan.Step 5: Individual health insurance marketplace bills individual for his or her portion ofpremium (i.e. the total premium minus tax credit) and forwards payment to the carrier.
  14. 14. Advantages of the Individual Health Insurance MarketThe Individual Health Insurance Market will havethe following 4 key advantages:1. Choice2. Portability3. One Stop Shop / Convenience4. Tax Credits
  15. 15. #1 ChoiceIndividuals will be able to choose the health insurance plan that best fits their familiesneeds based on standard metallic levels:Within each metallic level, individuals will be able to choose different combinations of:● co-pays● deductibles● co-insurance● networks
  16. 16. #2 PortabilityIndividual health insurance is not tied to employment, meaning they will be able to taketheir health insurance with them when they switch jobs.This is a major advantage over traditional employer-sponsored health insurance.Portable Memory Analogy
  17. 17. #3 One Stop Shop / ConvenienceOne Application gets individual access to:● All available plan options● Premium tax subsidies
  18. 18. #4 Tax SubsidiesSPECIAL INCENTIVE:Massive tax subsidies* will be available forhouseholds earning up to 400% of the FPL (majorityof Americans).Individuals can only access the premium taxsubsidies through the INDIVIDUAL healthinsurance marketplace.(*Requires Employer to Drop Group Coverage)
  19. 19. Household Income & Size are Key Variables for IndividualsTax subsidy calculator athttp://navigator.zanebenefits.comHousehold Size 100% of FPL 400% of FPL Premium Cap Range1 $11,490 $45,960 $0 - $363.85 / mo2 $15,510 $62,040 $0 - $491.15 / mo3 $19,530 $78,120 $0 - $618.45 / mo4 $23,550 $94,200 $0 - $745.75 / mo5 $27,570 $110,280 $0 - $873.05 / mo6 $31,590 $126,360 $0 - $1,000.35 / mo7 $35,610 $142,440 $0 - $1,127.65 / mo8 $39,630 $158,520 $0 - $1,254.95 / mo2013 FPL GuidelinesAverage Group SinglePremium in 2012 was:$467.92Average Group Familyof 4 Premium in 2012was:$1312.33
  20. 20. Individual Marketplace Notice RequirementEmployers* must provide written notice to all current employees (regardless offull-time/part-time status) about coverage options through the Marketplaces.For details on the notice see:Employer ACA Marketplace Notice RequirementsNotice must be provided to all employees by October 1, 2013, and to newemployees at time of hire thereafter.The Department of Labor has provided two templates for employers to use:1. Employers Offering a Group Health Plan2. Employers Not Offering a Group Health Plan*The notice is required under FLSA.
  21. 21. What is the "Employer Mandate"?
  22. 22. What is the "Employer Mandate"?Starting January 1st, 2014, the "Employer Mandate" (aka "Playor Pay") requires certain LARGE employers to pay a taxpenalty if health insurance is not offered to employees.● SMALL BUSINESSES (< 50 EES) ARE NOT SUBJECTTO "EMPLOYER MANDATE"● Only Applicable Large Employers (>50 FTEs) are subjectto "Employer Mandate"● FTE is the Key Variable for "Employer Mandate"
  23. 23. How to Calculate Full-Time Equivalent Employees (FTEs)How to Calculate Full-Time Equivalent Employees (FTEs)● FTEs = Full-time Employees* + Full-time Equivalent of Part-time Employees*Generally, a full-time employee is an employee who is employed on average atleast 30 hours of service per week in a given month.● Full-time Equivalent of Part-time Employees = Part-time Hours Worked / 120.If your FTE is < 50, you are not subject to "Employer Mandate".If your FTE is > 50, you are subject "Employer Mandate", but tax penalty maynot apply.
  24. 24. An Overview of Tax PenaltyEmployers with less than 50 FTEs are NOT subject to this requirement.If you have >50 FTEs, your monthly penalty is capped by the following formula:Max Tax Penalty ~= (# of Full-Time - 30) * $166.67Example:If you have 60 Full-Time Employees, your max monthly penalty is:~ $5000 (or ~ $0.50 / hour)The actual penalty is based on whether employees receive Tax Credits onIndividual Health Insurance Marketplace... So...TAX PENALTY IS REALLY AN EMPLOYER CONTRIBUTION
  25. 25. Two PotentialEmployer Tax Penalties1. Penalty for Not OfferingInsurance2. Penalty if Insurance is NotAffordable
  26. 26. How to evaluate your "ObamaCare" options
  27. 27. How to Decide Your Health Care Reform Strategy?1. Determine if you are subject to the "Employer Mandate"2. Complete cost analysis of your three options:● Play (Offer a qualified, affordable group health insurance plan)● Pay (Choose to not offer a group health insurance plan, and pay applicablepenalties)● Play Differently (Choose to not offer a group health insurance plan, pay penalties,and offer a defined contribution health plan)If you have < 50 FTEs, the tax penalties do not apply!If you have >= 50 FTEs, you must factor in the cost of the penalties.Tip: See Worksheets in Play orPay Guide
  28. 28. Summary/Next Steps
  29. 29. Summary/Next StepsSummary (cont.)● The Core Problem is that Employer Health Insurance Costs Too Much.● Starting in 2014, the Individual Health Insurance Marketplace will allowindividuals to compare/purchase standard individual plans.● Employees are only eligible for the premium tax subsidies if employer dropscoverage.● In 2014, most businesses will switch to Defined Contribution due to taxsubsidies & guaranteed issue.Next Steps:1. Get educated on Defined Contribution and key health care reform taxissues.2. Start preparing your employees for the transition.
  30. 30. Additional FREE Resources: Health Care Reform & Defined ContributionView all of our free eBooks, Whitepapers and On-DemandWebinars at: zanebenefits.com/health-benefits-resources
  31. 31. The Online Alternative to Group Health Insurance(like 401k for Health Benefits)The ZaneHRA Software provides a 100% paperless administration experience to employers and insuranceprofessionals that want to offer better health benefits without a traditional group health insurance plan at lower costs.For more information about ZaneHRA, check out our Software.Employers use ZaneHRA to open and manage their own stand-alone HRA or defined contribution health plancompletely online, electronically enroll participants and print welcome kits, and monitor expenses andreimbursements in real-time.Employees obtain their own individual health policies from a designated health insurance broker (see below),submit premium and medical expenses online, via fax, or mail, and receive same-day reimbursement via check,payroll addition, or direct deposit. Zane Benefits does not sell health insurance.DISCLAIMERThe information provided herein by Zane Benefits is general in nature and shouldnot be relied on for commercial decisions without conducting independent reviewand analysis and discussing alternatives with legal, accounting, and insuranceadvisors. Furthermore, health insurance regulations differ in each state; informationprovided does not apply to any specific U.S. state except where noted. See alicensed agent for detailed information on your state. www.ZaneBenefits.comFor additional resources onHealth Care Reform, visitwww.zanebenefits.com/blog

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