Pay or Play?


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"Should I provide health insurance for my employees?" The process for determining the cost of providing health care benefits and the impact of health benefits an retaining and attracting best-in-class employees.

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Pay or Play?

  1. 1. E D U C A T I O N S E R I E S <br />Pay or Play?<br />Date: August 10, 2010<br />Presented by:<br />Dominic Franchini<br />Vice President Market Development, HORAN<br />William Freedman<br />Attorney, Dinsmore & Shohl<br />Marty Howard, CPA<br />Cassedy Schiller <br />
  2. 2. Agenda - Pay or Play<br />Define the regulation, employers affected and timeline<br />Review the moving parts<br />Model options and costs<br />Identify tax consequences<br />Discuss employer notification requirements<br />Share other key points to consider<br />
  3. 3. Regulation Highlights<br />Beginning in 2014, individuals must maintain “minimum essential coverage” or pay a penalty<br />Applicable large employers with 50 FTE’s may owe penalties<br />Failure to offer “minimum essential” health coverage <br />Offering “minimum essential” health coverage that is not affordable<br />Full time employee = 30 hours or more per week<br />Full time employees may be eligible to purchase coverage through exchange<br />Full time employee may qualify for premium credit<br />
  4. 4. Who is affected<br />Businesses with 49 employees or less<br />Exempt from pay or play mandates<br />Businesses with 25 employees or less<br />Exempt from pay or play mandates<br />Eligible for tax incentives IF currently offering group health benefits<br />Businesses with 50 or more employees<br />Required to comply with pay or play mandates<br />
  5. 5. Timelines<br />Insurance as “usual” until 2014<br />New discrimination rules<br />New underwriting requirements<br />W-2 reporting of 2011 benefits<br />Small business tax credit 2010 - 2013<br />Exchanges established by January 1, 2014<br />Pay or Play begins January 1, 2014<br />
  6. 6. Things to Consider<br />How much does insurance cost my company today?<br />How much would I pay in penalties?<br />Is my benefit plan design compliant? Cost to change benefit design?<br />Do I have employees a 100% to 400% federal poverty guideline?<br />Is my contribution affordable for those employees?<br />How much would penalty be for employees receiving assistance?<br />How would employees purchase insurance outside employer? Cost?<br />
  7. 7. For Example<br />
  8. 8. 8<br />Employer Notification <br /> Required notifications to employees (Not later than March 1, 2013)<br /> Existence of an Exchange, description of services, how to get assistance<br /> Employer plan’s share of total allowed cost is less than 60%, eligibility for premium tax credit<br /> Purchase of health plan through exchange, outside free choice voucher, may forfeit employer contribution and tax deduction<br /> Required notifications to Secretary of Treasury<br /> Name / Address / TIN # / months enrolled for all FTE<br /> Waiting period<br /> Months during year coverage is available<br /> Monthly premium for lowest cost option<br /> Employer’s share of total allowed cost <br />
  9. 9. Common Considerations<br />Divisions / Common ownership<br />Cafeteria plan<br />1099 employees<br />Contributions defined as % income<br />