GRA Special Session: Health Care Reform

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The Georgia Restaurant Association Presents
Special Session: Health Care Reform
June 7, 2010, 2-4:30 pm

Where: Hotel Palomar Atlanta Midtown
866 West Peachtree Street NW
Atlanta, GA 30308

Speakers:
- Kat Cole, Hooters of America, Inc.
- Patrick Cuccaro, Affairs to Remember Caterers
- Debi Elkins, AFC Enterprises
- Michael Rummel, Tappan Street Restaurant Group
- Kelvin Slater, Blue Moon Pizza

Free to GRA & ACF Restaurant Members in Good Standing

Published in: Business, Economy & Finance
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  • What we are presenting here today is the best information we know as of right now. As guidance and regulations are developed over the next several years and beyond, more details will become known. Think of the bill that passed as the outline, and the regulatory process as filling in all the details. But we know you don’t have the luxury of the years it will take to develop the regulations and you need to start thinking about how this will impact your business now. Which is why we are here talking about this new law today. What we will present today is meant to give you a general understanding of what is in this massive new law and how it could impact your businesses. Nothing we say here today should be considered legal or financial guidance or advice.
  • Regardless of whether the employer requirements for coverage or liability for penalties applies to you, there are things that every employer needs to know. Grandfathered plan: We expect guidance from HHS very soon. (i.e. how to maintain status, what you can change in the plan without loosing status) Exchange: This is where individuals can use premium tax credits (subsidies) to access minimum essential coverage. Small businesses will also be able to buy coverage for their employees there as well. 1099 Reporting : we Expect IRS to issue guidance in this area soon.
  • Here are some introductory questions that should help you as you think about how this massive new law will apply to you. We’ll refer back to these questions as we work through the requirements of the bill.
  • Common Control is an existing concept in the tax code that has been used in other areas of the business (like overtime). Rules for determining Common Control are very intricate and technical. Those with multiple restaurant organizations should consult their tax advisor to determine if they would be considered a single employer. Even if the ownership requirement is satisfied, based on the other rules an employer may single not be a single employer. Generalized examples: If single restaurateur owns 100% of 3 S-corps, for purposes of the new law, the 3 S-corps would be treated as a single employer. If restaurateur 1 and 2 own 90% of Partnership A and 50% of Corporation B, restaurant organizations A and B would not be considered a single employer. If restaurateur 1 and 2 own 90% of Partnership A and 80% of Corporation B, restaurant organizations A and B would be considered a single employer.
  • How many… Full-time? Part-time? Seasonal Full-time? Seasonal Part-time?
  • Here is the formula to use in determining if you fall above or below the 50 full-time equivalent threshold. Part-time workers aggregate hours count towards the number of full-time equivalents (the 50 threshold). Employers are NOT required to provide health coverage or pay penalties for any part-time employees. Seasonal workers (full and part) are not included in this threshold calculation – BUT if they work more than 30 hours for you, you must offer coverage or may be liable for a penalty (because they are full-time).
  • If you are under the small business threshold of 50 full-time equivalents and meet these requirements, this tax credit may be available to you… PLEASE NOTE that this full-time equivalent is based on 40 hours per week…
  • So what does the law require of you if you are determined to be a large employer with more than 50 full-time equivalents? Offer – not provide coverage Affordable – employee contribution must be less than 9.5% of household income Minimum essential coverage – yet to be fully defined by regulations (Actuarial value does not refer to premiums) (An average employer plan you might have for yourself today is probably around 65% actuarial value and about $300 per month)
  • These penalties are applied only if on full-time employee accesses the exchange using a premium tax credit or subsidy. If they do not but you still are not providing coverage, the employer is not subject to the penalty. $2000 annual or $167 monthly $3000 annual or $250 monthly
  • Individual mandate: Penalty is the greater of $695 per calendar year (2016) OR up to 2.5% of income.
  • GRA Special Session: Health Care Reform

    1. 1. Welcome to the Georgia Restaurant Association Healthcare Special Session: What You Need To Know June 7, 2010
    2. 2. <ul><li>Patrick Cuccaro, General Manager, Affairs to Remember Caterers </li></ul><ul><li>Secretary, Georgia Restaurant Association Executive Committee </li></ul><ul><li>Chair, Catering Roundtable </li></ul>Welcome & Opening Remarks
    3. 3. Thank You To Our Meeting Host Recently named one of Esquire’s “Best New Restaurants of 2009,” Pacci Ristorante is the modern translation of the classic Italian steakhouse.  Pacci combines the flavors and timeless elegance of Old World Italy with the urban lifestyle of Midtown Atlanta.  Executive Chef Keira Moritz’s signature menu includes the use of fresh and seasonal ingredients in each dish.  This restaurant truly reflects a warm sense of Italian conviviality, offering Atlantans fine food for every meal of the day, and meals for every occasion.  Pacci also features a stylish rooftop bar and lounge area called AltoRex Rooftop Lounge. 
    4. 4. Thank You To Our Sponsors Since 1868, J. Smith Lanier & Co. has remained one of the nation’s leading insurance brokerage, employee benefits and risk management consulting firms. Through a network of offices spanning across five southeastern states, our employee shareholders provide an unmatched commitment and responsiveness to everyone we serve.  
    5. 5. Thank You To Our Sponsors UnitedHealthcare (www.unitedhealthcare.com) provides a full spectrum of consumer-oriented health benefit plans and services. The company organizes access to quality, affordable health care services on behalf of more than 25 million individual consumers, contracting directly with more than 560,000 physicians and care professionals and 4,800 hospitals nationwide to offer them broad, convenient access to services nationwide.    
    6. 6. <ul><li>Kat Cole, Vice President, Hooters of America, Inc. </li></ul><ul><li>Chair, Georgia Restaurant Association Executive Committee </li></ul><ul><li>Chair, Georgia Restaurant Association PAC Board </li></ul>Presentation of NRA Information
    7. 7. PUBLIC POLICY CONTEXT
    8. 8. Overview and Status <ul><li>H.R. 3590, Patient Protection and Affordable Care Act, signed by President into law (PL 111-148) on March 23, 2010. </li></ul><ul><li>H.R. 4872, the Health Care and Education Reconciliation Act of 2010, modified PL 111-148 and signed into law on March 30, 2010. </li></ul><ul><li>Over the next several years, federal and state agencies will write regulations to clarify and implement the law. </li></ul><ul><ul><li>For example: Dept. of Labor, Dept. of Health and Human Services, Internal Revenue Service. </li></ul></ul><ul><li>The Association will be actively engaged in the regulatory process. </li></ul>
    9. 9. Implementation Timeline
    10. 10. Implementation Timeline <ul><li>2010 </li></ul><ul><li>Small business tax credit available 1/1/2010. </li></ul><ul><li>HHS informational website established – 7/1/2010. </li></ul><ul><li>Grandfathered plans – some changes required for plan years beginning after 9/23/2010. </li></ul><ul><li>2011 </li></ul><ul><li>Employer report health care coverage costs on W-2 forms – Applies to tax years beginning after 12/31/2010. </li></ul><ul><li>Flexible Spending Account contribution limits begin – no more than $2500, Begins 2011, indexed in 2013. </li></ul><ul><li>Over-the-counter medicines may no longer be reimbursed under HRAs, HSAs, FSAs beginning 1/1/2011. </li></ul><ul><li>Increased penalty to 20% for non-qualified medical expenses from HSAs/Archer MSAs, Begins 1/1/2011. </li></ul>
    11. 11. Implementation Timeline (cont’d) <ul><li>2012 </li></ul><ul><li>Employer 1099 reporting for payments >$600 to corporate providers of property and services. Applies after 12/31/2011. </li></ul><ul><li>2013 </li></ul><ul><li>Medicare Contribution Tax (3.8%) now applied on unearned income (over $200K/$250K) Begins 1/1/2013. </li></ul><ul><li>Increase in Medicare Hospital Insurance Tax for $200k/$250K taxpayers. Employee pays entire .9% increase in tax. Begins 1/1/2013. </li></ul><ul><li>All employers must provide employees written notice about exchanges, how to contact exchange, etc. Begins 3/1/2013. </li></ul>
    12. 12. Implementation Timeline (cont’d) <ul><li>2014 </li></ul><ul><li>Exchanges open in each state for individual and small group markets. </li></ul><ul><li>Individual mandate begins </li></ul><ul><li>Employer responsibilities begin </li></ul><ul><li>90 day waiting period allowed </li></ul><ul><li>Automatic enrollment for employers with 200+ employees </li></ul><ul><li>Grandfathered plans – further insurance reforms apply </li></ul><ul><li>2017 </li></ul><ul><li>Large employer participation in exchanges allowed; requires state-by-state action. </li></ul>
    13. 13. What Does The Law Require?
    14. 14. What ALL Restaurateurs Need to Know <ul><li>Grandfathered Plans: Plan that existed as of 3/23/2010, not subject to some of the changes in the law. </li></ul><ul><li>Exchanges: Marketplace for individual and small group plans, to be set up by each State. </li></ul><ul><li>Notification Requirements: All employers must provide written notice at the time of hiring about the exchange (3/1/2013) </li></ul><ul><li>Disclose the value of health benefits on W-2 form (2011) </li></ul><ul><li>1099 Reporting: Issue for any amount greater than $600 to corporate providers of property and services (2012) </li></ul>
    15. 15. How Does the Law Apply To Me? <ul><li>Are you a single employer? </li></ul><ul><ul><li>How many restaurants? What is their ownership structure? </li></ul></ul><ul><li>How many employees do you have? (monthly calculation) </li></ul><ul><ul><li>Full-time ( >30 per week in a month) __________ </li></ul></ul><ul><ul><li>Part-time workers total hours in a month __________ </li></ul></ul><ul><ul><li>Seasonal workers </li></ul></ul><ul><ul><li>part-time __________ </li></ul></ul><ul><ul><li>full-time __________ </li></ul></ul><ul><li>Calculate your number of full-time equivalent employees (50 full-time equivalent employee threshold). </li></ul><ul><ul><li>If below…exempt from coverage requirements or penalties </li></ul></ul><ul><ul><li>If above…provide coverage or pay penalties on full-time workers. </li></ul></ul><ul><li>Are you eligible for the small business tax credit? </li></ul><ul><li>Comply with large employer requirements, if applicable. </li></ul><ul><li>Comply with the requirements applicable to all employers. </li></ul>
    16. 16. 1. Are you a single employer? <ul><li>Defined by “Common Control Clause” of the tax code – consult a tax advisor. </li></ul><ul><li>Ownership requirement: In order for 2 or more restaurant organizations to be considered a single employer under Common Control, each restaurant organization must be 80% owned by the same 5 or fewer owners. </li></ul>
    17. 17. 2. How many employees do you have? <ul><li>Full-time Employee: “With respect to any given month, an employee who is employed on average at least 30 hours of service per week.” </li></ul><ul><li>Part-time Employee: Employers not required to provide health coverage nor pay any penalties on part-time workers. However, for determining if you are above or below the small business threshold, must consider part-time employees. </li></ul><ul><li>Seasonal Workers: ≤120 days. Not counted for purposes of the small business threshold. May be counted towards penalties based on their full-time status. </li></ul>
    18. 18. 3. Calculate the number of full-time equivalents. # Full-time Employees (30 hours/wk) Total hours worked by part-time employees /120 hours # Full-time equivalents used solely for determining threshold + = <ul><li>If an employer has fewer than 50 full-time equivalents… </li></ul><ul><ul><li>Employer is exempt from providing coverage </li></ul></ul><ul><ul><li>Employer is exempt from penalties </li></ul></ul>
    19. 19. 4. Are you eligible for the small business tax credit? <ul><li>Small Business Tax Credit: Available 1/1/2010 (after 2014, for 2 years) for those who provide coverage. </li></ul><ul><li>Full credit to employers who: </li></ul><ul><li>Have 10 or fewer “full-time equivalent employees”; </li></ul><ul><li>With average annual wages less than $25,000; and </li></ul><ul><li>Contribute at least 50% of the premium. </li></ul><ul><li>Phase out up to 25 full-time equivalents and $50,000 </li></ul><ul><li>www.IRS.gov for more information; postcards mailed out </li></ul>
    20. 20. 5. Comply with large employer requirements, if applicable. <ul><li>Starting in 2014, “large” employers must offer affordable “minimum essential coverage” to their full-time employees. </li></ul><ul><li>Minimum Essential Coverage: </li></ul><ul><li>Sec. of HHS to define essential health benefits </li></ul><ul><li>Prohibits out-of-pocket limits greater than the HSA (2010: $5,950 self, $11,900 family). </li></ul><ul><li>Provide either Bronze (60% actuarial value), Silver (70%), Gold (80%), Platinum (90%) level of coverage. </li></ul><ul><li>Catastrophic plan is not minimum essential coverage. </li></ul>
    21. 21. Possible Outcomes For Large Employers <ul><li>Does not offer coverage: $2000 annual penalty per full-time employee. </li></ul><ul><li>Does offer coverage: $3000 per full-time employee access insurance on exchange with tax credit. </li></ul><ul><li>Does offer coverage: free choice voucher (8-9.5% of employees’ household income). </li></ul><ul><li>Allowed to exclude the first 30 full-time employees when calculating $2000 annual penalty amount or maximum limit on $3000 penalty. </li></ul>
    22. 22. What “Large” Businesses Need to Know <ul><li>Certification to IRS that offer minimum essential coverage, provide to employee as well (Begins 2014). </li></ul><ul><li>Waiting Period: Large employers allowed up to 90 days waiting period before enrolling new full-time employees in health plan (Begins 2014). </li></ul><ul><li>Automatic Enrollment: Employers with 200+ full-time employees must automatically enroll new full-time employees in an employer-sponsored plan. </li></ul>
    23. 23. Other Provisions to Know <ul><li>Reasonable Break Time for Nursing Mothers: Amends FLSA, effective 3/23/2010. </li></ul><ul><li>Employer-Offered Wellness Programs: Able to continue to offer and are encouraged enhance these programs. </li></ul><ul><li>Nutritional Disclosure: Applies to restaurants with 20 or more locations nationwide; provide calorie counts on menus and menu boards and additional nutritional data upon request. More information available at www.restaurant.org/foodandhealthyliving </li></ul>
    24. 24. Other Provisions To Know <ul><li>New and Expanded Medicare Taxes: Applies to taxpayers earning $200,000/$250,000 (2013). </li></ul><ul><li>Over-the-counter medicines are no longer considered medical expense for Health Savings Accounts, etc. (2011) </li></ul><ul><li>Limitation on FSAs to $2,500 (2011) </li></ul><ul><li>Individual Mandate: Requires individuals to obtain “minimum essential coverage” for themselves and dependents (2014) </li></ul>
    25. 25. Cost Factors: Other Ways This Affects You <ul><li>Increased cost to insurers / health plans administrators </li></ul><ul><li>Additional restaurant staff time to administer new requirements: </li></ul><ul><li>1099 reporting </li></ul><ul><li>Employee communications (required and needed to help them understand health care reform) </li></ul><ul><li>High cost excise tax reporting to insurers / administrators </li></ul><ul><li>Payroll changes </li></ul><ul><li>Increased cost to suppliers </li></ul>
    26. 26. Restaurant Employee Workforce Issues <ul><li>Expectation by employee to provide coverage </li></ul><ul><li>Available of state insurance exchange options in 2014 </li></ul><ul><li>Seasonal workforce </li></ul><ul><li>Demographics create unique challenges </li></ul><ul><li>Managing employee growth against loss of employer tax credits (25 FTEs) or possibility of penalties (50 FTEs) </li></ul>
    27. 27. Recruitment and Retention in the Restaurant Industry <ul><li>Greater mobility due to presence of exchanges </li></ul><ul><li>How will health plan offerings be viewed as a factor in accepting an offer for employment </li></ul><ul><li>Greater focus on wages </li></ul>
    28. 28. Additional Restaurant Administration <ul><li>Required employee communications </li></ul><ul><li>Coordination with state exchanges </li></ul><ul><li>Payroll changes </li></ul><ul><li>Excise tax reporting requirements </li></ul><ul><li>Validation of penalty payments from federal government </li></ul><ul><li>Outcomes research fees </li></ul><ul><li>Flexible spending account changes (amount and eligible expenses) </li></ul><ul><li>Auto-enrollment (200 employees) </li></ul><ul><li>W2 reporting </li></ul><ul><li>Corporate information reporting (1099s) </li></ul>
    29. 29. Going Forward <ul><li>Important to understand the legislation and prepare for changes now, understanding 1, 2 and 3 year priorities </li></ul><ul><li>The process did not end when the President signed the health care reform legislation into law -- guidance will continue to be provided with regard to how the law is interpreted (regulatory process) </li></ul><ul><li>The NRA & GRA will continue to provide support to member organizations as the process continues </li></ul>
    30. 30. Next Steps: - Prioritize activities based on the little concrete information you have now with a focus on 2011 and 2012 - Keep these changes in mind as you plan and work with payroll companies, computer support systems and set up business plans - Stay tuned into/logged onto www.garestaurants.org for updates and stay connected with peers in the industry in GA
    31. 31. What’s Being Done for You: - NRA & GRA continuing advocacy through regulatory process at state and national level - NRA partnering with nations largest Health Services Company, United Healthcare - Developing products for individuals, small groups, large groups, specialty lines, TPA services For more information, visit www.restauranthealthcare.org www.garestaurants.org
    32. 32. Panel Discussion <ul><li>Moderator: Patrick Cuccaro, Affairs to Remember Caterers </li></ul><ul><li>Kat Cole, Hooters of America, Inc. </li></ul><ul><li>Debi Elkins, AFC Enterprises </li></ul><ul><li>Michael Rummel, Tappan Street Restaurant Group </li></ul><ul><li>Kelvin Slater, Blue Moon Pizza </li></ul>
    33. 33. <ul><li>Patrick Cuccaro, General Manager, Affairs to Remember Caterers </li></ul><ul><li>Secretary, Georgia Restaurant Association Executive Committee </li></ul><ul><li>Chair, Catering Roundtable </li></ul>Closing & Announcements
    34. 34. Upcoming Workshop: Menu Labeling When: June 29, 2010 from 2-4pm Where: Taco Mac Prado Speakers: -Charles Hoff, Law Office of Charles Y. Hoff -Amanda Rieter, NRA State Strategy & Policy -Lucy Needham, CEO FoodCALC® Free to GRA Restaurant Members, RSVP to Kaitlin Follrath at [email_address] or 404.467.9000.      
    35. 35. On the Menu: Restaurateur to Restaurateur Best Practices Forum <ul><li>Tuesday, June 15 th, 2-4:30 pm </li></ul><ul><li>Rosebud with Chef Ron Eyester </li></ul><ul><ul><li>The New Era of the Neighborhood Restaurant and the Many Roles of the Chef </li></ul></ul><ul><li>Tuesday, October 19 th, 2-4:30 pm </li></ul><ul><li>Pacci Ristorante with Executive Chef Keira Moritz </li></ul>
    36. 36. <ul><li>Chocolate for Cystic Fibrosis Foundation </li></ul><ul><ul><li>June 17 th , 6-10 pm – www.chocolateforcf.com </li></ul></ul><ul><li>Great American Dine Out </li></ul><ul><ul><li>September 19-25, www.GreatAmericanDineOut.org </li></ul></ul><ul><li>Restaurant Neighbor Awards </li></ul><ul><ul><li>Deadline: June 11 th </li></ul></ul><ul><ul><li>$5,000 Prize </li></ul></ul><ul><ul><li>www.restaurant.org </li></ul></ul>Community Involvement
    37. 37. <ul><li>Wings & Waffles: Cobb Co. Hospitality Day </li></ul><ul><li>When: Wednesday, June 16th, 6:00-7:30pm </li></ul><ul><li>Where: Hooters – Cumberland Pkwy: 2977 Cumberland Parkway SE, Atlanta, GA 30339 </li></ul><ul><li>Suggested Contribution: $50.00 </li></ul><ul><li>A fundraiser benefiting the Georgia Restaurant Association Political Action Committee </li></ul><ul><li>Hosted by Kat Cole, Hooters of America, Inc. and Charlie Crowder, Royal Waffle King. Recognizing the contributions of our elected officials and leaders in the Cobb County Foodservice Hospitality Industry. </li></ul><ul><li>Atlanta-Fulton County Hospitality Day </li></ul><ul><li>When: Monday, June 21st, 6:00-7:30pm </li></ul><ul><li>Where: Max Lager’s Wood-Fired Grill & Brewery: 320 Peachtree Street, Atlanta, GA 30308 </li></ul><ul><li>Suggested Contribution: $25 GRA Members, $35 Non GRA Members </li></ul><ul><li>A fundraiser benefiting the Georgia Restaurant Association Political Action Committee </li></ul><ul><li>Hosted by Alan & Cindy LeBlanc of Max Lager’s Wood-Fired Grill & Brewery. Recognizing the contributions of our elected officials and leaders in the Atlanta-Fulton County Foodservice Hospitality Industry. </li></ul>Political Advocacy
    38. 38. <ul><li>Join Us for a Chef’s Tasting & Networking Reception Compliments of Chef Keira Moritz and Pacci Ristorante at the Palomar Hotel Midtown Atlanta </li></ul>Networking Reception
    39. 39. Thank You For Attending the Georgia Restaurant Association Healthcare Special Session: What You Need To Know June 7, 2010

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