Small Employer Breakout Group     Andy                 Mike Bertaut                Brandon               Cindy Amedee   Im...
Legal Overview   Cindy M. Amedee       February 26, 2013
Overview of the Law• The Act   o More than 1,000 pages• The Supreme Court Ruling:   o A close call but PPACA is constituti...
Overview of the Law• Far reaching impact• More than 10,000 pages of rules and regulations• Issued by numerous federal agen...
Overview of the Rules & Regs• May effect employers• 2013 deadlines   o Mainly financial                         03        ...
Overview of the Rules & Regs• 2014 deadlines   o Individual & employer coverage mandate   o Health insurance exchanges   o...
Thank you            Cindy Amedee          Attorney, Taylor Porter      Health Care Practice Team cindy.amedee@taylorporte...
Healthcare Reform Update      Brandon Lagarde          February 26, 2013
Overview of Ruling: Legal Perspective• Businesses organized in multiple forms considered as a single employer• Controlled ...
Small Employer Health Insurance Tax Credit •   Allows eligible small employers to claim a 35% credit (25% in the case of t...
Small Employer Health Insurance Tax Credit                                        Average Wage                  $25,000 an...
Expansion of Coverage – Individual Mandate • Individual Mandate    o With limited exceptions, ALL individuals must maintai...
Expansion of Coverage – Individual Mandate • Penalty amount is the lesser of a flat dollar amount of percentage   of incom...
Expansion of Coverage – Individual Mandate • Individual Mandate    o Duty to purchase insurance is mitigated by premium cr...
Expansion of Coverage – Individual Mandate                            Poor             Middle Income    Upper Income    Fe...
Expansion of Medicare Taxes (2013)• Employee portion of Medicare tax increased by 0.9%• Applies to wages or self-employmen...
Expansion of Medicare Taxes (2013)• Individuals, estates and trusts required to pay 3.8% tax on net investment  income suc...
Thank you Brandon Lagarde  Associate Tax Director  blagarde@pncpa.com  Office: 225-922-4600
Healthcare Reform Update      Andy Impastato          February 26, 2013
Agenda•   Grandfathered Plans•   Carve Out Plans•   Exchange Notice•   Essential Health Benefits•   Questions & Answers   ...
Grandfathered (GF) Plans• Impermissible changes   o Elimination of benefits   o Any increase in percentage cost-sharing   ...
Carve Out Plans• Nondiscrimination in favor of highly compensated individuals (HCI)   o Applies to all self-insured plans ...
Exchange Notice• Applies to employers subject to the FLSA• Delayed effective date   o Originally effective for March 1, 20...
Essential Health Benefits• Applies to non-GF, small group plans• Effective for plan years beginning in 2014• Requirements ...
Essential Health Benefits• Essential health benefits   o Categories        Ambulatory patient services        Emergency ...
Essential Health Benefits• Cost-sharing limits   o Out-of pocket limits        Estimated to be $6,250 / $12,500        I...
Essential Health Benefits• Coverage (metallic) levels   o Levels based on actuarial values   o Standard data   o Actuarial...
Thank you    Andy ImpastatoVice President, Client Compliance  healthcarereform@bxsi.com     Office: (225) 336-3238
Time to Implement!Moving Forward with Reform        Mike Bertaut          February 26, 2013
DisclaimerAll information in this presentation INCLUDING THE OPINIONS OF THE PRESENTER are solely forillustrative purposes...
Grandfathered Status• Benchmarked for all groups on 3/23/2010• Requires benefit offer stay essentially the same going forw...
Benefits of Grandfathering• No added cost for new first dollar Women’s coverage.• No added cost for new first dollar USPTF...
New Product Requirements for 2014 and Beyond • All individual and small group           • All essential health benefits   ...
Rate Compression Looms• PPACA puts very strict rules on the Underwriting of Individual and Small Group  Products• Since cu...
The Carrier Tax• PPACA requires insurance carriers  and fully insured groups to make                 TAX ($B)             ...
Could you be an ALE?            FULL TIME   PT HOURS        /120 FTE   TOTAL FTE   AVERAGEJan 2013       22         3300  ...
Thank you Michael R. Bertaut    Healthcare Economist           LINKED-INRecommendations WELCOME!!!  Michael.bertaut@bcbsla...
Small Employer Breakout Group     Andy                 Mike Bertaut                Brandon               Cindy Amedee   Im...
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Health Care Reform - Under 50 Employees

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Health Care Reform - Under 50 Employees

  1. 1. Small Employer Breakout Group Andy Mike Bertaut Brandon Cindy Amedee Impastato LagardeBancorpSouth Insurance Blue Cross Blue Shield Postlethwaite & Taylor PorterServices/Wright & Percy Healthcare Economist Netterville, APAC Attorney, Health Vice President, Exchange Coordinator Associate Tax Director Care Practice Team Client Compliance
  2. 2. Legal Overview Cindy M. Amedee February 26, 2013
  3. 3. Overview of the Law• The Act o More than 1,000 pages• The Supreme Court Ruling: o A close call but PPACA is constitutional 01 Office: 225.381.0279 Email: cindy.amedee@taylorpoter.com
  4. 4. Overview of the Law• Far reaching impact• More than 10,000 pages of rules and regulations• Issued by numerous federal agencies 02 Office: 225.381.0279 Email: cindy.amedee@taylorpoter.com
  5. 5. Overview of the Rules & Regs• May effect employers• 2013 deadlines o Mainly financial 03 Office: 225.381.0279 Email: cindy.amedee@taylorpoter.com
  6. 6. Overview of the Rules & Regs• 2014 deadlines o Individual & employer coverage mandate o Health insurance exchanges o Medicaid expansion? 04 Office: 225.381.0279 Email: cindy.amedee@taylorpoter.com
  7. 7. Thank you Cindy Amedee Attorney, Taylor Porter Health Care Practice Team cindy.amedee@taylorporter.com Office: 225.381.0279
  8. 8. Healthcare Reform Update Brandon Lagarde February 26, 2013
  9. 9. Overview of Ruling: Legal Perspective• Businesses organized in multiple forms considered as a single employer• Controlled group o Parent-subsidiary o Brother-sister o Combination• Affiliated Service Group 01 Office: 225-922-4600 blagarde@pncpa.com
  10. 10. Small Employer Health Insurance Tax Credit • Allows eligible small employers to claim a 35% credit (25% in the case of tax-exempt employers) for premiums paid toward health coverage for its employees in tax years beginning 2010 through 2013. These percents increase to 50% and 35%, respectively, in 2014. • An eligible small employer is an employer that has no more than 25 full-time employees and the average annual compensation of these employees is not greater than $50,000. • The credit is reduced by 6.6667% for each full-time employee in excess of 10 employees and by 4% for each $1,000 that average annual compensation paid to the employee exceeds $25,000. • After 2013, employer must participate in an insurance exchange to be eligible for credit. • Must pay at least 50% of premium for all employees and the percentage must be uniform among all employees 02 Office: 225-922-4600 blagarde@pncpa.com
  11. 11. Small Employer Health Insurance Tax Credit Average Wage $25,000 and $30,000 $35,000 $40,000 $45,000 $50,000 Number of FTEs less 10 and fewer 35% 28% 21% 14% 7% 0% 11 33% 26% 19% 12% 5% 0% 12 30% 23% 16% 9% 2% 0% 13 28% 21% 14% 7% 0% 0% 14 26% 19% 12% 5% 0% 0% 15 23% 16% 9% 2% 0% 0% 16 21% 14% 7% 0% 0% 0% 17 19% 12% 5% 0% 0% 0% 18 16% 9% 2% 0% 0% 0% 19 14% 7% 0% 0% 0% 0% 20 12% 5% 0% 0% 0% 0% 21 9% 2% 0% 0% 0% 0% 22 7% 0% 0% 0% 0% 0% 23 5% 0% 0% 0% 0% 0% 24 2% 0% 0% 0% 0% 0% 25 0% 0% 0% 0% 0% 0% 03 Office: 225-922-4600 blagarde@pncpa.com
  12. 12. Expansion of Coverage – Individual Mandate • Individual Mandate o With limited exceptions, ALL individuals must maintain “minimum essential coverage” or pay a penalty.  Government provided coverage  Employer sponsored coverage  Exchange coverage. • Exemption from mandate o if required contribution to purchase insurance exceeds 8% of household income. o Religious objection o American Indians o Incarcerated Individuals o Those with incomes below the tax filing threshold 04 Office: 225-922-4600 blagarde@pncpa.com
  13. 13. Expansion of Coverage – Individual Mandate • Penalty amount is the lesser of a flat dollar amount of percentage of income. o 2014: $95 or 1% of household income o 2015: $325 or 2% of household income o 2016 and later: $695 or 2.5% of household income 05 Office: 225-922-4600 blagarde@pncpa.com
  14. 14. Expansion of Coverage – Individual Mandate • Individual Mandate o Duty to purchase insurance is mitigated by premium credits and cost- sharing subsidies available to individuals with income between 100%- 400% of federal poverty limit. o Premium assistance is not available if individual has access to employer provided coverage UNLESS:  Too Skinny: Employer coverage provides less than 60% actuarial value.  Too Expensive: Required contribution under employer plan for self-only coverage exceeds 9.5% of household income. 06 Office: 225-922-4600 blagarde@pncpa.com
  15. 15. Expansion of Coverage – Individual Mandate Poor Middle Income Upper Income Federal Assistance Medicaid Subsidies None Premiums limits 2% of income 3% to 9.5% No limit Cost sharing limit 94% 70 – 93% No limit Eligibility < 133% FPL 133 – 400% FPL > 400 FPL Family of 1 < 14.4 14.4 – 43.3 > 43.3 Family of 2 < 19.4 19.4 – 58.3 > 58.3 Family of 3 < 24.4 24.4 – 73.2 > 73.2 Family of 4 < 23.9 23.9 – 88.2 > 88.2 Family of 5 < 34.3 34.3 – 103.2 >103.2 07 Office: 225-922-4600 blagarde@pncpa.com
  16. 16. Expansion of Medicare Taxes (2013)• Employee portion of Medicare tax increased by 0.9%• Applies to wages or self-employment income in excess of $200,000 ($250,000 in the case of a joint return, $125,000 in the case of a married taxpayer filing separately).• The additional Medicare tax increases the employee portion to 2.35% or a total Medicare rate of 3.8%.• Employer has the obligation to withhold the additional tax on wages (without regard to spouse’s wages) if its employee earns more than $200,000; Employee is liable to the extent not withheld by employer.• Self-employed are not allowed a deduction for ½ of the additional 0.9% tax. 08 Office: 225-922-4600 blagarde@pncpa.com
  17. 17. Expansion of Medicare Taxes (2013)• Individuals, estates and trusts required to pay 3.8% tax on net investment income such as interest, dividends, annuities, royalties, rents, capital gains and income from passive activities.• Applies to the income in excess of $250,000 for joint returns, $125,000 for married filing separate and $200,000 for all others 09 Office: 225-922-4600 blagarde@pncpa.com
  18. 18. Thank you Brandon Lagarde Associate Tax Director blagarde@pncpa.com Office: 225-922-4600
  19. 19. Healthcare Reform Update Andy Impastato February 26, 2013
  20. 20. Agenda• Grandfathered Plans• Carve Out Plans• Exchange Notice• Essential Health Benefits• Questions & Answers 01
  21. 21. Grandfathered (GF) Plans• Impermissible changes o Elimination of benefits o Any increase in percentage cost-sharing o Increase in fixed-amount cost-sharing  15% above medical inflation is allowed o Decrease in employer contribution  Five percentage points o Certain changes to annual limits• Disclosure requirements• Recordkeeping requirements 02
  22. 22. Carve Out Plans• Nondiscrimination in favor of highly compensated individuals (HCI) o Applies to all self-insured plans o Applies only to non-GF fully insured plans  Delayed effective date* o Definition of HCI o Eligibility test o Benefits test o Penalties for noncompliance• Other laws 03
  23. 23. Exchange Notice• Applies to employers subject to the FLSA• Delayed effective date o Originally effective for March 1, 2013• Content requirements o Existence, services and contact information of Exchange o Eligibility of premium tax credit or cost-sharing reduction o Consequences of dropping employer coverage• Model Notice? 04
  24. 24. Essential Health Benefits• Applies to non-GF, small group plans• Effective for plan years beginning in 2014• Requirements o Provide essential health benefits o Limit cost-sharing o Provide either bronze, silver, gold or platinum coverage (or catastrophic plan for individuals) 05
  25. 25. Essential Health Benefits• Essential health benefits o Categories  Ambulatory patient services  Emergency services  Hospitalization  Maternity and newborn care  Mental health and substance abuse  Prescription drugs  Rehabilitative and habilitative services and devices  Laboratory services  Preventive and wellness services  Pediatric services (includes oral and vision care) 06
  26. 26. Essential Health Benefits• Cost-sharing limits o Out-of pocket limits  Estimated to be $6,250 / $12,500  Includes deductibles, co-payments and coinsurance • Deductible limits  Will be $2,000 / $4,000  May be increased by maximum reimbursement available to participant under FSA 07
  27. 27. Essential Health Benefits• Coverage (metallic) levels o Levels based on actuarial values o Standard data o Actuarial value calculator tool• Benchmark plan o Designated by individual States o Based on largest products sold in State or by HHS in the absence of State action 08
  28. 28. Thank you Andy ImpastatoVice President, Client Compliance healthcarereform@bxsi.com Office: (225) 336-3238
  29. 29. Time to Implement!Moving Forward with Reform Mike Bertaut February 26, 2013
  30. 30. DisclaimerAll information in this presentation INCLUDING THE OPINIONS OF THE PRESENTER are solely forillustrative purposes. The information is based on certain assumptions, interpretations, and calculations thatare not necessarily accurate with regard to provisions of PPACA, HCERA, HIPAA, COBRA, ERISA, andother rules, regulations, guidance and all other documents issued by relevant state and federal agencies withregard to these laws and any other relevant laws. The information provided should not beconsidered as legal, financial, accounting, planning, or tax advice. You should consult yourattorneys, accountants, and other employees or experts of this type of this type of advice based on theirown interpretations, calculations, and determinations of applicable laws, rules, regulations, guidance, andany other documents and information that they determine may be relevant. The authors make noguarantees or other representations as to the accuracy or completeness of the data in this presentation.BCBSLA expressly disclaims any liability for information obtained from use of this presentation by anyBCBSLA employee or by any other person. No warranty of any kind is given with regard to the contents ofthe presentation. 01 Office: 225-297-2719 michael.bertaut@bcbsla.com
  31. 31. Grandfathered Status• Benchmarked for all groups on 3/23/2010• Requires benefit offer stay essentially the same going forward o Must not change coverage or co-insurance shares, very small adjustments to cost sharing and premium shares to employee allowed.• Allows Group to forego several new types of mandatory coverage, avoid new costs, and bypass compliance with some expensive new regulations• Grandfathered pools of groups, in general, have lower healthcare costs and premiums 02 Office: 225-297-2719 michael.bertaut@bcbsla.com
  32. 32. Benefits of Grandfathering• No added cost for new first dollar Women’s coverage.• No added cost for new first dollar USPTF schedule B testing and immunizations.• Continued rating segregation from non-grandfathered groups and new richer plans.• No higher ER reimbursements required.• In most cases group can keep existing benefit combinations when new rules take effect in 2014.• No requirements to cover experimental treatments. ***Does not protect from the ALE requirements*** 03 Office: 225-297-2719 michael.bertaut@bcbsla.com
  33. 33. New Product Requirements for 2014 and Beyond • All individual and small group • All essential health benefits (2-50) products MUST meet must be covered. Actuarial standard Tests and • GF groups can keep existing cover all essential health plans, otherwise: benefits. • Actuarial Value Standards: • Deductibles over $2,000 o Bronze = 58-62% generally prohibited o Silver = 68-72% • Max out of pocket costs o Gold = 78-82% o Platinum = 88-92% limited to H.S.A. levels. Groupcare PPO is minimum coverage. 70% of existing products will go away. 04 Office: 225-297-2719 michael.bertaut@bcbsla.com
  34. 34. Rate Compression Looms• PPACA puts very strict rules on the Underwriting of Individual and Small Group Products• Since current SGUR in Louisiana allow for 50% spread of rates above and below the mean (new selling rate) in the 2-35(50) pool, taking away rating based on medical claims and only allowing a 3:1 age spread will severely compress rates in this pool• We have identified thousands of groups who will be required to absorb rate increases in excess of 40%.• Act requires all QHP’s to be underwritten based on three criteria ONLY: o Age Banded no more than 3:1 o Geographic Allowance 1.5:1 o Tobacco Use 1.5:1 o (Family status will affect rates per household) 05 Office: 225-297-2719 michael.bertaut@bcbsla.com
  35. 35. The Carrier Tax• PPACA requires insurance carriers and fully insured groups to make TAX ($B) BCBSLA BASE RATE TAX ($M) “contributions” to support subsidies INCREASE on the Exchange. 2014 $8.0 $36.3 2.5% 2015 $11.3 $51.2 3.5%• All carriers with fully insured 2016 $11.3 $55.8 3.5% premiums are assessed as part of the 2017 $13.9 $68.6 4.3% “Bucket Tax” on health insurance 2018 $14.3 $71.7 4.5% carriers (technically a “fee”) $14.3+ Plus Premium Plus Premium 2019 Premium• Note that the effect of this new “fee” Inflation Inflation Inflation is enhanced in rates because it is not a deductible business expense. 06 Office: 225-297-2719 michael.bertaut@bcbsla.com
  36. 36. Could you be an ALE? FULL TIME PT HOURS /120 FTE TOTAL FTE AVERAGEJan 2013 22 3300 27.5 49.5Feb 2013 23 2800 23.3 46.3Mar 2013 23 3250 27.1 50.1Apr 2013 23 3450 28.8 51.8May 2013 24 3105 25.9 49.9June 2013 22 3271 27.3 49.3July 2013 23 3655 30.5 53.5Aug 2013 24 3705 30.9 54.9Sept 2013 25 3000 25.0 50.0Oct 2013 26 3800 31.7 57.7Nov 2013 27 3950 32.9 59.9Dec 2013 30 4250 35.4 65.4 53 07 Office: 225-297-2719 michael.bertaut@bcbsla.com
  37. 37. Thank you Michael R. Bertaut Healthcare Economist LINKED-INRecommendations WELCOME!!! Michael.bertaut@bcbsla.com Office: 225-297-2719 Cell: 225-573-2092
  38. 38. Small Employer Breakout Group Andy Mike Bertaut Brandon Cindy Amedee Impastato LagardeBancorpSouth Insurance Blue Cross Blue Shield Postlethwaite & Taylor PorterServices/Wright & Percy Healthcare Economist Netterville, APAC Attorney, Health Vice President, Exchange Coordinator Associate Tax Director Care Practice Team Client Compliance

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