- The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010, aiming to expand health insurance coverage to 32 million Americans currently uninsured at an estimated cost of $1.2 trillion over 10 years. - Key provisions include eliminating pre-existing condition limitations, coverage for children until age 26, preventing annual/lifetime coverage limits, and requiring individuals to have health insurance or pay a penalty. - Implementation of provisions occurs between 2010-2020, with major changes such as health insurance exchanges and penalties for uninsured individuals beginning in 2014.

1. Healthcare
Reform
Jon Zeisler, Director, Group Benefits
January 13, 2012
Thrive. Grow. Achieve.

2. HEALTHCARE REFORM
SUMMARY
• Patient Protection and Affordable Care Act (PPACA) signed in to law on March
23, 2010
• Health Care and Education Reconciliation Act (HCERA) signed in to law on
March 30, 2010 – amended PPACA
• Estimated $1.2 TRILLION cost over the next 10 years
• Expands coverage to 32 million Americans that are currently uninsured
• Not health care reform, rather health insurance reform
Health Care Reform/ Page 2

3. HEALTHCARE REFORM
REVIEW - 2010 CHANGES
• Eliminate annual and lifetime coverage limits on “essential” benefits
• Eliminate pre-existing condition limitations for children under age 19
• Provide for coverage for children until age 26
• Emergency services are all paid “in-network”
• Preventive care must be provided at no cost to member
• Member may designate any in-network doctor as a primary care physician
Health Care Reform/ Page 3

4. HEALTHCARE REFORM
REVIEW - 2011 CHANGES
• Over-the-counter medications cannot be reimbursed under a FSA, HRA or HSA
plan, unless prescribed by a physician
• Medical Loss Ratios (MLRs) are established (85% for large groups and 80% for
small groups), and if MLR is not met, premium rebates must be issued by August
1st of the following year
• Employers MAY begin reporting value of health plans on W-2s
• HSA penalties increase from 10% to 20% for distributions for non-qualified
medical expenses
• Non-discrimination rules apply to all health plans (regs delayed to 2012)
Health Care Reform/ Page 4

5. HEALTHCARE REFORM
EFFECTIVE 2012
• Federal research fee of $1 per enrolled employee per month (PY after 10/1/12)
• Standardized Summary of Benefits and Coverage (regs delayed)
• Employers issuing more than 250 W-2s must begin reporting value of health
plans on W-2s (issued in January 2013)
• Medical FSA limit applies for fiscal year plans
• First year for employers to receive MLR rebates from 2011 plans
Health Care Reform/ Page 5

6. HEALTHCARE REFORM
EFFECTIVE 2013
• Contributions to Medical FSA plans are capped at $2,500
• Medicare Payroll Tax will be expanded to include unearned income….a 3.8% tax
on investment income for individuals making more than $200K per year ($250K
per family)
• Employee Medicare Tax increases to 2.35% for Medicare wages in excess of
$200K per individual ($250K per family)
• Federal research fee increases from $1 to $2 per enrolled employee per month
Health Care Reform/ Page 6

7. HEALTHCARE REFORM
EFFECTIVE 2013 (CONT.)
• Eliminate the tax-deduction for employers who receive Medicare Part D
retiree drug subsidy payments
• All employers must begin reporting value of health plans on W-2s (issued in
January 2014)
Health Care Reform/ Page 7

8. HEALTHCARE REFORM
EFFECTIVE 2014
• Eliminate annual and lifetime coverage limits on “non-essential” benefits
• Eliminate pre-existing condition limitations for ALL
• Health insurance exchanges begin to operate for businesses with <100
employees
• All U.S. Citizens MUST purchase health insurance or pay an annual fine of $95 or
1% of income, whichever is greater
• Employers with 50 or more employees are required to offer employer-sponsored
health plan, OR pay a penalty of $2,000 for each FTE in excess of 30 employees
Health Care Reform/ Page 8

9. HEALTHCARE REFORM
EFFECTIVE 2014 (CONT.)
• If employer-sponsored health plan premium exceeds 9.5% (??) of an employee’s
family income, and employee opts out, employer will pay a penalty of $3,000 per
employee
• Must auto-enroll all new employees for groups with 200+ employees (employees
can opt-out)
• Waiting periods cannot exceed 90 days
• The incentive cap on wellness programs increases from 20% to 30% while HHS
has the discretion to further increase this figure to 50%.
• New employer reporting to IRS
Health Care Reform/ Page 9

10. HEALTHCARE REFORM
EFFECTIVE 2015
• Health insurance penalty tax increases to $325 per uninsured adult and up to
$975 per household, or 2% of income, whichever is greater
Health Care Reform/ Page 10

11. HEALTHCARE REFORM
EFFECTIVE 2016
• Health insurance penalty tax increases to $695 per uninsured adult and up to
$2,085 per household, or 2.5% of income, whichever is greater
Health Care Reform/ Page 11

12. HEALTHCARE REFORM
2017 AND BEYOND
• 2017 - Health insurance exchanges begin to operate for ALL employers
• 2018 - 40% excise tax on “Cadillac” health plans
• Annual premiums exceeding $10,200 per individual, or $27,500 per family
• 2020 - Federal research fee of $2 per enrolled employee per month is phased out
Health Care Reform/ Page 12

13. HEALTHCARE REFORM
ABOUT RAFFA FINANCIAL
Raffa Financial Services, Inc. was founded in
1999. The company has offices in Rockville,
MD and serves over 400 corporate clients, with
a staff of 24 employees.
Raffa Financial is a subsidiary of Raffa, PC.
Raffa PC is the largest private accounting and
consulting firm in Washington, DC, with over
220 professionals and staff. Raffa is noted for
the companies award winning corporate
philanthropy as illustrated in our 2010 Social
Responsibility Report.
Health Care Reform/ Page 13

14. HEALTHCARE REFORM
THANK YOU FOR YOUR TIME
JON ZEISLER
DIRECTOR, GROUP BENEFITS
DIRECT: (240) 403-2568
JON@RAFFAFINANCIAL.COM
Health Care Reform/ Page 14