Presentation for the TMI Class of 2015.

1. Health Care
in the
Workplace
DR. ALICE LOUISE KASSENS
JOHN S. SHANNON CHAIR OF ECONOMICS
ROANOKE COLLEGE
The Management Institute
April 2015

2. Learning Objectives
By the end of the session, participants will be able to:
▪ Discuss the major sections of the ACA
▪ Know the resources available for navigating the ACA
▪ Understand the potential economic impact of the legislation on
individuals
▪ Understand the potential economic impact of the legislation on
businesses
▪ Understand the potential economic impact of the legislation on the
economy

3. History of health
insurance and the
employer
When did employers begin offering as a
benefit?
Has the distribution of total compensation
changed in the last few decades?

4. History of health insurance and the employer
▪ Emergence of employer based
health insurance with WW II
WHY?
▪ Growth through 1980s
▪ Decline of 6.3 percentage points
over 1987-2004 period
▪ Plateau with minor drop in Great
Recession
What do you think were the drivers
behind these trends?

5. History of health insurance and the employer

6. History of health insurance and the employer
0
10
20
30
40
50
60
70
80
90
100
%
All workers Part-time workers Full-time workers
Percentage of workers with access to employer-provided health insurance, private industry, 1991–2012
GROUP CHAT:
Why do you think
coverage for part-time
workers is less than
that of full-time
workers?

7. History of health insurance and the employer
Group work:
Get into groups and make the following lists:
1. Benefits of employer-based health insurance
2. Consequences of employer-based health insurance
Group question:
Would it be ideal to remove the link between employment and
health insurance? Why or why not.

8. PPACA
What are the major pieces of the
legislation?
What resources are available?

9. PPACA Overview
▪ Individual mandate
▪ Employer mandate
▪ Affordable Care Organizations
▪ Medicaid expansion
▪ Community rating
▪ Essential minimum benefits
Group question: What do you think
are the overarching goals of these
sections of the bill?

10. PPACA Overview
▪ State exchanges
▪ SHOP
▪ Local navigators and other
personnel
▪ Accountants
▪ Employer HR Department
▪ Healthcare.gov
▪ Local information sessions

11. Individual
mandate
What are the rules?
What are the potential economic impacts
for individuals?

12. Individual mandate
▪ Beginning in 2014, all individuals must buy health insurance with
essential benefits (minimum essential coverage)
▪ Self-employed individuals can get health insurance through the
state exchanges just as any other individual
▪ If do not buy health insurance, face a penalty (unless have an
exemption)
▪ Penalty is the greater of:
▪ $95 or 1% of household income over the filing threshold in 2014
▪ $325 or 2% of household income over the filing threshold in 2015
▪ $695 or 2.5% of household income over the filing threshold in 2016

13. Individual mandate

14. Individual mandate – penalty example
▪ Suppose you are single without
children and earn $40,000 per
year.
▪ The filing threshold for 2015 for
single individual is $10,300
▪ The amount over the threshold is
$40,000 - $10,300 = $29,700
▪ 2% of this is ~$600
Pay $600 in penalty or at least
$3,511.92 per year in premiums (risk of
penalty is low since cannot be denied
coverage if get sick)
What
would
you do?
Sample plan (2015)
NOTE: Plan estimate for female, single, no dependents, 40 years old, non-smoker, 5’4”, 120 lbs.

15. 5 minute break

16. Employer Mandate
What are the rules?
What are the potential economic impacts
for businesses?

17. Employer mandate overview
▪ Beginning January 1, 2016 employers with 50-99 FTE employees
MUST offer health insurance that is:
▪ Affordable
▪ Offers minimum essential coverage
OR
▪ Pay a penalty
▪ If less than 50 FTE, not penalized if do not offer
▪ This is a delay in the employer mandate; employers with 100 or
more workers begin January 1, 2015
“Pay or play” mandate

18. Employer mandate
Please read the handout titled:
“The labor market effects of the ACA’s employer mandate”

19. Employer mandate
▪ Employers must provide at least 60% of premium costs of employees health
coverage
▪ Health coverage purchased for an employee cannot exceed 9.56% of their gross
family income for employee only coverage.
▪ Employers must insure their employees if they have over 50 full time workers or
they will face a penalty or "shared responsibility fee".
▪ The penalty for large businesses not covering their workers is $2000 per
employee and $3000 if they purchase health insurance through the exchange
with premium credits
▪ The first 30 workers are excluded from the penalty.
▪ High end insurance plans will be subject to a 40% excise tax.
▪ Employers with less than 25 full-time workers making less than $50,000 a year
may be eligible for cost assistance via premium tax credits.
Affordability
Penalties

20. Employer mandate
▪ Minimum essential benefits:
▪ ambulatory patient services;
▪ emergency services; hospitalization;
▪ maternity and newborn care;
▪ mental health and substance use disorder services, including
behavioral health treatment;
▪ prescription drugs;
▪ rehabilitative and habilitative services and devices;
▪ laboratory services;
▪ preventive and wellness services and chronic disease management;
▪ pediatric services, including oral and vision care

21. Employer mandate
2015
Although firm
size determined
by FTE, penalty
is only assessed
on full-time
workers (30+
hours per week)
2016
See handout for
more details

22. Employer mandate
Details on the employer mandate from the Chamber of Commerce

23. Employer mandate
Determination and application of employer penalty by type of employee
Retrieved from http://www.fas.org/sgp/crs/misc/R41159.pdf 11/13/2013
What types of
incentives might
arise?

24. Employer mandate (less than 50 FTE)
Choices for “small employers”:
1. Are not penalized if do not offer  point employees to individual
exchanges (www.healthcare.gov)
2. Employers can buy health insurance from Small Business Health
Options Program (SHOP) for 2015 (SHOP opens Nov. 2014)
▪ An online exchange (much like the exchange for individuals)
▪ Could quality for tax credits to offset costs (not permanent); can deduct
remainder from taxes
▪ Way of attracting new employees  increased total compensation?
3. Work with insurance company/broker to buy group coverage in
private market (nothing new)

25. Employer mandate – more on SHOP
▪ Open to employers with 50 or fewer FTE employees
▪ In 2016 this will increase to those with 100 or fewer FTE employees
▪ Self-employed can use individual exchange, but not SHOP
▪ If offer through SHOP, must offer to all FT employees (30 or more
hours per week)
▪ In many states, at least 70% of your eligible employees must
enroll in your SHOP plan
▪ Employees sign up using the SHOP webpage after you have
selected a plan
▪ Coverage will not take affect until approved by employer after
enrollment period is over

26. Employer mandate
Group questions:
1. What do you think are the primary concerns for employers with
respect to the employer mandate?
2. Have you observed any changes in your place of work?
3. Do you believe that your employer will be impacted by the
employer mandate?
4. How do you think your employer will adapt to the employer
mandate?

27. The economy
What are the potential economic impacts
of the legislation on the economy?

28. The economy
Labor market effects
Discuss labor
market issues
discussed handout

29. Current issues
What are the current issues being
debated?

30. Current issues
Definition of full time work:
30 vs. 40 hours per week
Save American Workers Act 2015
HR 30 passed in January 2015
American Job Protection Act 2015
S 305 assigned to committee January 29, 2015 (2% chance
of being enacted)
Group question:
7% of American workers work 30-34 hours per week while
44% work 40 hours per week.
What are the costs and consequences of redefining full time
work under the ACA?

31. Thank you
Feel free to contact me –
Dr. Alice Louise Kassens
kassens@roanoke.edu
(540) 375-2428 (office)
@RnningEconomist
The PowerPoint presentation will be
available on my blog:
www.therunningeconomist.blogspot.com