On Thursday July 19th, 2012, the Taylor-Wilks Group held a free Health Care Symposium to provide resources and answer questions regarding the Affordable Care Act. This is some content from the event.

1. Health Care Reform
Symposium
Your Bottom Line: What Health
Care Reform Means for
Maryland Businesses

2. About The Taylor-Wilks Group
• Established in 2005, The Taylor-Wilks Group
(TWG) is a leading, non-profit consulting firm
specializing in the provision of superior technical
assistance, professional services and
educational trainings that help you develop your
plans and lead your organization.
• TWG provides:
– Training Solutions
– Consulting Services
– Training Products

3. About Small Business Majority
• Small business advocacy organization –
founded and run by small business owners
• National – offices in Washington, DC, California,
New York, Ohio, Colorado and Missouri
• Research and advocacy on issues of top
importance to small businesses (<100 employees)
and the self-employed
• Particularly focused on healthcare over the past
6 years – one of the top issues in all of our research

4. Small businesses struggling with
costs
Soaring cost of health insurance – especially for
small businesses – 54% of businesses <10
employees don’t offer (Kaiser study)
28% self-employed: not covered
Small firms pay 18% more than large businesses
Our national study: Small business health costs would
more than double by 2018 to $2.4 trillion without
healthcare reform

5. Small businesses struggling with
costs
Our most recent opinion survey: Small employers who don’t offer
coverage say lack of affordability is the biggest reason (70%)
Which one or two of the following best describes the reasons you do not provide health
benefits?

6. Small businesses struggling with
costs
Another opinion survey of ours found: 72% of
those who do offer say they are struggling to do so

7. Figure 16
Health Reform Implementation Timeline

8. Figure 16
Health Reform Implementation Timeline
Continued

9. The new federal law
• Builds on our existing healthcare system
• Aims to rein in healthcare costs; reduces deficit by
over $100B by 2020; by $1.3T by 2030 (Congressional
Budget Office)
• Upheld by the U.S. Supreme Court on June 28,
2012, after state attorneys general and a business
organization filed a lawsuit against it
• Implementation is primarily the responsibility of the
states – essential to have small business input
• Important immediate benefits – other key provisions
to be implemented over the next 4 years

10. Immediate consumer protections
• Bans health plans from dropping coverage
when someone gets sick, if either the employee
or their employer made an unintentional
mistake on their paperwork (Sept. 23, 2010)
• Insurers will no longer be able to deny
coverage for patients with pre-existing
conditions (2010 for kids, 2014 for adults)
• Ban on lifetime caps that set lifetime limits
on coverage (Sept. 23, 2010)
• First-dollar coverage
• Adult children under 26 can stay on their for preventive care for
parents’ plan (Sept. 23, 2010) all new plans (Sept.
23, 2010)

11. Key provisions small businesses
should know about
• Provides immediate tax credits for most small
businesses
• Provides immediate access to a Preexisting
Condition Insurance Plan for the self-employed
• Establishes a
competitive marketplace
for small businesses and
the self-employed

12. Small business tax credits
• Available to businesses with employees
• Takes effect immediately (tax year 2010)
• Which businesses are eligible?
 Fewer than 25 full-time employees
 Average annual wages <$50,000
 Employer pays at least 50% of the premium cost

13. Small business tax credits
Our report: 3.2 million small businesses are
eligible (70.1% of all businesses); 1.3 million
businesses eligible for the maximum credit

14. Small business tax credits
• More than 2 in 5 small business owners who qualify
for the credit are eligible for the maximum
• 19.3 million employees work for businesses that
can benefit from this credit
• Total value of the credit for tax year 2011: $15.4B
– An average of $800 in savings per employee

15. Small business tax credits
• Tax credits on a sliding scale:
o Up to 35% of premium expenses for 2010–13
o Up to 50% of premium expenses for any two
years beginning 2014
• Tax credits do not cover premium expenses of owners
or their families
• Tax credits can not be claimed by the self-employed
• Still as an amendment to your 2010 taxes, or can be
carried back to tax year 2010.

16. Nonprofits also eligible
• Tax credits on a sliding scale:
o Up to 25% of premium expenses for 2010–13
o Up to 35% of premium expenses for any two
years beginning 2014
• Tax Refund for tax-exempt employers
• Include amount on line 44f on the Form 990-T and
attach Form 8941
• Does not have to be publically reported

17. How to claim the small business tax
credit
• Small employers (businesses or tax-exempt) will
use new Form 8941, available on www.irs.gov
• Small businesses will include the amount of the
credit as part of the general business credit on their
income tax returns
• The credit can be reflected in
determining estimated tax
payments for a year
• The credit applies towards
income tax, not employment
tax

18. Preexisting Condition Insurance
Plan (formerly high-risk pools)
• Available to individuals -- incl. self-employed
• Takes effect immediately
• Eligibility: Individuals who have been uninsured for six
months and have been denied coverage for a
preexisting condition or have a letter from a physician
stating they have a preexisting condition.
• Plans = lower premiums due to federal funding ($5
billion over 5 years)
• Available until full implementation in 2014 (no gap in
coverage)

19. Workplace wellness
• Grants to study small employer wellness programs
• $9M granted in 2011
• Reduce the risk of chronic disease among employees and
their families through evidence-based workplace health
interventions and promising practices.
• Promote sustainable and replicable workplace health
activities.
• Promote peer-to-peer healthy business mentoring.
• Increased access to care - community health centers (2011)

20. Medical Loss Ratio: “80/20 rule”
• Requires insurers to spend at least 80% of small groups’ premium
expenses on medical claims and quality improvement.
• Limits administrative and profit costs to 20% of premiums collected.
• If carriers exceed this, they must make up for it by giving back rebates
for the difference.
• An estimated $1.1B will be given back in 2012 (Department of Health
and Human Services)
• Nationally:
• Average rebate per enrollee in a small group plan: $76
• Total rebates: $377M in the small group market, 28% of all small
employer plans

21. Rate Review
• Insurance companies are required to publicly disclose and
justify rate increases of 10% or more. (Sept. 1, 2011)
• Insurers’ justification explanations will be posted on
HealthCare.gov and each state’s rate review program will give
customers a chance to comment on the explanations.
• A state can approve or reject an unreasonable or excessive
rate increase, if it has its own rate review law.
• If a state doesn’t have a rate review program, or has a rate
review program that is ineffective, the federal government will
conduct rate reviews in that state.

22. State health insurance exchanges:
coming in 2014
• Large marketplace to shop for health coverage
o Purchasing pool to increase buying power and reduce
administrative costs
o Small businesses with fewer than 50-100 workers eligible
• Private insurance plans will compete
o Improved competition will increase employer choice
o Exchange can negotiate with insurers on behalf of small
businesses to ensure higher quality and lower costs
• RAND Study
o Exchanges will expand coverage to 85.9% of small business
employees, up from 60.4% today, an increase of 10.5 million
workers

23. State health insurance exchange
• One-stop shop web portal o Compare plans and get
detailed information
about price, quality and
Small Business Exchange service
INSURANCE PLANS o Plans organized by
category: bronze,
EXCHANGE silver, gold, platinum
Choice
Comparison o Calculator to compare
Billing
Tax Credits costs across plan
options
SMALL BUSINESSES o Streamlined billing
process

24. State insurance exchange
• Many small business workers and self-employed
entrepreneurs will receive affordability tax credits
towards their premiums
o Up to 400% of federal poverty level (approx. $90,000 for
a family of four)
• Ensure that more $$ go to medical care –
reduced administrative costs
• Other incentives for administrative efficiency and
modernization
• Expanded coverage and individual responsibility
requirement – reduce hidden tax

25. State insurance exchange
• States determine whether to keep the individual and
small group markets separate or merge them
• Insurance will still be sold outside exchange
• Members of Congress must use the exchange

26. What is the Maryland Health Exchange?
• As part of the ACA, all states must either create a health exchange
for their residents or enter the national exchange governed by the
federal government. The exchanges must be operational by January
1, 2014.
• Health exchange definition: a state-regulated and standardized
healthcare marketplace, from which individuals may purchase
health insurance.
• Individuals with incomes up to 400 percent of the federal poverty
level may use subsidies to purchase insurance on the exchange.
• Soon after the ACA’s passage, Maryland began work creating their
health exchange

27. Maryland Health Benefit Exchange Timeline
• Patient Protection and Affordable Care Act
– Health care reform including the provision that each state must
establish a health insurance exchange by 2014 (signed into law by
President Obama, March 23, 2010)
• Health Benefit Exchange Act of 2011
– April 12, 2011: Governor O’Malley signed the Maryland Health
Benefit Exchange Act to establish Maryland’s exchange as a public
corporate and independent unit of state government
– June 3, 2011: Exchange Board held its first meeting
– September 2011: Exchange appointed Executive Director
– Dec 2011-Feb 2012: Exchange Executive Team appointed
• Exchange Act of 2012:
– Maryland General Assembly recently passed (April 5, 2012)
legislation that outlines the implementation policies and procedures
for operating the exchange

28. Maryland Health Benefit Timeline Continued
Next Steps
•September 30, 2012: Deadline to select Essential Health Benefits
(EHB)
•January 1, 2013: Maryland Exchange must be certified for operation
by the federal government
•October 2013: Individuals and groups will begin enrolling in the
Exchange
•January 1, 2014: Effective date of health insurance coverage

29. Maryland Health Benefit Exchange: Navigators
The Exchange will provide assistance through Navigators statewide:
– Conduct public education and outreach as required by the
Affordable Care Act
– Distribute fair and impartial information
– Facilitate enrollment in health plans
– Provide referrals for grievances, complaints and questions
– Provide information in a culturally and linguistically appropriate
manner
– Maintain expertise in eligibility, enrollment and program
specifications

30. How will the ACA impact Baltimore?
• By 2017 (three years into implementation), TWG estimates that:
– Baltimore City will have roughly 65,000 newly insured residents as a
result of the Affordable Care Act.
– Of these 65,000, roughly 45,000 will be under 200 percent of the
poverty line.
– Of those under 200 percent of the poverty line, 22,000 will receive
Medicaid, and be under 133 percent of the poverty line.
– 20,000 residents with incomes over 200 percent of the poverty line will
receive health insurance by 2017.
30

31. Map of Anticipated New Medicaid Patients in
Baltimore
31

32. What does this all mean for your
bottom line?
Changes in average employer contribution
per person covered

33. Exchange – key issues
• Active vs. passive (can the exchange negotiate?)
• Transparent design/full-disclosure on plans, costs
• Regional exchanges
• Role of brokers

34. Exchange – key issues
• Expanding exchange to large firms in 2017
• Incorporation of wellness and prevention programs
• Administrative issues:
billing, payment, web, etc.
• Effective education and outreach

35. Shared & individual responsibility
• Businesses with fewer than 50 full-time workers – 96% of all
businesses – are exempt from any requirement to offer insurance.
To ensure risk is spread over a large enough pool of people so that premiums
don’t skyrocket, Americans will be exempt from fines in 2014 as long as they
purchase health insurance.

36. Resources
• National HHS website: www.healthcare.gov
• Our website: www.smallbusinessmajority.org
o “What’s in Healthcare
Reform for Small
Businesses”
o Detailed FAQ
o Tax credit calculator

37. Join our network
Contact
• Erica Dowell, Outreach Manager/Network
Coordinator
• Email: edowell@smallbusinessmajority.org
• Direct: (202) 535-3244 Ways to get involved:
Connect with us! • Receive a monthly newsletter
@SmlBizMajority • Share your story for media requests
• Letters to the editor/Op-eds
Small Business Majority • State events/Roundtables
• Fly-ins
• Webinars for business organizations

38. To Learn More About TWG,
please contact us at:
The Taylor-Wilks Group
Valerie Febres-Berkely
410-209-2412
valerie@ taylor-wilksgroup.com
www.taylor-wilksgroup.com

39. Thank You!