This document provides an overview of the Affordable Care Act and upcoming compliance deadlines. It discusses requirements for employers such as reporting health coverage costs on W-2 forms by 2013 and providing a summary of benefits and coverage to employees by 2012. It also outlines the individual mandate beginning in 2014, health insurance exchanges, available plan tiers, and penalties for employers and individuals who do not comply. Contact information is provided at the end for following up on ACA requirements.

1. Welcome to:
The Affordable Care Act
Please Dial in using: 800-925-9789
Access Code: 2831265

2. Affordable Care Act :
Are you prepared?
Jim Hill and Ken McGee

3. The Affordable Care Act is back on a fast track.
• Will I have to buy it
• Can I still get it though my
Employer
• I own a small business. Will I
have to buy health
insurance for my workers?

4. Health Reform Implementation Timeline

5. What is the ACA:
Promoting Health Coverage
Universal Coverage
Medicaid Individual Exchanges
Coverage Mandate (subsidies 133-400%
(up to 133% FPL) FPL)
Health
Insurance
Market Reforms
Employer-Sponsored
Coverage

6. 2012-2013 Compliance
Deadlines

7. W-2 Reporting
• Employers must report
aggregate cost of
group health plan
coverage on each
employee’s Form W-2
• Does not change the
tax rules for health
coverage – coverage
is still not taxable

8. Effective Date
• Then:
− Originally effective for the 2011 tax year (W-2 Forms provided
in Jan. 2012)
− IRS later made 2011 reporting optional for all employers
• Now:
− Mandatory for 2012 tax year (W-2 Forms provided in Jan.
2013)
− For small employers (those that file fewer than 250 W-2
Forms), reporting requirement is delayed until further
guidance issued
− Covered employers need to be compiling data

9. Summary of Benefits and Coverage
• Simple and concise explanation of benefits
− Applies to GF and non-GF plans
• Model template and guidance available
− Instructions
− Sample language
− Uniform glossary of terms
• Final guidance specifies compliance deadlines
− Original deadline was March 23, 2012

10. SBC Compliance Deadlines
• Issuers to health plans: Sept. 23, 2012
• Health plans:
− Open enrollment: 1st day of the 1st open enrollment period
that begins on or after Sept. 23, 2012 or
− Other enrollment: 1st day of the 1st plan year that begins on
or after Sept. 23, 2012
• Special rules specify when SBC must be provided

11. Providing the SBC to Enrollees
• Plans must provide SBC to enrollees:
− For each benefit package offered or which they are eligible
− Annually at renewal (or 30 days before new plan year if
automatic renewal)
− With enrollment application materials (if no written
enrollment materials, when the participant is first eligible to
enroll)
− Before the first day of coverage (if there have been changes
to the SBC)
− To special enrollees within SPD timeframe
− Upon request

12. SBC Standards
• Appearance
− Cannot be longer than 4 double-sided pages
− 12-point or larger font
− May be color or black and white
− Paper or electronic form
− Template available
• Language:
− Easily understood language
− “Culturally and linguistically appropriate manner” –
interpretive services and written translations upon request
− Translations will be available

13. 60-Day Notice Rule
• Material modifications not in connection with
renewal must be described in a summary of material
modifications (SMM) or an updated SBC
• Material modification:
− Enhancement of covered benefits or services
− Material reduction in covered benefits or services
− More stringent requirements for receipt of benefits
• Must be provided at least 60 days BEFORE
modification becomes effective

14. Health FSA Limits
• Current limits
− No limit on salary reductions
− Many employers impose limit
• Beginning in 2013, limit is
$2500/year
− Limit is indexed for CPI for later years
• Applies to plan years beginning on or after 1/1/13
− This is a change from initial effective date
• Does not apply to dependent care FSAs

15. New Notice Requirement
• Employers must notify new employees regarding
health care coverage
− At time of hiring
• Notice must include information about 2014
changes:
− Existence of health benefit exchange
− Potential eligibility for subsidy under exchange if employer’s
share of benefit cost is less than 60 percent
− Risk of losing employer contribution if employee buys
coverage through an exchange

16. 2014 Compliance Deadlines

17. Individual Mandate
• Individuals will be required to have health
coverage that meets minimum standards in 2014
• Individual mandate spreads costs among whole
population
• Mandate enforced through the tax system
• Penalty for not having insurance: greater of $695
(up to $2085 for family) or 2.5% of family income
• Exemptions for certain groups and if people
cannot find affordable health insurance

18. The big picture for individuals
Americans not covered under
a government plan will have three
options for health insurance in 2014:
1. Get coverage through their
employer if available
2. Buy an individual market
plan through either:
• The individual market exchange –
Purchaser may be eligible for subsidy
• The off-exchange market
3. Go uninsured (will pay penalty
unless they qualify for an
individual exemption)

19. Penalties for individuals
Outside
Outside exchange
exchange –
– Fully insured
Fully insured
Small Group and
Large Group
Individual
and self-insured
2017 and beyond:
Annual
adjustments
2016:
Greater of $695 or 2.5% of taxable
2015: income
Greater of $325 or 2% of taxable income
2014:
Greater of $95 or 1% of taxable income

20. Health plan requirements: Product tiers
Platinum 90% Gold
actuarial value 80%
actuarial value
• Plus catastrophic plan
offering for individuals
All will include younger than 30/
Essential Health
Benefits financial hardship
Silver Bronze
70% 60%
actuarial value actuarial value
Total Expected Payments by Health Plans for
Actuarial Value** EHBs
=

21. Health plan requirements
continued
Outside
Outside exchange
exchange –
– Fully insured
Inside Fully insured
Small Group and
exchange Large Group
Individual
and self-insured
Include essential health benefits
*
Provide 60% actuarial value minimum
Adhere to deductible and
out-of-pocket maximum limits
Comply with “metal levels” – benefit
tiers with specified actuarial values
(60% 70% 80% 90%)
Be certified by the exchange through
which the plan is offered (certification
requirements to be determined)
* The health care reform law does not require carriers to offer plans with at least
a 60% actuarial value, nor does it require employers to provide health
coverage. However, it imposes penalties on 50+ employers that do not provide
minimum coverage.

22. Health Insurance Exchanges
• States will receive funding to establish health
insurance exchanges
• Individuals and small employers can purchase
coverage through an exchange (Qualified Health
Plans)
− In 2017, states can allow employers of any size to purchase
coverage through exchange
• Individuals can be eligible for tax credits
− Limits on income and government program eligibility
− Employer plan is unaffordable or not of minimum value

23. Health Insurance Exchanges
• What will they look like
• How many options will we have
• Actual Value out of Pocket levels
− Platinum
− Gold
− Silver
− Bronze

24. Employer Responsibility
• Large employers subject to “Pay or Play” rule
• Applies to employers with 50 or more full-time
equivalent employees in prior calendar year
• Penalties apply if:
− Employer does not provide coverage to all FT employees
and any FT employee gets subsidized coverage through
exchange OR
− Employer does provide coverage and any FT employee still
gets subsidized coverage through exchange

25. Employer Penalty Amounts
• Employers that do not offer coverage to all full-time
employees:
− $2,000 per full-time employee
− Excludes first 30 employees
• Employers that offer coverage:
− $3,000 for each employee that receives subsidized coverage
through an exchange
− Capped at $2,000 per full-time employee (excluding first 30
employees)

26. More 2014 Changes
• No pre-existing condition exclusions or limitations
− Applies to everyone and all plans
• Wellness program changes
• Limits on out-of-pocket expenses and cost-sharing
• No waiting periods over 90 days

27. Contact information
Linkedin-www.linkedin.com/in/thejimhill/
Facebook- http://www.facebook.com/jimhillcma
Linkedin-www.linkedin.com/in/kmcgee
Facebook: http://www.facebook.com/KennethMcGeeII

28. Thank you!