2. OVERVIEW
๏ I. HC Reform- The Big Picture
๏ 2. What changes in 2014?
๏ 3. Who is affected?
๏ 4. Case studies from the field
3. HEALTH CARE REFORM- THE BIG
PICTURE
๏ HCR = PPACA=ACA=Obamacare
๏ Signed into law on 3/23/10
๏ First came โfree benefitsโ
๏ Now we get to pay for them ( or have somebody else subsidize
them)
๏ HCR Objective: To insure as much of the uninsured as possible
๏ Estimated 37 Million uninsured in the U.S.
4. HC REFORM: THE BIG PICTURE (
CONTโD)
๏ 2010-2012- Enhanced benefits introduced
๏ 2011/2018- Taxes ( Including .9% Medicare Tax, 3.8% Tax on
Investment Income, $8 Billion+Tax on Health Insurers, 2.3% Tax
on Medical Device firm sales, $2.5 Billion+ Tax on Pharmaceutical
firms; 40% Health Insurer Tax on โCadillac Health Plansโ)
๏ 2014- Individual Mandate, Employer โPlay or Payโ penalty for
groups with 50+ employees
5. WHAT CHANGES IN 2014?
๏ Mandate to purchase health insurance for individuals
๏ Employer โPlay or Payโ penalty applies for groups with 50+ full-
time equivalent employees who donโt provide:
๏ โAffordableโ coverage or
๏ โMinimum Essential Benefitsโ and
๏ One employee purchases subsidized coverage through the state-based
exchange
๏ If employers with less than 50 employees offer health insurance
that is either โUn-Affordableโ or does not offer โMinimum Essential
Benefits,โ employees may be eligible to purchase subsidized
health insurance through state-based Exchange.
6. WHAT CHANGES IN 2014?
๏ Expansion of Medicaid ( for those states that select this option)
๏ Subsidies for those individuals purchasing through the state
based exchanges between 138% of the Federal Poverty Level (
FPL) and 400% of the FPL.
๏ Tax Credits for some Small Businesses that qualify for employers
with 25 employees or less and average annual salary of $50,000
or less
7. 2014 MANDATE PENALTY FOR
INDIVIDUALS
๏ 2014- greater of $95 or 1% of income (max fee = 3X flat fee =
$285)
๏ 2015- greater of $325 or 2% of income (max fee = $975)
๏ 2016- greater of $695 or 2.5% of income (max fee= $2,085)
8. 2014 PLAY OR PAY PENALTY (FOR
EMPLOYERS WITH 50+ EQUIVALENT
EMPLOYEES)
๏ โNo Offerโ Penalty- $2,000 X the total # of employees minus the
first 30 employees
๏ Example: 100 employee group โ Annual Penalty = ( 100-30) X
$2,000= $140,000 ( not deductible to the corp.)
๏ โUnaffordable Coverageโ Penalty- The lesser of $3,000 per
subsidized full-time employee OR $2,000 X the total # of
employees minus the first 30 employees
๏ Note: An employer penalty is only triggered if at least one
employee purchases federally subsidized coverage in the
Exchange.
9. HOW IS AFFORDABILITY DEFINED?
๏ If an individual or employee of a company is offered coverage and
he/she has pays less than 9.5% of his/her income, thatโs deemed
affordable.
๏ If the cost to that individual or employee exceeds 9.5% of their
income, thatโs not deemed to be affordableโ and they are eligible
to purchase subsidized health insurance through the state Health
Care Exchange
๏ CA Exchange known as โCovered Californiaโ
10. HOW ARE MINIMUM ESSENTIAL
BENEFITS DEFINED?
๏ All insured plans must include:
๏ Ambulatory patient services
๏ Emergency services
๏ Hospitalization
๏ Maternity and newborn care
๏ Mental health and substance abuse services, including behavioral health
treatment
๏ Prescription drugs
๏ Rehabilitative and habilitative services and devices
๏ Laboratory services and devices
๏ Preventive and wellness services and chronic disease management
๏ Pediatric services, including oral and vision care
11. WHO IS AFFECTED?
๏ Almost all Americans will be affected in some way
๏ Some will benefit from the new law
๏ Some will be adversely affected by the new law
12. WHO IS LIKELY TO BENEFIT FROM HC
REFORM?
๏ The uninsured- who may be eligible for subsidies or get care at no
charge through Medicaid
๏ The poor- who will be eligible for subsidies or get care at no
charge through Medicaid
๏ Some employers will benefit from added consumer protections
๏ Those who have pre-existing conditions
๏ Small employers who are eligible for tax credits
13. WHO MAY BE ADVERSELY AFFECTED
BY HC REFORM?
๏ Employers with greater than 50+ employees- subject to โPlay or
Payโ
๏ Medicare recipients โ Approx. $500B in spending cuts
๏ Employer-Based Plans- Taxed for first time, may drop coverage
๏ Medicaid/CHIP Recipients-System could be overwhelmed
๏ Employees with rich plans ( i.e. many union plans)- Will be
subject to 40% Cadillac Tax (2018)
๏ Restaurant, Construction, Agriculture, some Manufacturing
industries
๏ Companies that donโt offer Employee Benefits to โAttract, Retain
and Motivateโ ( A.R.M.) their employees
14. TWO CASE STUDIES
๏ Client- 200 Employees ( Mgmt. Carve-Out only before 1/1/14)
๏ Subject to Play or Pay Penalty of about $340,000 in 2014 if they
donโt offer group health insurance
๏ Prospect- 200 Employees โ Never offered health insurance
before 1/1/14
๏ Objective: To comply with Obamacare and โstill survive as a companyโ
15. SUMMARY
๏ The 1/1/14 Open Enrollment Period for Covered California ( CA
Health Care Exchange) is from 10/1/13-3/31/14
๏ Individual rates and benefits have been released
๏ www.hbex.ca.gov
๏ www.coveredca.com
๏ You can follow Covered California on Linked In, Facebook and Twitter
๏ Small Group ( SHOP) rates to be released any day
๏ How to open up a potential prospect
๏ Are you ready for Obamacare? Or, are you looking for an
alternative opinion regarding your (Group or Individual) Health
Insurance?
๏ Let Ken Wilkinson or me know if we can be of any assistance to
you
16. THANKS FOR YOUR ATTENTION!
๏ Jim Wisdom, CFP
๏ James L. Wisdom Insurance Services
๏ 4607 Lakeview Canyon Road-Suite 482
๏ Westlake Village, CA 91361
๏ Work: (805)497-9264
๏ Cell: (818)469-6640
๏ CA License #0699524
๏ Follow my Health Care Reform Blog at
www.jimwisdom.wordpress.com
๏ Continue the conversation on Linked In, Twitter and Facebook
๏ Twitter = @Wisdom_InsSvcs
