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2014 the real start of hc reform


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2014 the real start of hc reform

  1. 1. 2014- THE REALSTART OF HEALTHCARE REFORMJim Wisdom, CFPJune 13, 2013
  2. 2. OVERVIEW I. HC Reform- The Big Picture 2. What changes in 2014? 3. Who is affected? 4. Case studies from the field
  3. 3. HEALTH CARE REFORM- THE BIGPICTURE HCR = PPACA=ACA=Obamacare Signed into law on 3/23/10 First came “free benefits” Now we get to pay for them ( or have somebody else subsidizethem) HCR Objective: To insure as much of the uninsured as possible Estimated 37 Million uninsured in the U.S.
  4. 4. HC REFORM: THE BIG PICTURE (CONT’D) 2010-2012- Enhanced benefits introduced 2011/2018- Taxes ( Including .9% Medicare Tax, 3.8% Tax onInvestment Income, $8 Billion+Tax on Health Insurers, 2.3% Taxon Medical Device firm sales, $2.5 Billion+ Tax on Pharmaceuticalfirms; 40% Health Insurer Tax on “Cadillac Health Plans”) 2014- Individual Mandate, Employer “Play or Pay” penalty forgroups with 50+ employees
  5. 5. WHAT CHANGES IN 2014? Mandate to purchase health insurance for individuals Employer “Play or Pay” penalty applies for groups with 50+ full-time equivalent employees who don’t provide: “Affordable” coverage or “Minimum Essential Benefits” and One employee purchases subsidized coverage through the state-basedexchange If employers with less than 50 employees offer health insurancethat is either “Un-Affordable” or does not offer “Minimum EssentialBenefits,” employees may be eligible to purchase subsidizedhealth insurance through state-based Exchange.
  6. 6. WHAT CHANGES IN 2014? Expansion of Medicaid ( for those states that select this option) Subsidies for those individuals purchasing through the statebased exchanges between 138% of the Federal Poverty Level (FPL) and 400% of the FPL. Tax Credits for some Small Businesses that qualify for employerswith 25 employees or less and average annual salary of $50,000or less
  7. 7. 2014 MANDATE PENALTY FORINDIVIDUALS 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. 8. 2014 PLAY OR PAY PENALTY (FOREMPLOYERS WITH 50+ EQUIVALENTEMPLOYEES) “No Offer” Penalty- $2,000 X the total # of employees minus thefirst 30 employees Example: 100 employee group – Annual Penalty = ( 100-30) X$2,000= $140,000 ( not deductible to the corp.) “Unaffordable Coverage” Penalty- The lesser of $3,000 persubsidized full-time employee OR $2,000 X the total # ofemployees minus the first 30 employees Note: An employer penalty is only triggered if at least oneemployee purchases federally subsidized coverage in theExchange.
  9. 9. HOW IS AFFORDABILITY DEFINED? If an individual or employee of a company is offered coverage andhe/she has pays less than 9.5% of his/her income, that’s deemedaffordable. If the cost to that individual or employee exceeds 9.5% of theirincome, that’s not deemed to be affordable– and they are eligibleto purchase subsidized health insurance through the state HealthCare Exchange CA Exchange known as “Covered California”
  10. 10. HOW ARE MINIMUM ESSENTIALBENEFITS DEFINED? All insured plans must include: Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance abuse services, including behavioral healthtreatment 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. 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. 12. WHO IS LIKELY TO BENEFIT FROM HCREFORM? The uninsured- who may be eligible for subsidies or get care at nocharge through Medicaid The poor- who will be eligible for subsidies or get care at nocharge 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. 13. WHO MAY BE ADVERSELY AFFECTEDBY HC REFORM? Employers with greater than 50+ employees- subject to “Play orPay” Medicare recipients – 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 besubject to 40% Cadillac Tax (2018) Restaurant, Construction, Agriculture, some Manufacturingindustries Companies that don’t offer Employee Benefits to “Attract, Retainand Motivate” ( A.R.M.) their employees
  14. 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 theydon’t offer group health insurance Prospect- 200 Employees – Never offered health insurancebefore 1/1/14 Objective: To comply with Obamacare and “still survive as a company”
  15. 15. SUMMARY The 1/1/14 Open Enrollment Period for Covered California ( CAHealth Care Exchange) is from 10/1/13-3/31/14 Individual rates and benefits have been released 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 analternative opinion regarding your (Group or Individual) HealthInsurance? Let Ken Wilkinson or me know if we can be of any assistance toyou
  16. 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 Continue the conversation on Linked In, Twitter and Facebook Twitter = @Wisdom_InsSvcs