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Agenda

Agenda. Solution oriented and hopefully political free Individual Mandate Winners & Losers, Rules & Exchanges Rules for Employers with less than 50 lives Mandates, Taxes and Fees Rules for Employers with more than 50 lives Mandates, Taxes and Fees Solutions. Misinformation.

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Agenda

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  1. Agenda • Solution oriented and hopefully political free • Individual Mandate • Winners & Losers, Rules& Exchanges • Rules for Employers with less than 50 lives • Mandates, Taxes and Fees • Rules for Employers with more than 50 lives • Mandates, Taxes and Fees • Solutions

  2. Misinformation

  3. Misinformation

  4. Winners & Losers Winners Losers Richer Healthier Younger • Poorer • Sicker • Older

  5. Exchange – Plan Requirements • 2014 • EXCHANGES / MARKETPLACES • Must offer “essential health benefits package” • 10 essential health benefit categories • Limited deductibles ($2000 / $4000) • Fair health insurance premiums • • Age (3:1) • Geographic area • Tobacco use (1.5:1) • Coverage tier • 5 plan levels: • Platinum (90%), • Silver (70%) • Gold (80%), • Bronze (60%) • Catastrophic plan for those under age 30

  6. Individual Mandate • Beginning in 2014, the Affordable Care Act includes a mandate for most individuals to have health insurance or potentially pay a penalty for noncompliance. • Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance. • Individuals will be required to maintain minimum coverage levels for themselves and their dependents. • Tax credits will be available to help offset cost if household income is less than 400% of the Federal Poverty Limit. IN SHORT – HAVE COVERAGE THAT MEETS THE MANDATE OR PAY A TAX PENALTY.

  7. Penalty for Noncompliance 2014 - Penalty for not maintaining minimum essential coverage • Greater of (capped at the national average of annual cost for Bronze plan in the Exchange for # of individuals who would have purchased coverage): • A flat annual dollar amount or a percentage of annual family income as follows:

  8. Exchanges • Online marketplace for Individual coverage • Carriers compete for business • Employers must notify members of the existence of the marketplace, the adequacy of the current plan and potential loss of employer contribution by October 1, 2013 • Not all exchanges are government sponsored • Only the government exchange has TAX CREDITS

  9. Exchange Overview • Exchange must offer “essential health benefits package” • 4 plan levels: • Platinum (90%), • Gold (80%), • Silver (70%)* • Bronze (60%) • Exchange also sells catastrophic plan for individuals < age 30 *Premium tax credits are available only in the government sponsored Exchange and are based on the silver plan cost * Cost sharing reductions are only available with the silver plan in the Exchange • Percentages reflect the richness of the plan (platinum pays 90% of costs) • Network will also vary widely from bronze to platinum

  10. Subsidy Examples • 1 person; non-smoker; SILVER plan Source: Kaiser Family Foundation

  11. Subsidy Examples • Family of 4; non-smoker; silver plan Source: Kaiser Family Foundation

  12. Exchange Notification • Census with audit trial • Email participants with receipts • Hand delivery with signature • First class mail with returned addresses • Proof of additional contact • Going extra step of providing concierge so no exchange questions were answered • Amended Sec 125 • New hires have notice in the enrollment guide and sign for it or electronically enroll • May not be 100%, but it will be far more compliant than most

  13. Mandates pre-2014 • Summary of Benefits and Coverage • 60 day notice of plan changes • Statement of Grandfathered Status • Notice of Rescission • Notice of Patient Protections & Provider Selection* • Preventive Care Services for Women* • $2,500 Contribution Limit for Health FSA’s • Marketplace Notice *Non-grandfathered plans only

  14. Mandates Effective Plan Year 2014 • Coverage must be effective by the 91st day of eligibility • Variable Hour Safe Harbor (Measurement Period) • Guarantee Issue / Renewable for fully-insured plans* • Elimination of Pre-Existing Condition Exclusion • Coverage for Clinical Trials* • Limits on Cost Sharing* • Out of Pocket limit of $6,350 / $12,500 • Deductible, coinsurance and copay all accrue to limit • Premium is NOT part of Cost Sharing • Optional Wellness Incentives of 30% or 50% for tobacco cessation *Non-grandfathered plans only

  15. Mandates Effective Plan Year 2014 • No dollar limits on Essential Health Benefits • Large Employer does not have to offer • If offered, no limit can apply

  16. Mandates – No Date Set • Section 105(h) Non-Discrimination* • Rules currently define a highly compensated individual as someone in the top 25% of earnings • Fully Insured plans – Delayed • Grandfathered fully insured plans are exempt • Non-grandfathered fully insured plans – rules are pending • Applies today to Self-Funded Plans • No delay of the rules • Fully insured rules (when released) may affect self-funded plans too • Automatic Enrollment for FLSA Employers – Delayed • 200+ full-time employees • Rules are pending

  17. Current Taxes / Fees • Additional Medicare Tax – January 2013 • Employer collects 0.9% tax, does not match it • All employers • Patient Centered Outcomes Research Institute Fee (PCORI) – 2012/2013 • $1-2 per covered member fee, indexes annually • Paid with general assets only • 6 year fee • All plans

  18. The Tax Man Cometh (2014) • Transitional Reinsurance Fee – January 2014 • $63 per covered member fee in 2014 • Paid with general or plan assets • 3 year fee (2014 – 2016) • Fee estimated to decrease each year • All plans • Health Insurance Carrier Tax – January 2014 • Annual fee based on carrier’s market share • Fully insured plans only • Including dental & vision • No end date

  19. Large Group / Small Group • For PPACA 50 Full-Time Equivalents • Include part-time on a pro-rata basis • For coverage, the state uses Average Number of Full Time Employees • Average over a period of time • You CAN be large group for one and small group for the other. • Which set of rules do you follow?

  20. Small Group Considerations • Provide the 10 Essential Health Benefits • “Fair” Health Insurance Premiums • Age, tobacco, area, tier • 3:1 Ratio of lowest rate to highest rate • Meet certain Actuarial Values (metal plans) • HSA contributions do not count toward the AV • Cost Sharing Limits (premium does not count) • $2,000 / $4,000 deducible • $6,250 / $12,000 out of pocket

  21. Small Group Considerations • No penalty for not providing coverage • Employees can enter the exchange • Winners and losers • Older, sicker groups benefit. • Younger healthier groups do not. • Networks will be important

  22. Large Employer Considerations • As of 2015, Large employers must offer affordable coverage that meets minimum value requirements or incur a penalty. • Minimum value = 60% or greater • Affordable = at least 9.5% of lowest paid employee wages • $89.54 / mo. for employees making $7.25 / hr. • Working 30+ hours / week • Available at least once a year

  23. Large Group Considerations • Pay or Play – Applicable to All Large Employers • Full-time = 30 hours + per week • Penalty assessed if one or more full-time employees receives the premium tax credit • Penalty is an excise tax

  24. Pay or Play Employee Types

  25. Solutions • Manage Part Time Status • Part-time employees move to exchange coverage • Manage to less than 30 hours per week • Helps participation • Skinny – Minimum Essential Coverage (MEC) • El Fenix • $70 - $90 pepm • Provides the minimum required by law • Have a plan B

  26. Solutions • New plans • Network – HMO • Range from $99.99 at age 20 to $472.38 at age 64+ • Self-fund • Avoid mandates • Lower cost • Flexibility • Surcharge or exclude spouses

  27. Solutions • Have an Exchange Concierge • Invaluable for anyone not covered by employer

  28. Mandates pre-2014 • Summary of Benefits and Coverage • 60 day notice of plan changes • Statement of Grandfathered Status • Notice of Rescission • Notice of Patient Protections & Provider Selection* • Preventive Care Services for Women* • $2,500 Contribution Limit for Health FSA’s • Marketplace Notice *Non-grandfathered plans only

  29. Solutions • Get compliant by March 2014. • Cannot unscramble eggs • Do not take brokers word for it • Treat it like an accounting relationship • Documentation • Deliverables

  30. Mandates Effective Plan Year 2014 • Coverage must be effective by the 91st day of eligibility • Variable Hour Safe Harbor (Measurement Period) • Guarantee Issue / Renewable for fully-insured plans* • Elimination of Pre-Existing Condition Exclusion • Coverage for Clinical Trials* • Limits on Cost Sharing* • Out of Pocket limit of $6,350 / $12,500 • Deductible, coinsurance and copay all accrue to limit • Premium is NOT part of Cost Sharing • Optional Wellness Incentives of 30% or 50% for tobacco cessation *Non-grandfathered plans only

  31. Mandates Effective Plan Year 2014 • No dollar limits on Essential Health Benefits • Large Employer does not have to offer • If offered, no limit can apply

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