Moving Past the Headache: An Update on Healthcare Reform

1. Moving Past the Headache: An Update on Healthcare Reform Stephen Northrup, Principal, The Podesta Group

2. The Affordable Care Act (ACA) and Small Businesses: What you need to know about health care reform implementation Presenter: Steve Northrup Podesta Group snorthrup@podesta.com

3. “Grandfathered” Group Health Plans • Is my company’s plan “grandfathered”? • Your plan is grandfathered if it was in place before March 23, 2010. • The plan remains grandfathered even if you enroll new employees. • The plan remains grandfathered if you change insurance carriers as long as there are no significant changes to coverage.

4. Changes to health insurance plans beginning in 2014 • Access • All plans must guarantee coverage regardless of health status. • Young adults may remain on their parents’ plan until age 26. • Costs • Premium rating based on health status will be prohibited for non-grandfathered plans . • Coverage • Non-grandfathered plans must cover a minimum set of benefits called “Essential Health Benefits.” • All plans will be prohibited from denying coverage based on a beneficiary’s pre-existing condition(s). • Value • Medical Loss Ratio - All plans must spend at least 80% of their income on medical care and quality improvement. If they fail to meet this threshold, small businesses and individuals will receive a rebate from the insurer. • Comparison • Plans will be labeled as bronze , silver, gold and platinum “tiers” demonstrating the actuarial value of the plan.

5. Insurance exchanges and small businesses • Beginning in 2014, small businesses will be able to purchase insurance through the Small Business Health Options Program (SHOP Exchange). • Until 2016, states can define “small businesses” as either 1 -50 employees or 1 – 100 Full-Time Equivalent Employees (FTE) to determed which businesses will be allowed to purchase insurance through the SHOP Exchange. • After 2016, all businesses with 100 or fewer FTE employees will be eligible to purchase insurance through the SHOP Exchange.

6. Penalties for not providing insurance coverage • Businesses with 50 or fewer FTE employees are exempt penalties. • Beginning in 2014, businesses with 51 or more FTE employees will be fined $2,000 per employee (excluding first 30 employees) if they do not provide coverage. • What kind of coverage counts? • Coverage must cover 60% of the actuarial value of the cost of the benefits. • Affordability Standard: An employee’s premium cannot exceed 9.5% of his/her household income. • If coverage does not meet the Affordability Standard, employees may receive a tax credit to purchase individual coverage through the Exchange • If so, employer will pay $3,000 per employee receiving tax credit or $2,000 per employee in the company (whichever is less).

7. Federal Assistance to Provide Coverage to Your Employees • Businesses with fewer that 25 FTE employees may be eligible for tax credits in order to provide health insurance to employees. • Businesses’ annual average wages must be below $50,000 and must pay half the cost of their employee’s premium. • Phase 1: (2010 – 2013) Employers receive a tax credit up to 35% of the employer’s contribution toward premiums. • Phase 2: (2014 and beyond) Employers receive a tax credit up to 50% of the employer’s contribution toward premiums if insurance is purchased through the SHOP Exchange.

8. Small Businesses and Wellness Programs • The ACA offers grants to businesses to implement wellness programs. • Businesses with fewer than 100 employees who work 25 or more hours per week on average that did not have a workplace wellness program in effect at as of March 2010 are eligible.