Iowa Telecommunications Association

1. Iowa Telecommunications Association Health Reform Update [ www.kiesling.com ]

2. WELLNESS IN THE WORKPLACEHow can it save you? Lindsay Guenther, HR Generalist

3. Back to Health Class Question: Even when resting, what muscles work twice as hard as the leg muscles of a person sprinting? Answer: The human heart.

4. Back to Health Class Question: Approximately how many gallons of blood is pumped through your body by your heart each day? Answer: 2,000 gallons

5. Back to Health Class Question: During the average lifetime, how many times will the human heart beat? Answer: 2.5 billion times

6. ..And the cold reality Question: What percentage of deaths in the U.S. are from heart disease? Answer: 25% (1 in every 4 deaths)

7. The Cost of Poor Health • In 2010, the cost of cardiovascular disease in the U.S. was about $444 billion. • Heart conditions • Stroke • Peripheral artery disease • High blood pressure • $1 of every $6 spent on healthcare was spent on the above conditions

8. The Cost of Poor Health (to your business) • Increased number of sick days/employee absenteeism • Turnover • Presenteeism • Increased healthcare costs

9. The Rise of Costs 8% Single 9% Family Overall inflation was 2%.

10. The Rise of Costs Six causes of increased healthcare costs • Hospital Visits • Doctor Visits • New Medical Technologies • Lab Tests • Drugs • Health Plan Administrators

11. Back to Class Question: What is our controllable action in lowering the costs of healthcare? Answer: Education about being a smarter health consumer and wellness programs.

12. Who Even Participates? In a 2011 study conducted by Principal Financial Group, thousands of employees of companies who offered wellness programs said… 52% Wellness programs give them more energy and productivity. 41% Wellness programs encourages them to work harder and better. 40% Wellness programs would drive retention.

13. Creating a Wellness Program • Organizational Culture and Leadership • Develop a “Human Centered Culture” • Demonstrate leadership • Encourage mid-level management

14. Creating a Wellness Program • Program Design • Establish clear principles • Integrate relevant systems • Eliminate recognized occupational hazards • Be consistent • Promote employee participation

15. Creating a Wellness Program • Program Design (continued) • Tailor programs to the specific workplace • Consider incentives and rewards • Find and use the right tools • Adjust the program as needed • Make sure the program lasts • Ensure confidentiality

16. Creating a Wellness Program • Program Implementation and Resources • Be willing to start small and scale up • Provide adequate resources • Communicate strategically • Build accountability

17. Creating a Wellness Program • Program Evaluation • Measure and analyze • Learn from experience

18. One Last Question Question: Although we can’t fully stop the rise of healthcare costs in the U.S., who can help create awareness around better lifestyles and healthy choices related to their employees? Answer: You.

19. Sources • Iowa Public Television http://www.pbs.org • Cleveland Clinic http://my.clevelandclinic.org/ • Center for Disease Control and Prevention http://www.cdc.gov/niosh/TWH/essentials.html • Kaiser Family Foundation http://kff.org/ • WebMD http://www.webmd.com/healthy-aging/features/heart-disease-medical-costs • CNN Money http://money.cnn.com/ • Principal Financial Group http://www.principal.com/wellbeing/2011/wbwellness-4q2011-data.pdf • National Institute for Occupational Safety and Health http://www.cdc.gov/niosh/

20. Questions? Lindsay Guenther, HR Generalist Kiesling Associates LLP lguenther@kiesling.com (515)221-4647 West Des Moines, IA Thank you!

21. TAX CONSIDERATIONS

22. Upcoming Changes • Individual mandates • Employer play or pay – Employer mandates (2015) • Large employer auto enroll requirement • Insurance exchanges for individuals and small businesses • Guaranteed issue, renewability and rating variation requirements • Annual limits • Limit on waiting periods • Wellness incentives • Preexisting condition exclusions • Comprehensive health insurance coverage • Limits on cost sharing and deductibles

23. Major Changes Insurance Exchanges • Under the law, states will create insurance exchanges that will be operational by 2014 • Open to both eligible individuals and some employers • Before 2017, open to employers with 50 or fewer employees only • Starting 2017, each state will be allowed to open up the exchange to larger employers

24. Individuals • The Shared Responsibility Provision • Effective January 1, 2014 • Certain exemptions, some of which need to be certified • You are not required to file a tax return • Coverage is more than 8% of household income • Penalties apply if exceptions do not apply

25. Premium Tax Credit • Insurance is through the exchange • Are not eligible through employer plan • Are within certain income limits • If married you must file joint • Cannot be claimed as a dependent

26. Income Limits • Individuals – Up to $45,960 • Family of two – Up to $62,040 • Family of four – Up to $94,200

27. Credit Limitations

28. Credit Calculation

29. Penalty Calculation

30. Business Health Insurance Credit • Available 2014 if participating in exchange • Phase-outs • 10 to 25 full time equivalents • $25,000 to $50,000 in wages • 50% of employer’s non-elective contributions • Credit is netted against deduction

31. Health Insurance Credit • Exclusions • Self-employed • 2% shareholders in an S-Corp • 5% shareholders of C-Corp

32. Health Insurance Exchange Credit • Available in 2014 • Credit equal to 50% of costs purchased through state exchange • Available for only 2 consecutive years • Additional exchange information available in October 2013

33. Health Insurance Credit

34. Health Insurance Credit

35. Health Insurance Credit

36. Requirement to Provide Insurance • Deferred Until 2015

37. Employer Responsibilities Employers with more than 50 Ees to pay 2k per employee if no health insurance coverage is offered and 1 EE is receiving premium assistance • First 30 employees are excluded from calculation of penalty • Full time employees only are used in calculation

38. Minimum Essential Coverage • The employee’s share must not exceed 9.5% of household income • The employer’s share must be at least 60% of the actuarial value of the total plan

39. Full Time Equivalent (FTE) • Employed on average 30 hours in a week • Employed 130 hours in a month • Part time hours are divided by 120 per month • Seasonal workers excluded if 4 months or less

40. Counting Employees • Full time employees for each month + • FTE for each month = • Divide by 12

41. Monthly Calculation

42. Annual Calculation

43. Annual Calculation

44. Employer Costs

45. Wellness Program • Limited to 30% of employee coverage and 50% for smoking. • May increase premium or provide credit • Can be a • Participatory Wellness Program • Contingent Health Program

46. Participatory Wellness Program • Providing incentives for • Health club memberships • Smoking cessation classes • Preventive care

47. Contingent Health Program • Increasing employee rates for • Smoking • Body Mass Index • Blood Pressure • Cholesterol Levels

48. W-2 Reporting of Health Costs • If <250 W2 filed in prior year exemption for 2012 forms and 2013 until further guidance issued • Reporting done in box 12, code DD • Reporting is for information purposes only

49. W-2 Reporting of Health Costs • Exemptions • Long term care insurance • Worker compensation • Supplemental liability

50. Resources • Kaiser Family Foundation – www.kff.org • www.healthcare.gov • http://www.cms.gov/cciio/index.html • http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-Home