Healthcare Reform

1. Healthcare Reform Putting the Pieces Together for Employers and Employees

2. Healthcare and Small Business • Without reform small business will spend approximately $2.4 trillion on healthcare for their employees in the next decade • Reform could save small business an approximate $885 billion • 80% of those not offering benefits is due to high cost

3. What is a SHOP Marketplace • Small Business Health Option Program = SHOP • Designed especially for small business and small non-profits • A Marketplace is a competitive market place where insurers can offer their products ifthey meet specified criteria

4. Navigating the Marketplace • Navigators will assist all enrollees through the process in and outside the SHOP • There are two types of helpers, Navigators and Certified Application Councilors (CAC) • You can find them listed and EnrollMichigan.com

5. InMichigan • Michigan is divided into 10 regions • Each region will have a “lead Navigator” and many supporting entities • Information is available at Enroll Michigan www.enrollmichigan.com

6. What Plans will be Available in the Marketplace? • The “Marketplace will offer 4 levels of coverage: • Bronze- Covers 60% of healthcare cost • Silver- Covers 70% of healthcare cost • Gold – Covers 80% of healthcare cost • Platinum – Covers 90% of healthcare cost

7. Enrolling with or without Navigator Assistance

8. Enroll Michigan

9. Marketplace Support • Marketplaces are mandated to be user friendly and offer support other than internet • Language specific access • Live phone support for those unable to utilize internet or lack computer access • No wrong door for enrollment

10. Common Questions Do I have to change companies and policies No!** Can I still use an agent or broker? Yes!

11. What is a business? • By federal definition: • Must have employees • Must not be immediate family members

12. Question? • Do employers have to provide insurance coverage for their employees? • Answer: There is nomandatefor businesses under 50 full time equivalent employees (FTE’s) to provide coverage, but you may be able to qualify for tax credits if you do

13. Facts • 85.1 % of Michigan Small Business would qualify for a tax credit • 39.1% of those could qualify for the maximum tax credit • There are 266 small businesses for every large business in Michigan

14. Self Employed • Must conform to the individual mandate • Can use the individual Marketplace • Can use an agent or broker • Has a broad choice for coverage options • Do qualify for income-based tax credits

15. Self-Employed Tax Credits • To receive tax credits, policies must be purchased through the Marketplace • Policy premiums will be designed to keep cost between 2-9.5% of annual income • Cost based on reported income tax filings • Credits can be pre-paid

16. Small Business • Business under 50 FTE’s are not required to provide benefits • Will be able to access Navigators • Do not have to change coverage** • Medicaid – Medicare enrolled employees are not counted towards your FTE’s

17. Small Business Tax Credits • Available to businesses of 25 or less • Must pay at least 50% of premium cost (individual) • Credit is based on business income tax • IRS form 8941 to file for your credit

18. What are the Credits? • = or < 10 employees (FTE’s) • Pay at least 50% of the individual policy premium • Average wage of < $25,000 • Qualify for 35% from years 2010-2013 • Qualify for 50% from 2014 forward for any two years

19. Business Credits Continued • Businesses 11-25 employees • Pays at least 50% of premium cost (individual) • Qualifies for credits on a sliding scale • Available for tax years 2010-2013 • 2014 forward for any two years

20. Non-Profit tax credits 2010-2013

21. For-Profit tax credits 2010-2013 Non-profit Years 2014 Forward

22. For-Profit tax credits 2014 forward for any two years

23. Benefit Explanations • Under IRC section 105 and 106 • Employee provided health benefits are generally excluded from income of employees • If a plan discriminates in the favor of a highly compensated employee, that could be considered as a taxable income

24. ACA Employee Notifications • Employee notification must include: • Coverage options available in the new health insurance marketplaces • Must provide its employees with written notice of the existence of a Marketplace • Contact information for the Marketplace • The services provided by a Marketplace

25. Notifications Continued • That the employee may be eligible for a premium tax credit if the employee purchases coverage through a Marketplace • That the employee may lose any employer contribution to a health benefit plan, if offered by that employer

26. Where can I get these forms • Two forms are available from DOL • One for companies who provide benefits • One for those who do not offer benefits • brett@consumersforhealthcare.org

27. Impact of ACA Depends on Business Size • Large Employers (50+ workers) • Access to SHOP Exchange (employers with more than 100 employees, will be eligible after 2016) • Employer Assessment • Coverage requirements

28. Large Business • Under the PPACA a large business is 50 and larger FTE’s • Mandates will be in effect 1/01/15 • Assessments are calculated and enforced by the IRS • Must provide a level of coverage that meets value and cost

29. What Are the Requirements? • Required to provide minimum value coverage for full-time (more than 30 hrs./week) • The plan must pay 60% of “expected” health care costs • Must be “affordable” for full-time staff – no more than 9.5% of employee income (reported in box 1 of form W-2)

30. How do I know if my plan meets these thresholds? • You can use the value calculator • Navigators can help you • For conversation, bronze level coverage

31. How do I count employees? • Calculation – Total number of hours worked by PT employees, divided by 120 • Organization has 35 FTE, plus an additional 20 part-time who all work 24 hours/week (96 hrs/month) • 1920/120 = 16 part-time staff. 16 +35 = 51 • Equation: 20 employees working 24 per week = 96 hours per employee per month. 96 times 20 equals 1920 hours of part time labor per month. Divide 1920 by 120 (30 hours per week, 4 weeks per month) will equal your FTE’s. (16 in this case)

32. Important to Calculations • It is very important to understand that calculations are rounded down • 49.999 FTE’s equal 49

33. Calculations Continued • Assessment equals number of full-time employees, minus 30, times $2,000divided by 12 • Example: • 50 employees • -30 employees = 20 • 20 X $2000 = $40,000 • $40,000 divided by 12 = $3333.34 per month

34. Employer Assessment • Example • What happens if an Employer does not offer health insurance, and one or moreemployees purchases coverage on the Marketplace and receives a tax credit? An assessment may be levied

35. How will I know if I owe an Employer Shared Responsibility payment? • The IRS will contact employers on potential liability • Provide them with the opportunity to respond before any assessment is levied

36. Proposed Rules and Guidance Employee contributions • If my employee is obligated to pay his/her contribution other than by payroll deduction and is late, am I required to still provide benefits for that month? • Not for that month

37. Proposed Rules and Guidance • If my employee has “elective deferrals” must the 9.5% affordability standard be met after these are calculated? NO • Calculations are done prior to elective deferrals

38. Questions

39. MCH Contact Information consumersforhealthcare.org Enrollmichigan.com Brett@consumersforhealthcare.org 517-230-3717