1 / 24

The Affordable Care Act: What's in it for my small business?

January 21,2014. The Affordable Care Act: What's in it for my small business?. Mitchell Stein Policy Director Consumers for Affordable Health Care. Part 1. ACA Overview . ACA is the law of the land Universal access to health coverage – two pronged approach.

varana
Download Presentation

The Affordable Care Act: What's in it for my small business?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. January 21,2014 The Affordable Care Act: What's in it for my small business? Mitchell Stein Policy Director Consumers for Affordable Health Care

  2. Part 1 www.mainecahc.org

  3. ACA Overview • ACA is the law of the land • Universal access to health coverage – two pronged approach. • Expansions to public programs: now optional • Expansion of private programs: new options for individuals and small businesses • Insurance Reform at the Federal Level • Patients’ Bill of Rights • Holding Insurance Companies Accountable • Workforce Expansion and Quality Improvement Provisions www.mainecahc.org

  4. What’s Happening Now • While pieces of the law have been in place for several years, some of the major provisions have just gone into effect including: • Minimum Credible Coverage Requirement: Mandate for Individuals to Have Health Coverage • Marketplace Coverage and Subsidies • Plan reforms including Essential Health Benefits (both Exchange and non-Exchange plans) • Risk Adjustment Programs • And one piece that is still up in the air for us here in Maine, expanded Medicaid eligibility, or to put it another way, the public program prong of the two pronged approach www.mainecahc.org

  5. Plan Reforms The plan reforms that provide new protections are essentially a floor that defines what must be included for a plan to be considered health insurance – these apply to insured plans for individuals and small groups, sold on or off the Marketplace • No cancellations due to illness • No lifetime limits • No pre-existing condition exclusions • No-cost preventive services • Out-of-pocket maximum of $6,350 per individual ($12,700 per family) www.mainecahc.org

  6. Marketplaces (Exchanges) An Exchange is a Marketplace that is an easier way to shop for health insurance (now referred to as the Marketplace): www.healthcare.gov Two Marketplaces: Individual and the Small Business Health Options Program (SHOP) The Marketplace provides a way to compare and review choices in a consumer-friendly “apples to apples” format Coverage began as early as January 1, 2014 Enrollment is still open to get coverage for 2014 (until the initial open enrollment period ends March 31, 2014) Enrollment annually or at “qualifying event” Standardized plan levels www.mainecahc.org

  7. SHOP(Small Business Health Options Program) SHOP offers: A choice of qualified health plans from different private health insurers Meaningful comparison between plans Take advantage of enhanced level of Small Business Health Care Tax Credits Who’s eligible Employers with 50 or fewer Full-time Equivalent (FTE) employees Starting in 2016, employers with up to 100 FTEs will be eligible Once an employer enrolls, it can grow and still remain in SHOP www.mainecahc.org

  8. SHOP • SHOP is live and options can be viewed • For 2014 “Direct Enrollment” using broker or insurer • For 2015 (November 2014 availability) • Enroll through broker, insurer or directly on the SHOP • Option to offer employees a choice among qualified health plans across multiple health insurance companies www.mainecahc.org

  9. What Insurers Are Participating? • Maine Community Health Options • This is Maine’s new Insurance COOP (community owned and operated plan) • Received loan from Federal government to facilitate start-up • Will offer products on and off the marketplace • Fully licensed by Maine Bureau of Insurance • Anthem • State’s largest insurer will offer products on and off the marketplace • Multi-state plan • An additional plan will be offered by the Blue Cross/Blue Shield (BC/BS) Association, however it will be virtually identical to the Anthem plan (the BC/BS affiliate in Maine) • Other insurers will offer individual and small group plans off the marketplace • Individual: Harvard Pilgrim , Mega • Small Group: Aetna, United, Harvard Pilgrim www.mainecahc.org

  10. Part 2 www.mainecahc.org

  11. Employer Specifics • Notice of Marketplace Options (samples available on DoLwebsite: http://www.dol.gov/ebsa/healthreform/) • Medical Loss Ratio (MLR) Rebates • First ones mailed in July 2012, distribution depends on who pays the premium (employer or employee) • Summary of Benefits and Coverage (SBC) • For insured plans should be created by insurer and given to the employer to distribute • Applies to all individual and group plans (no exception for grandfathered plans) www.mainecahc.org

  12. Employer SpecificsAdditional Items (cont.) • New hire waiting period cannot exceed 90 days (all plans, grandfathered or not) • W2 disclosure of benefit costs began January 2013 (for 2012 year) • If issued less than 250 W2s in January 2012, exempt in 2013 • Note this is NOT taxable income. For informational purposes only similar to the 401k box on current forms www.mainecahc.org

  13. Employer SpecificsAdditional Items (cont.) • Flexible Spending Account (FSA) limit of $2,500 including Health and Dependent Care FSAs. HRA and HSA not impacted by new limit (begins in 2013) but are impacted by new regulations • Medicare Tax Increase for income over $200,000 for individuals and $250,000 for joint filers • Patient Centered Outcomes Research Institute Fee (First annual fee payable by July 2013 ) • First year, $1 per covered life, second year $2 per covered life, thereafter the $2 is indexed for Medical Inflation www.mainecahc.org

  14. Employer SpecificsAdditional Items (cont.) • Simple Cafeteria Plans (2014 plan year) • Congress amended the Internal Revenue Code to allow eligible employers' cafeteria plans to qualify as simple cafeteria plans. Simple cafeteria plans are treated as meeting certain nondiscrimination requirements and benefits for cafeteria plans making the process simpler. www.mainecahc.org

  15. Health Insurance Marketplace: Subsidies Who can get an individual subsidy? • If NO access to employer coverage: • Household income between 100 and 400% FPL (under 100% FPL legally present non-citizens) • If YES access to employer coverage: Income between 100 and 400% FPL (under 100% FPL legally present non-citizens) AND • Employer plan coverage less than 60% of average expenses or • Employer plan for employee costs more than 9.5% of income • Sample 2013 FPLs: 100% Single - $11,490, Family of 4 - $23,550 400% Single - $45,960, Family of 4 - $94,200 www.mainecahc.org

  16. Source: http://www.cbpp.org/files/premium-credit-webinar.pdf www.mainecahc.org

  17. Other Financial Help Income Level Actuarial Value* increased to… 100-150% FPL 94% 150-200% FPL 87% 200-250% FPL 73% *Actuarial Value is percent of average individual’s medical costs covered by the plan • Cost-sharing subsidies (only if Silver plan purchased): • Out-of-pocket spending limits • For insured plans sold on or off the Exchange, maximum individual out-of-pocket is $6,350 (will adjust each year) • Note OOP Max does not include premium costs and does not apply to out-of-network charges www.mainecahc.org

  18. Affordability Issues: The Family Glitch If an INDIVIDUAL has access to affordable coverage at work (defined as costing less than 9.5% of household income for employee-only coverage), and the FAMILY is offered coverage from the employer (even if there is no employer contribution) then the FAMILY cannot access subsidies in the Marketplace However, if the cost of FAMILY coverage for the spouse and dependents of a covered employee exceeds 8% of the household income, they are exempt from the penalty www.mainecahc.org

  19. Affordability Issues: Employee Coverage Subsidies are not available for employees as long as the employer’s coverage is deemed affordable (less than 9.5% ofhousehold income) and credible (60% actuarial value). Unlike individual coverage in the Marketplace, where subsidies vary be income level, employee premiums do not vary by income. www.mainecahc.org

  20. Employer-sponsored Coverage: Common Issues/Questions • Sole Proprietors • They must use individual marketplace, not eligible for SHOP (even if they employ spouse)* • Partnerships are permitted to use the SHOP** *DOL regulation excludes, at 29 CFR § 2510-3.3(c)(1), a trade or business, whether incorporated or unincorporated, which is wholly owned by the individual or by the individual and his or her spouse **Although the ERISA regulations says those partnerships don't count as "employers," HIPAA made an express exception to allow them to buy small group coverage www.mainecahc.org

  21. Employer-sponsored Coverage: Common Issues/Questions (cont.) • Employer Contributions to Individual Coverage • There may be a way for employees to buy coverage outside the Marketplace using a 125 salary reduction agreement. Recent guidance seems to indicate that employers can supplement this to a certain extent under certain circumstances. (See your broker/tax professional for details.) • However, there is no way for the employer to structure the plan so that the employee can use pre-tax contributions (from either the employer or employee) to purchase plans on the Marketplace and be eligible for individual subsidies www.mainecahc.org

  22. To offer or partially offer or not to offer, that is the question Three options: Offer to Employee and Dependents Offer to Employees Only Do Not Offer www.mainecahc.org

  23. To offer or partially offer or not to offer, that is the question Variables to consider • Employer’s cost • The coverage offered is tax deductible to the employer • Potential need to increase salary to compensate for the reduction in total compensation (if eliminating existing coverage) • Employee’s cost • The cost of individual coverage is NOT tax deductible to the employee (as opposed to their contribution to employer coverage which is tax deductible) • Coverage might be more expensive than their employer coverage is now, especially if they are not eligible for subsidies • If an INDIVIDUAL has access to affordable coverage at work (defined as costing less than 9.5% of income for individual coverage), then the FAMILY cannot access subsidies in the Marketplace • What is the competition doing • Impact of decision in attracting and retaining employees www.mainecahc.org

  24. Businesses Specific Resources Government (business focused): http://business.usa.gov/healthcare Department of Labor FAQs: http://www.dol.gov/ebsa/faqs/ IRS: http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions MaineBiz resource site: http://www.mainebiz.biz/article/20130822/NEWS07/130829974/1088 www.mainecahc.org

More Related