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An Employer’s Guide to HEALTH CARE REFORM

An Employer’s Guide to HEALTH CARE REFORM. What you need to know Braiden Darley, RHU. Employers Across America Want to Know…. What are the effects on me as an employer? What are the effects on my e mployees? How much is this going to cost me ? What do I have to do?. On The H orizon.

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An Employer’s Guide to HEALTH CARE REFORM

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  1. An Employer’s Guide to HEALTH CARE REFORM What you need to know Braiden Darley, RHU

  2. Employers Across America Want to Know… • What are the effects on me as an employer? • What are the effects on my employees? • How much is this going to cost me? • What do I have to do?

  3. On The Horizon Guarantee issue with no pre-existing limitations Individual coverage mandate Insurance exchanges & subsidies Employer “Pay or Play” Required expanded benefits Taxes, fees and penalties New rating rules New employer obligations & reporting requirements

  4. Beginning January 1, 2014 • New plan designs and rating guidelines • All policies will be guarantee issue regardless of medical conditions • Pre-Existing condition limitations will no longer apply • Obtaining insurance through Exchanges will be available for individuals and small groups <49 • Large/Small Groups • Waiting Periods: Max 90 Days • Full –time employees working at least 30 hours/week • Break time and room for nursing mothers

  5. Individual Mandate Qualify for an exemption based on income, religion or status (native American, undocumented immigrant, or incarceration) Obtain coverage through government program/Exchange, employer or individual insurance Go uninsured and pay a penalty Every American will have three choices in 2014:

  6. Subsidies & Penalties for Individuals Individual Exchange subsidies are available if no other available coverage is affordable or meets minimum value requirement Penalties phase in beginning in 2014 as part of tax return: 2014: Greater of $95 (adult)/$47.50 (child) or 1% of taxable income 2015: Greater of $325 (adult)/$162.50 (child) or 2% of taxable income 2016: Greater of $695 (adult)/$347.50 (child) or 2.5% of taxable income 2017 and beyond: Annual adjustments

  7. Large Employer Responsibilities • Offering Minimum Essential Coverage to at least 95% of all full-time employees and their dependent children • Minimum Essential Coverage is defined as providing value of at least 60%of the total allowed costs of benefits expected to be incurred under the plan. • Coverage must be affordable. • Employee’s share of the premium costs (for employee only coverage) is no more than 9.5% of that employee’s annual household income. • SAFE HARBOR – Affordability in 2014 (longer?) can be measured by the wages the employer pays the employee for that year, as reported in Box 1 of Form W-2. If an employer offers multiple coverage options, the lowest-cost MEC option available to the employee will apply.

  8. Penalties for Large Employers Minimum Essential Coverage (MEC) Not Affordable Coverage Employer doesn’t provide MEC OR MEC is offered to less than 95% of the full-time employees and their dependent children Penalty =Total number of FTEs employed for the year (minus 30) x $2,000 as long as at least one full-time employee receives the premium tax credit MEC offered to at least 95% of full-time employees and their dependent children. BUT one or more full-time employees receives a premium tax credit. Penalty is $3,000 per employee receiving a subsidy in Exchange. (Monthly Calculation)

  9. Plan Design Requirements In/Out of Exchange • New Plan Designs sold/renewed • Limited to “Metallic” coverage levels • Essential Health Benefits • 10 required coverage categories-pediatric dental/vision • Out of Pocket Maximum (all) • $6,350 single/$12,700 family • Rx may have a separate out of pocket max for 2014 if separate contract

  10. Subsidies for Individuals For INDIVIDUAL exchange plans only • To be eligible, individuals must: • Have incomes between133% and 400% of federal poverty level (FPL) • Not have access to minimum essential coverage through their employer or have access to coverage, but it is not affordable • Premium credits – for any level plan • Cost-sharing subsidies – silver plan only • Income ranges for 133% to 400% FPL • Individual: • $14,856 to $44,680 • Family of four: • $30,656 to $92,200

  11. Keep In Mind… • Exchanges will not replace the private health insurance market. • They’re simply another channel for qualified individuals and groups to obtain coverage

  12. Taxes & Fees (FOR ALL)

  13. Importantreasons to offer benefits • Critical Piece of employee compensation • Attract & retain quality employees • Employee Loyalty • Employee attitude • Employee performance • Employee health & higher absenteeism

  14. THANK YOU.

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