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Health Care Reform 2014 Full Presentation

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on 11 June 2013

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Transcript of Health Care Reform 2014 Full Presentation

Small vs. Large Groups 0 + - = 9 8 7 1 2 3 4 5 6 c Employer Mandate Pay fine or continue benefits?
Considerations:
84% of Hoosiers covered by their employer’s benefits plan without employer mandate
Employer receives tax advantage:
Benefits are tax deductible
Cost of benefits are excluded from employee taxes (e.g., FICA, FUTA)
Cost of benefits are not taxable to employee
Penalty is not tax deductible
Retention of Key Employees
Employer would likely have to increase wage to pay coverage in the Exchange
Gross up plus matching employer tax Questions? Healthcare Reform 2014 Grandfathering ACA
Health Care Reform 2014
Patient Protection and Affordable Care Act + Healthcare and Education & Reconciliation Act 2010
=Affordable Care Act Common to All Plans No lifetime $ limits
No annual $ amount limits
Coverage for dependents under age of 26
90 Day Waiting Period MAX
Disclosure requirements
MLR Rebate requirements for Fully Insured Preventative Care, Patient
Protections
and Clinical Trials Group health plans required to cover certain types of preventive care W/O cost sharing including:
Immunizations
Child preventive services
Women's preventive services
CANNOT deny participation in clinical trial for qualified individual
Grandfathered plans NOT subject to these requirements Disclosure
Requirements Must notify employees:
Right to purchase health insurance
Potential eligibility for a premium tax credit
Potential loss of the employer contribution
Technical guidance released Summary of Benefits
and Coverage Can now be distributed in paper or electronic form to all applicants prior to enrollment
When:
Open enrollment
Initial enrollment
Special Enrollees (birth, marriage, loss of other coverage)
Upon Request, within 7 business days
For any material change affecting info in SBC participants must be given notice 60 days in advance Presented by: Grandfathering What still applies?
No lifetime/annual limits, annual limits on essential benefits
Coverage for dependents under 26
Elimination of pre-existing conditions
90 day waiting period max


Not Required to comply with Code Section 105(h) Prohibits some healthcare plans from discriminating in favor of Highly Compensated Individuals and against Non Highly Compensated Individuals with respect to benefits or eligibility.
An Employer sponsoring a discriminatory plan must pay an excise tax of $100 per affected employee per day Code Section 105(h) Large=50+ full time employees or equivalent
4 ways to determine full time status:
Actual Hours Worked
Days Worked Equivalency
Weeks Worked Equivalency
Look Back Method
Variable Hour Employee
Seasonal Employees Small VS Large Group What applies to both? OOP Max
$6350-self only
$12700—family
Pre-Existing Condition Limits and Maximum $ limits
May not impose limit on “Essential Health Benefits” Essential Health Benefits
Include: Ambulatory services
Emergency services
Hospitalization
Maternity and Newborn care
Mental Heath
Substance abuse services (including treatment)
RX drugs
Rehabilitative and habilitative services
Lab services preventive & wellness services
Chronic disease mgmt.
Pediatric services INCLUDING ORAL & VISION CARE
Includes Orthodontist after 24 month waiting period Small Group Metal Tiers Tiers are based on the percentage of the cost covered by the plan. Must be at least 60% to be deemed “affordable”. Determining Small vs. Large Health Care Exchanges

Purpose: to provide a competitive marketplace for individuals and small employers to directly compare available private health insurance options on the basis of:
Price
Quality Legislative Overview ACA provides that each State has the opportunity to establish an Exchange(s) that:
Facilitates the purchase of insurance coverage by qualified individuals through qualified health plans (QHPs)
Assists qualified employers in the enrollment of their employees in QHPs
Meets other standards specified in the ACA Legislative Overview Section 1321(c)(1) directs the Secretary to establish and operate such Exchange within the States that either:
Do not elect to establish an Exchange
As determined by the Secretary on or before January 1, 2013, will not have an Exchange operable by January 1, 2013 Types of Exchanges Federal
State
SHOP
Private Exchange Rules 1. Must abide by strict modified community rating standards

2. Everyone enrolling in the same health plan pays the same premium regardless of health risk, so that the cost of covering care for expensive enrollees is spread across the community of people buying insurance

3. Experience rating would be prohibited Subsidy Calculation Two types of subsidies:

1. Premium (up to 400% of the FPL)
2. Cost Sharing aka Coverage (up to 250% of FPL) Currently, this would include a family of four up to $92,200 AGI; single person $44,680
Subsidy only available to those who purchase insurance through a State or Federal Exchange
Beginning 2013, employers will be required to notify employees of Exchanges Individual Mandate ACA requires all American citizens and legal residents to purchase qualified health insurance coverage
Exceptions provided for:
religious objectors
individuals not lawfully present
incarcerated individuals
taxpayers with income under 100 percent of poverty, and those who have a hardship waiver
members of Indian tribes
those who were not covered for a period of less than three months during the year
people with no income tax liability Calculating Individual Mandate Penalty for non compliance to either a flat dollar amount per person or a percentage of the individual’s income, whichever is higher.
In 2014 the percentage of income determining the fine amount will be 1%, then 2% in 2015, with the maximum fine of 2.5% of taxable (gross) household income capped at the average bronze-level insurance premium (60% actuarial) rate for the person’s family beginning in 2016.
The alternative is a fixed dollar amount that phases in beginning with
$95 per person in 2014
$325 per person in 2015
$695 per person in 2016 Health Care Exchanges Become operational by January 1, 2014 Small Group Community
Rating Rating Variation Limited to:
Geographic Area
Indiana no longer based on counties
Age
3:1 age rating limits, 64-year-old cannot be set more than 3X that of an 18-year-old
Tobacco Use
Tobacco user can be charged 1.5 times the premium for a non-user for identical coverage. 200+ employees that offer 1(+) health benefit plan required to automatically enroll new full time employees and offer opportunity to opt out of coverage
Must also provide written notice at time of hire
Additional guidance to come later in 2013 Automatic Enrollment May be available if:
<25 full time employees
<$50,000 salary per employee
Must contribute a uniform % of at least 50% of the premium cost of a single coverage for employees

Benefits:
The maximum credit 50% small business 35% nonprofits
Able to carry the credit back or forward to other tax years
Eligible businesses can claim a business expense deduction for the premiums exceeding the credit Small Business Tax Credits Tiers are based on the percentage of the cost covered by the plan. Must be at least 60% to be deemed “affordable”. Small Group Metal Tiers Pay or Play? Premium Variations for Wellness Programs Employers will be able to vary premiums by as much as 30% for employee participation in certain health promotion and disease prevention programs
Recent guidelines authorizes this to increase up to 50% for tobacco-related wellness rewards Transitional Fees •Designed to fund reinsurance payments to health insurance issues that cover high-risk individuals
•Used to stabilize insurance premiums in the individual market during 2014, 2015, and 2016
•Applies to grandfathered and non-grandfathered health plans
•Transitional Reinsurance fee for 2014 will be $63 (or $5.25 per month) per covered life
•Fee applies only to plans that provide major medical coverage PCORI Fees •Assessed on health insurers and plan sponsors of self-insured group health plans
•Used to promote research that evaluates and compares health outcomes
•Fees are due no later than July 31

Calculations
•For plan year ending after September 30, 2012: $1* average number of covered lives
•For plan year ending after September 30, 2013: $2* average number of covered lives

Paid on 720 form 3. Premium Tax Credits 1. Calculate your FPL 2. Determine available Subsidies 4. Cost Sharing subsidy Because Stacey qualifies for a cost-sharing subsidy at 175%FPL, the 87% Silver cost-sharing plans will be visible to her on the exchange for purchase in addition to her Premium Tax Credit. Compiled by:
Rachael Forster
Jessica Sung
Drew Malcolm
Full transcript