4/9/2014
Healthcare Reform What Now? Dave Petno Accelerated Benefits 330-294-1085 www.davepetno.com [email protected] @davepetno
March 23, 2010: President Obama Signs PPACA
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Where did the time go? 2010
2010 Extending Coverage to Age 26 Pre Existing Condition Plans Eliminate Pre-Ex for Children Identifying Affordable Coverage Reinsurance for Covering Early Retire Coverage for Preventive Services Prohibiting Recessions Expand Lifetime and Annual Limits Claims Appeal Process Non-Discrimination Rules (Delayed) Medicare Part D Rebates Medicaid Flexibility for States Small Business Tax Credits Indoor Tanning Tax
Where did the time go? 2011
2011 Class Act (Repealed) Medical Loss Ratios Define Qualified Medical Expense Cafeteria Plan Changes Medicare Part D Discounts Additional Preventive Benefits Increased Taxes on HSA Withdraws
Where did the time go? 2012
2012 Preventive Care for Women Uniform Summary of Benefit Coverage Reporting of Health Benefits on W2 MLR Rebates PCORI Taxes
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Where did the time go? 2013
2013 Administrative Simplification Limiting HSA Contributions Employee Notice of Exchange HIPAA Certification Eliminate Deduct of Medicare D Subsidy Increase Threshold for Medical Deductions Additional Tax on High Wage Workers Medical Device Tax PCORI Fees Healthcare.gov Opens Subsidies for under 400% Poverty
Where did the time go? 2014
2014 Individual Coverage Mandate Employer Coverage Mandate DELAYED SHOP Exchange DELAYED Free Choice Voucher REPEALED Guaranteed Issue and Renewability Premium Restrictions to 3:1 Non Discrimination Rules Annual Limits Removed 90 Da Waiting Period Coverage for Clinical Trials Comprehensive Benefits Package Limits on Cost Sharing Deductibles and OOP Max Wellness Rules Individual Healthcare Subsidies Small Business Tax Credit 2.0 Health Insurance Tax Transitional Reinsurance Fee 5.25
Where did the time go? 2015
2015 Employer Coverage Mandate Employer Penalty Transition Relief from Penalties Employer Reporting Requirements HIPAA Certification
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Where did the time go? 2018
2018 Cadillac Tax : 40% tax on all plans that are over $10,200 single and $27,500 Family
Recent Changes: • Individual Mandate Delays and Exceptions
• Healthcare.gov Lockout
• Employer Mandate Penalty Delay
• Annual Deductible Limit Revision
Individual Mandate Change:
New Exception: Hardship Exception to include Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.
You experienced another hardship in obtaining health insurance.
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What is the Individual Mandate?
• Requires most people to have “minimum essential coverage” health insurance
• Beginning in 2014, most individuals must have health insurance for themselves and their dependents that meets minimum standards of coverage, or pay an annual penalty when filing tax returns.
How much is the tax penalty?
• The annual tax penalty for not having minimum essential coverage depends on the age and number of dependents in your household and increases over the next three years. • The penalty will be the greater of a flat dollar amount per individual or a percentage of the individual’s taxable income. • There is an overall penalty cap for families that is equal to the national average premium of a bronze level plan.
Where to get coverage
• You may be able to obtain minimum essential coverage through: – Your employer-sponsored group health plan – Your parent’s, spouse’s or domestic partner’s plan – Health Insurance Marketplaces – COBRA and state-sponsored programs – Medicaid or other state programs
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How will the penalty be enforced?
• “Shared responsibility payment” to the IRS beginning with your 2014 tax return.
• The penalty will be pro-rated based on the number of months during the year that you're uninsured
• If you do not or cannot make a shared responsibility payment at the time you file your taxes, the IRS may withhold all or part of any tax refund you may be due.
Who is exempt?
• You may be eligible for an exemption if you:
– Are uninsured for fewer than three months of the year – Have very low income and coverage is considered unaffordable – Are not required to file a tax return because your income is too low – Would qualify under the new income limits for Medicaid, but your state has chosen not to expand Medicaid eligibility – Are a member of a federally recognized Indian tribe – Participate in a health care sharing ministry – Are a member of a recognized religious sect with religious objections to health insurance – Experience a hardship that prevents you from becoming insured
How do you qualify for a hardship exemption? People may be eligible for a hardship exemption if they have experienced difficult financial or domestic circumstances that prevent them from obtaining coverage, such as: – Homelessness – Death of a close family member – Bankruptcy – Substantial recent medical debt – Disasters that substantially damage property – Being deprived of food, shelter or other necessities if forced to buy health insurance
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Individual Mandate Change:
New Exception: Hardship Exception to include Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.
You experienced another hardship in obtaining health insurance.
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Healthcare.gov Lockout
Healthcare.gov Lockout
Employer Mandate Delays • Original Law: Pay or Play for all employers over 50 employees with a 1/1/2014 Effective date. • Revised on 7/2/2013 to delay penalties and reporting requirements until 1/1/2015 • Revised again on 2/10/2014: – Pay or Play Delayed for Companies less than 100 FTEs until 1/1/2016 – Over 100 compliance threshold lowed to 70% for 2015 and penalty credit increased to 80 people. Goes back to 95% in 2016 and credit back to 30.
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Employer Mandate Delays
• Revised again on 2/10/2014: – Pay or Play Delayed for Companies less than 100 FTEs until 1/1/2016
– Over 100 compliance threshold lowed to 70% for 2015 and penalty credit increased to 80 people. Goes back to 95% in 2016 and credit back to 30.
Minimizing Penalties • 49ers: Businesses working to get below 50 FTEs to avoid penalty status
• 29ers: If not 49ers, business working to get employee hours below 30 hours so as to reduce penalty exposure
• 99ers: NEW
FINES AND PENALTIES • Variable Hour Employees
Is my business subject to penalties? • FTEs Defined by PPACA: • total FT employees+ equivalent of PT employees where30 hours/ week = 1 FTE. • PT Monthly count for 6 month period. Max hours would be 120 per month per employee, then divide the total PT hours by 120 to determine PT FTEs • If total of FT employees and PT FTEs equal or greater than 50, then Penalty Subject • If less than 50, not Penalty Subject
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No-Offer Penalty • If an employerfails to offerat least 70% or 95% its full- time employees (and their dependents) the opportunity to enroll in “minimum essential coverage,” and • One or more full-time employees enrolls for coverage in an exchange and qualifies for a premium tax credit or cost-sharing reduction, then • Employer penalty = $2,000 for each of its full-time employees in the workforce – This penalty is non-deductible
FINES AND PENALTIES
Unaffordable Coverage • If employer offers its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage, and • One or more full-time employees enrolls for coverage in an exchange and qualifies for a premium tax credit or cost sharing reduction because – The employee’s share of the premium exceed 9.5% of income, or – The actuarial value of the coverage was less than 60%, then • Employer penalty = $3,000 for each full-time employee who receives a tax credit or cost-sharing reduction • If the employer has many employees in this category, the alternative penalty reverts to $2,000 per FT employee
FINES AND PENALTIES
Minimizing Penalties • Variable Hour Employees: Status allows employees to work variable hours without being benefit eligible or subject to penalty – Must be reasonably hired to work <30 Hrs – Measurement Period (Up to 12 months) – Admin Period – Stability Period (Same as measure) – Repeat
FINES AND PENALTIES
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Annual Deductible Limit Max
On April 1, 2014: President Obama signed Protecting Medicare Act of 20014
Eliminates
• ACAAnnual Deductible Limits that were applied to Small Group Market. These limits were previously $2000 single and $4000 Family • Under the new rule there is now no limit. • This does not modifyout of pocketmaximums set byACA
Healthcare CBO Projections
Recent Changes: • Individual Mandate Delays and Exceptions
• Healthcare.gov Lockout
• Employer Mandate Penalty Delay
• Annual Deductible Limit Revision
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Questions? Dave Petno Accelerated Benefits 330-294-1085 www.davepetno.com [email protected]
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