The information contained in this presentation has been collected from multiple documents and presentations. It is not intended to contain any legal advice. Please consult with your legal advisors for specific information that may apply to you and your company. AN. EDITORIAL. MOMENT.
The information contained in this presentation has been collected from multiple documents and presentations. It is not intended to contain any legal advice. Please consult with your legal advisors for specific information that may apply to you and your company.
Who’s to Blame?
The President signed the health care legislation into law on March 23, 2010.
The regulations defining the law are being written by HHS, DOL and IRS.
IRS & OSHA have monitoring responsibility.
CMS has responsibility for most of the implementation, including that of the Marketplace.
You Can Keep Your Insurance
Exemption from rating restrictions based on age variation.
Ability to continue coverage based on class.
Exemption from implementing Essential Health Benefits (e.g. pediatric dental).
Increase Deductible up to 15%.
Increase Copays up to 15%.
Increase Coinsurance more than 15%.
Decrease employer contributions by more than 5%.
Most plans have lost “Grandfather” status.
Those who have retained status must provide a statement to participant that it believes it is a “Grandfathered” plan.
Do you have your documents?
Coverage for children must be available until the child reaches age 26.
Do you have proof of the notice to employees? (Penalty up to $100 per day).
The MLR is 85% for large group plans and 80% for individual and small group plans (50 and below).
Carriers will have to issue a premium rebate to individuals for plans that fail to meet the minimum MLR requirements.
51 or More Full-Time Employees
Play or Pay
Effective starting January 1, 2015.
Employer must count all full-time employees and part-time employees on a full-time equivalent basis in determining if they have 50 or more employees.
Does the employer have
at least 50 full-time employees?
NO PENALTY APPLIES
Does the employer offer coverage to all full-time employees?
Did at least one full-time employee receive a premium tax credit or cost-sharing subsidy through an Exchange?
$2,000 x number of full-time employees minus 30
Is the employee’s required premium contribution for single coverage for the employer’s lowest-cost plan 9.5% or less of the employee’s household income?
Do any employees purchase coverage in an exchange and receive a premium tax credit or cost-sharing subsidy?
Lesser of $3,000 x number of employees receiving premium tax credits, or $2,000 x number of employees minus 30
MINIMUM VALUE TEST
Does the employer-sponsored plan provide minimum value?
NO PENALTY APPLIES
Total number of full-time employees = 30.
Part-time employees = 40.
Total hours worked by each part-time employee in a calendar month = 20 hrs / week x 40 = 3,200 hrs.
3,200 / 120 = 27 Full-time-equivalent employees.
Total full-time and full-time-equivalent employees = 57.
Play or Pay penalties apply.
Employee hourly wage $9.50 per hour
$9.50 x 40 hours = $380.00
$380 x 9.5% = $36.10 per week
Employee cost of health insurance $156.43
Start tracking part-time hours now.
Start tracking full-time hours now.
Learn about the safe harbor for seasonal employees.
If employee is covered by spouse’s plan there is no penalty to employer unless 50+ and employer does not provide coverage or provides unaffordable coverage.
Employers are not required to cover spouses. Definition of a dependent does not include the spouse.
1 to 50 Full-Time Employees
Minimum value - actuarial value threshold of 60%.
Small group plans in the bronze level of coverage meet minimum value requirements.
Beginning in 2014, summaries of benefits and coverage must indicate whether the plan meets applicable minimum value requirements.
Censuses must provide every dependent’s date of birth and the quotes will be lined out with a rate for each belly button. So a quote (and the eventual billing) might look like this on a 3-person group:
Jane Smith (wife)$429.29
Danny Smith (12)$158.77
Jennifer Smith (14)$158.77
Joey Smith (22)$253.97
Susie Smith (24)$260.09
Anna Jones (wife)$555.23
Health Insurance Marketplace
Smaller provider networks.
Smaller hospital network.
No out of network benefits on some plans.
Gatekeeper plans (no open access).
PCORI Tax-$2.00 per covered individual-Self Admin HRA, per each employee and each dependent.
Reinsurance Tax-$63.00 per year per each employee and each dependent. Funds large claims in the individual market.
HIT Tax- $8B divided by premiums collected in prior year 2014. $15B 2015, $18B 2016- Paid by insurers to help fund health care reform.
All are pass through taxes.
Medicare Tax increase for high income earners an additional 0.9 to employees earning over $200,000 ($250,000 joint filers).
DOL ran a contest for the best software to inform employees about labor laws.
Award winner announced on November 4.
$14M effort to educate employees.
Many employers have said they will move employees to 1099 status.
The IRS is on to this and will be conducting audits.
An employee can contact IRS and ask about their status and you could receive an audit notice.
Engage an independent contractor for a year or more.
Be very careful with this!!
You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.
State Exchanges/Federal Exchange.
Modified Community Rating (Groups 50 or fewer).
Redefines Small Group at 1-100 in 2016.
Waiting Periods 90 Days Max.
Full Time Employee for health insurance purposes-30 hours per week.
There is no requirement to pay the health insurance for part time employees.
Employers who issue 250 or more W-2s are required to list the value of the health insurance on the W-2.
Employers will report employees and the hours worked each month. 2015.
Exempt employees can be calculated at 8 hours per day, 40 hours per week, or actual hours worked.
Information must also be provided to each employee.
Flexible Spending Accounts (FSA)-Over the counter drugs are not eligible. $2,500 cap.
Developed and provided by the insurance company.
Delivered during Open Enrollment.
At a Qualifying Event.
60 days prior to a plan change during the plan year.
When an employee qualifies for coverage during the plan year.
Employee Notice Requirement.
Employers must issue a notice to employees about the Health Insurance Marketplace (Exchanges) availability and premium assistance by October 1, 2014.
Distributed by October 15.
Distributed to all employees age 65 and older.
States the company health plan has drug coverage equal to or better than Medicare Part “D”.
Online verification to CMS within 60 days of renewal.
No stand alone, except for retirees.
Some will and force their employees to the Exchange.
In some cases, the penalties are lower than the cost of coverage, but what about the soft cost of competition?
Keeps current plan design in place until December 1, 2014.
Avoids age rated plans for all groups under 50.
Avoids community rates.
Avoids PPACA plan designs.
Employer liability limited to the monthly premiums.
Monthly claims reports.
If plan develops a surplus the employer can receive a refund.
If plan runs in a deficit, no deficit recovery.
Places the insurance buying decision in the hands of the employee.
Must still comply with affordability.
Wide range of options for the employee.
Must be equal to all.
You will be exposed to every concept you can imagine.
Some old concepts, some new.
Some will survive, and some will cause the employer bigger problems.
Caveat Emptor (let the buyer beware).
Select a trusted advisor.
CMS.gov-search “minimum value calculator”