Central Intermediate Unit # 10. Patient Protection and Affordable Care Act Presented by Erick Johnston 11-13-13. Affordable Care Act . The patient Protection and Affordable Care Act (PPACA), also known as Affordable Care Act (ACA), or Obamacare was signed into law on March 23, 2010
Central Intermediate Unit # 10
Patient Protection and Affordable Care Act
Presented by Erick Johnston 11-13-13
Affordable Care Act
The patient Protection and Affordable Care Act (PPACA), also known as Affordable Care Act (ACA), or Obamacare was signed into law on March 23, 2010
Requires that all plans cover a comprehensive set of benefits.
Plans must treat everyone fairly with no discrimination against pre-existing conditions.
Allows children to stay on parents health plans until age 26.
Federal Marketplace Notice
Notice of Summary of Benefits and Coverage (SBC) Grid
Recordkeeping of thirty hour rule for eligibility requirements
Offer health care to all eligible employees
Offer “Affordable” Health Care to all eligible employees
The notice is required to be provided automatically, free of charge.
Open Enrollment - Period of time when your eligible employees and their eligible dependents have the opportunity to enroll or make changes to their existing coverage.
During Open Enrollment employees will have the ability to take the following actions:
- Originally Effective July 1, 2014
- Under the Central Intermediate Unit # 10 Insurance Consortium the effective date for offering coverage to 30 plus hour employees would be effective January 1, 2015
Purposes of Law a Full-Time Employee:
During Measurement Period:
- How many of those employees received benefits?
-Which employees do you offer coverage?
-Which employees did you not offer coverage & why?
-3 month OR
-6 month OR
-Up to ninety (90) days
-Same as Measurement Period, but at least six months
Employer Best Practices
Comprehension and avoidance of Doomsday Penalties
Comprehension and avoidance of Cadillac Tax
Health insurance indemnification clauses and inclusion of language that the CONTRACTING AGENCY is the employer of record for the Free Rider Penalty under the Affordable Care Act
Have employees sign a form during enrollment that they were offered coverage.
1. “Doomsday” Penalty:
-$2,000 fine per FTE (less a factor of 30 employees)
-If an employer does not offer coverage to ALL full-time employees.
-If one employee enrolls in qualified Health Plan and receives a premium tax credit or cost sharing reduction.
2. “Unaffordable” health care
-Offering coverage that is not good enough, inadequate, unaffordable, employee pays greater than 9.5% of W-2 Box 1 Income.
-Penalty is $3,000 per employee that was not offered “affordable” healthcare
-If the employee is eligible for Medicare or Medicaid or on spouse’s coverage or eligible for spouses or declines coverage they will not trigger the penalty.
3. Cadillac Tax
-Commencing in 2018 if an individual health-insurance policy costs more than $10,200, the employer has to pay a 40% excise tax for any amount above that $10,200 threshold. For family policies, the corresponding threshold is $27,500.
Example of Cadillac Tax
In 2018 the CIU # 10 offers to pays a premium of $15,000 for single coverage.
A Cadillac tax will be calculated on this plan in the following manner:
$15,000 - $10,200 (ACA threshold) = $4,800
$4,800 x 40% Excise Tax = $1,920
The $1,920 tax is a tax assessed on each contract that is paid by the employer over the threshold amount
Total cost of the $15,000 coverage increases to $16,920
Some have argued that LEAs will not be subject to this “tax”
Please seek the advice of your solicitor to determine the exposure that your district may have
-Kelly Services already implemented this practice.