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IEDA. PROFITING UNDER OBAMA: HOW SMART BUSINESS OWNERS WILL SUCCEED DURING THE SECOND TERM. 1 . Have Dinner With Your Accountant . THE PROMISE – Patient Protection and Affordable Care Act March 23, 2010 $1.1 Trillion cost $140 Billion reduction in the deficit

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Presentation Transcript
slide1

IEDA

PROFITING UNDER OBAMA:

HOW SMART

BUSINESS

OWNERS

WILL SUCCEED

DURING THE

SECOND TERM

slide4

THE PROMISE – Patient Protection and Affordable Care ActMarch 23, 2010

  • $1.1 Trillion cost
  • $140 Billion reduction in the deficit
  • Coverage for all: Cover 2/3 of the uninsured (the rest on Medicaid).
  • A new market for 30-34 million uninsured.
  • State exchanges provide consumer protection/risk pooling/lower costs
slide6

Seven Things You Need To Know

1. Understand The Timeline

2. Determine If Your Plan Qualifies

3. Figure Out The Mandate

4. Calculate Full vs. Part Time Employees

5. See If You’re Eligible For A Tax Credit

Get Ready For The State Exchanges

Your Next Actions…Now

slide7

2011

  • Higher Premiums
  • Tax Credit
  • Dependent Care
  • Pre-Existing Conditions
  • Cannot rescind
  • Preventative Care
  • Wellness Program Grants
  • Unreasonable Rate Hikes (over 10%)
  • HSA Contributions Limited
  • OTC drugs excluded from HSA Accounts
  • 20% Tax on Distributions from HSA (unqualified exp)
  • Automatic enrollment in health plans
slide8

2012

  • 1099 Reporting - REPEALED
  • W-2 Reporting
  • Summary of Benefits and Coverage. This summary will be required for all health plans at companies, and will be due on or after September 23, 2012, during the first open enrollment period.
slide9

Women\'s Preventative Health Care Amendment - Free contraceptives, breast-feeding supplies, screenings for sexually transmitted infections, counseling for domestic violence and routine check-ups for breast and pelvic exams, Pap tests and prenatal care.

2012…a few other interesting provisions

Abstinence Only Education - $50 million but states must match.

10% Tanning Tax.

Calorie Information In Restaurants

Parent And Coping Skills - $1.5 billion so that young mothers who need them can get visits once or twice a month from nurses.

Breast-feeding Friendly Workplace – Bathrooms don’t count

slide11

2013

  • Medicare Part D (prescription drug) deduction ends
  • Social Security Tax back to 6.2%
  • Individual Medicare taxes rise from 1.45% to 2.35% for ‘high income’ people
  • Additional 2.9% Tax on unearned income begins for ‘high income’ people
  • Capital gains tax increases from 15% to 20%
  • Dividends tax increases from 15% to 20%
  • Itemized deduction ceiling rises from 7.5% to 10%
  • Flexible spending accounts limited to $2,500 withdrawals
  • Notification to employees about Health Exchanges
slide12

2014…It Hits The Fan!

Waiting periods cannot exceed 90 days

Pre-existing conditions waived for everyone

New reporting requirements to the government – Employers must report on health coverage of each employee and family members covered: name, SSN, coverage detail.

Individual Mandate

Employer Mandate

slide13

Seven Things You Need To Know

1. Understand The Timeline

2. Determine If Your Plan Qualifies

3. Figure Out The Mandate

4. Calculate Full vs. Part Time Employees

5. See If You’re Eligible For A Tax Credit

Get Ready For The State Exchanges

Your Next Actions…Now

slide14

DO YOU HAVE 50 FTEs? NO?

No health insurance requirement

No penalties

Tax credit available

slide15

DO YOU HAVE 50 FTEs? YES?

Must pay >60% of employees premiums

OR

Employee’s premium payment cannot exceed 9.5% of their income

slide16

DO YOU HAVE 200 FTEs? YES?

Required to automatically enroll new FTE in a health plan with the lowest employee premium (unless they opt out)

AND

Must cover >72.5% of cheapest individual health plan or >65% for family plans

slide17

Seven Things You Need To Know

1. Understand The Timeline

2. Determine If Your Plan Qualifies

3. Figure Out The Mandate

4. Calculate Full vs. Part Time Employees

5. See If You’re Eligible For A Tax Credit

Get Ready For The State Exchanges

Your Next Actions…Now

slide18

THE MANDATE

  • Beginning 2014 everyone must have coverage, either purchased individually or provided by an employer
  • By 2019: Penalties for the individual is the higher of $695 or 2.5% of Adjusted Gross Income
  • By 2019: Penalties for companies are $2,000 per employee with the first 30 FTE exempt
  • If an employer has 75 FT employees and 30 get their insurance elsewhere you still have to provide insurance
  • No requirement to provide insurance for PT employees
slide19

Seven Things You Need To Know

1. Understand The Timeline

2. Determine If Your Plan Qualifies

3. Figure Out The Mandate

4. Calculate Full vs. Part Time Employees

5. See If You’re Eligible For A Tax Credit

Get Ready For The State Exchanges

Your Next Actions…Now

slide20

How many full time employees do you have?

Those are the ones who you will have to cover

How many full time “equivalent” employees (FTE) do you have.

Those are the ones who will figure into your >50 calculation.

FULL VS PART TIME EMPLOYEES

slide21

Seven Things You Need To Know

1. Understand The Timeline

2. Determine If Your Plan Qualifies

3. Figure Out The Mandate

4. Calculate Full vs. Part Time Employees

5. See If You’re Eligible For A Tax Credit

Get Ready For The State Exchanges

Your Next Actions…Now

slide22

THE TAX CREDIT

  • <25 FTE
  • <$50,000 average salary
  • 35% - 50% credit for health insurance
slide25

Seven Things You Need To Know

1. Understand The Timeline

2. Determine If Your Plan Qualifies

3. Figure Out The Mandate

4. Calculate Full vs. Part Time Employees

5. See If You’re Eligible For A Tax Credit

Get Ready For The State Exchanges

Your Next Actions…Now

slide27

SHOP EXHANGES....

Small Business Health Options Programs

State run by 2014

Small businesses: 100 FTE. Companies that grow can be grandfathered. Before 2016 States can limit to companies with less than 50 FTE

After 2017 state exchanges will expand to >100 FTE

Employers can buy through SHOP or from private agents.

slide28

AND....

Pools to purchase insurance

Private insurance plans

Multi State Health Plans (min 2 are required)

Consumer Operated and Oriented Plans (Co-Ops)

slide29

Seven Things You Need To Know

1. Understand The Timeline

2. Determine If Your Plan Qualifies

3. Figure Out The Mandate

4. Calculate Full vs. Part Time Employees

5. See If You’re Eligible For A Tax Credit

Get Ready For The State Exchanges

Your Next Actions…Now

slide30

WHAT’S YOUR BEST HEALTHCARE STRATEGY….

1 – Do Nothing

2 – End coverage, pay the penalty

3 – Take a hybrid approach

slide31

THE SEARS APPROACH

  • Discontinue health care
  • A flat payment to employees
  • Reflects tax effects
  • Employee free to buy wherever

THE WALMART APPROACH

  • Newly hired part-time employees at Wal-Mart will have to work a minimum of 30 hours a week,
  • Elimination of some high premium plans,
  • Creating six health care centers,
  • Access to a healthcare advisor.
slide32

THE BENEFITS

  • Drop in Premiums!! Rise in Coverage!!
  • Small businesses excluded and get a tax credit
  • Business opportunities from growth in healthcare/bigger market
  • Easier for workers to move from jobs
  • Easier to budget
  • Potential less admin for small companies
slide35

So What’s Your Best 2013 Tax Strategy?

Defer (or accelerate) Income

Tax Exempt Investments

Section 179

$5,250 tax free education benefits to employees

529 Plans

slide36

PROBLEMS THAT WON’T GO AWAY

  • Potential “sticker shock”…why buy?
  • More docs opting out of taking insured patients
  • Potential arguments over rescinding
  • The viability of the “34 million”
  • State participation – Exchanges and Medicaid
  • Higher Taxes
  • No decrease in healthcare costs?
  • More government
slide37

RESOURCES

Blue Cross Tax Calculator - http://www.bluekctaxcredit.com/taxcalculator.aspx

Department of Health and Human Services – www.hhs.gov

Healthcare Reform Site – www.healthcare.gov

Washington Post Wonkblog:

http://www.washingtonpost.com/blogs/wonkblog/

slide40

Apple, Google, Microsoft

Search

Devices

Elance, Guru, Craigslist

Apps - Custom

Square, Intuit, Sage, Microsoft, QuickBooks

Apps – Out of the box

Location

2. Have A Mobile Strategy

slide41

Have Dinner With Your Accountant

Have A Mobile Strategy