AAHRA 2014 S pring W orkshop

1. AAHRA 2014 Spring Workshop Health Reform 2014 Where we are ! Paige Phillips, Executive Director Alabama Association of Health Underwriters Rick Lender –C2 Wealth Strategy

3. PPACA 2014 and beyondEmployers have a lot to think about • Keeping benefit package attractive enough to retain current and recruit new employees • Staying within budget while maintaining benefits • Review options to have most up to date benefit package • Municipalities have to think of their own employees as well as the businesses in their area

4. Key Reporting Dates: Update • 1099 Reporting • Repealed • W-2 Reporting • 2012 but Delayed if less than 250 employees • Employer Mandate • Delayed • Employee Mandate • Not delayed • Medicare Tax Increases • 2013 • Auto Enrollment • Delayed

5. Determine group size Employer mandate applies to group size 50 full time employees including full time equivalents Part time determined: Aggregate part time hours divide by 120 to determine full time equivalents Example: 20 part time X 20 hrs week 1600 hours divided by 120 = 13.3 full time equivalents MUST BE COUNTING EMPLOYEES NOW TO DETERMINE IF LARGE EMPLOYER FOR 2015

6. What’s Not Delayed • Cost Sharing Limitations • Individual & small group plans may not have deductibles in excess of certain limits • Self-funded & large group health plans may not have annual out-of-pocket maximums in excess of certain limits • Insurance Market Rules • 90 Day waiting period for new hires • No pre-existing condition exclusions or limitations for plan years beginning on or after 1-1-14 • Preventive care • Essential Health Benefits

7. Additional items not delayed • Individual Mandate • Medicaid expansion • Approved Clinical Trials • Marketplace Notices • Transitional Reinsurance Fee and PCORI fee

9. What Must an Employer Really Provide? • Single Coverage • Dependents • Minimum Essential Value • Affordable (W2 wages, Rate of Pay, Federal Poverty Level) • Information reporting on health benefits • Final guidelines on employer reporting just recently released

10. What Should Employers Do? • Some will think this approach works

11. What Should Employers Be Doing Now • Small Employers (<50)- research to find the best option for your employees • Large Employers (>50)- Get ready for 2015 employer mandate • Confirm Plan design meets other ACA 2014 requirements • Watch for additional information on reporting requirements • Consider possible impact of nondiscrimination requirements • 3 A’s- Accountant, Attorney and Advisor of Benefits

12. USE 2014 AS A TRANSITION/TEST YEAR • Test employee counting strategies • Manage work hours • Assess liabilities and system vulnerabilities without significant financial consequences

13. EMPLOYER REPORTING GUIDELINES • 6055 SMALL GROUPS UNDER 50 • 6056 LARGE GROUPS • MUST REPORT TIN’S FOR INSURED, SPOUSE AND ALL DEPENDENTS • Must make concerted effort for depended TIN information • EE’S MORE THAN 50 LESS THAN 100 HAVE UNTIL 1-1-16 • Large employers over 100 must be in compliance 1-1-15 • Report on IRS form 1095-c (employee) and 1094-c (employer transmittal) however forms have not been drafted as of 4-1-14 • Penalty is $100 per return – max $1.5 million

14. General Information for Employees • Employees are Generally NOT eligible for subsidy if their employer offers affordable coverage ( REGARDLESS OF SIZE OF EMPLOYER) • Dependents could possibly still qualify for subsidy • Exchange will rely on “best available data” such as • Access to W2- look at 2015 return for 2014 benefit • Household income attestation

15. Premium Subsidy • Available January 1, 2014 through the Marketplace to help individuals purchase health insurance coverage • If an individual receives a subsidy and is determined over-paid - “clawback” applies to re-pay subsidy • Individuals will need to re-determine every year to qualify for subsidy

16. Premium Subsidy depends on income and family size • People at or below the following income levels will qualify to save in 2014 • Up to $45,960 for individuals • Up to $62,040 for a family of 2 • Up to $78,120 for a family of 3 • Up to $94,200 for a family of 4 • Up to $110,280 for a family of 5 • Up to $126,360 for a family of 6 • Up to $142,440 for a family of 7 • Up to $158,520 for a family of 8

17. CMS update on Marketplace • 1st Open enrollment is now closed • Call Center Operates 24/7 ….150 languages • Initial open enrollment 10-1-13 thru 3-31-14 • Ongoing open enrollment 10-1 thru 12-7 • If employee leaves company – they have 30 days to enroll in the exchanges or obtain personal individual health insurance

18. Penalty Penalty Greater Of

19. Potential Scams Personal Information: Never give away personal information (Social Security numbers, any bank account info) to random callers. Government officials will almost always request information by mail, unless it's a call you've made yourself to a verifiable government source. Fake Websites: Some website advertise themselves as healthcare markets or exchanges, and will even advertise using the state seal. HealthCare.gov is the only perfectly reliable portal to find official state and federal exchanges. Unsolicited Calls: Marketplace assistants are instructed not to reach out if someone has not explicitly asked for a call. Some scammers advertise themselves as "navigators" who will guide you through the new program for a small fee. Those services are available for free at the Marketplace Call Center. Fake Numbers: Don't rely on Caller ID or displayed numbers for trusted information. It's relatively easy for scammers to fake (or "spoof") a Caller ID number so it appears they're calling from Washington, D.C., for example.

20. 4 of the Biggest Scams • Need New Medicare Card • Charging for advice • Medical Discount Plans • Government Imposters

21. Don’t be surprised!!!DOL AUDITS ON THE RISE Every year thousands of ERISA-governed plans are selected for audit by governmental agencies. • United States Department of Labor (DOL) • Internal Revenue Services (IRS) DOL has significantly increased audit enforcement and IRS announced it is stepping up examination and enforcement activities and plans to dramatically increase the number of plan returns audited in the current and next fiscal year. AUDITS……they are coming…

22. Health Benefits Self Compliance tools Health Benefits Self Compliance Tools WWW.DOL.GOV • ERISA, HIPAA, Affordable Care Act Provisions and Other Health Care-Related Provisions This self-compliance tool is useful for group health plans, plan sponsors, plan administrators, health insurance issuers, and other parties to determine whether a group health plan is in compliance. • http://www.dol.gov/ebsa/healthlawschecksheets.html

23. Penalties Penalties range from: • Plan administrator could be subject up to $110 per day. • Willful violations can carry up to 10 years in prison and $100,000 fine. • An excise tax of $100/day/individual to whom such failure relates. • A penalty of up to $1,000 per failure. • Failure to properly report the cost of employer-sponsored health coverage on W-2’s may result in $30 to $100 per W-2, up to a maximum of $1.5 million. • (BAA’s) civil penalties range from $100 to $50,000 per violation.

24. The best thing about not planning ahead is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression Sir John Harvey-Jones

25. Healthcare Reform Websites • www.healthcare.gov • www.dol.gov(Dept of Labor) • www.irs.gov (Internal Revenue Service) • www.nfib.com (Natl Federation of Indep. Bus) • www.aldoi.gov (AL Dept of Insurance) • www.sba.gov (Small Business Administration) • www.nahu.org ( National Association of Health Underwriters)