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UGA MEACA Project SHOP Marketplace. www.uganavigators.org. Today’s Overview. Affordable Care Act (ACT) and Businesses Employers Employees Small Businesses Self-Employed <50 Employees SHOP Marketplace Large Businesses Action Steps for Employers. ACA and Businesses. ACA Recap.

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uga meaca project shop marketplace
Note: Transition relief means that employer responsibility payments will not be collected for 2014

UGA MEACA ProjectSHOP Marketplace

www.uganavigators.org

today s overview
Today’s Overview
  • Affordable Care Act (ACT) and Businesses
    • Employers
    • Employees
  • Small Businesses
    • Self-Employed
    • <50 Employees
    • SHOP Marketplace
  • Large Businesses
  • Action Steps for Employers
aca recap
ACA Recap
  • On March 23, 2010, President Obama signed the Affordable Care Act into law, putting in place comprehensive reforms to:
    • improve access to affordable health coverage for everyone; and,
    • protect consumers from abusive insurance company practices (abbreviated).
  • Implementation of the Affordable Care Act occurs in stages, with many of the reforms and requirements taking effect in 2013 and 2014. 
aca and businesses1
ACA and Businesses
  • The Affordable Care Act includes a variety of measures for businesses, specifically for small businesses, that help lower premium cost, growth and increase access to quality, affordable health insurance.
  • The ACA has an effect on small businesses:
    • as employers of workers, and
    • as employees of a small business.
employer key definitions
Employer Key Definitions
  • Employer: includes for-profit, non-profit and government employers.
    • Common law definition of “employee” and “employer” applies.
  • Full-Time Employee: is an employee who is employed on average at least 30 hours per week.
  • Full-Time-Equivalent (FTE) Employee: is a combination of employees, each of whom individually is not a full-time employee because they are not employed on average at least 30 hours per week, but who, in combination, are counted as the equivalent of a full-time employee.
    • For example, two employees, each of whom works 15 hours per week, are the equivalent of one full-time employee.
aca and employers
ACA and Employers
  • Under the Affordable Care Act, employers covered by the Fair Labor Standards Act (generally, those firms that have at least one employee and at least $500,000 in annual dollar volume of business), must:
    • provide notification to their employees about the new Health Insurance Marketplace;
    • inform employees that they may be eligible for a premium tax credit if they purchase coverage through the Marketplace; and,
    • advise employees that if they purchase a plan through the Marketplace, they may lose the employer contribution (if any) to any health benefits plan offered by the employer.
aca and employers1
ACA and Employers
  • Employers are required to provide employees with a standard “Summary of Benefits and Coverage” (SBC) form explaining what their plan covers and what it costs. 
  • The purpose of the SBC form is to help employees better understand and evaluate their health insurance options. 
  • Penalties may be imposed for non-compliance. 
aca and employers2
ACA and Employers
  • The Affordable Care Act creates new incentives to promote employer wellness programs and encourage employers to take more opportunities to support healthier workplaces.
  • Under final rules that take effect on January 1, 2014, the maximum reward to employers using a health-contingent wellness program will increase from 20 percent to 30 percent of the cost of health coverage.
aca and employees
ACA and Employees
  • Beginning January 1, 2014, individuals who are eligible for employer-provided health coverage will not have to wait more than 90 days to begin coverage.
  • The maximum amount an employee may elect to contribute to health care flexible spending arrangements (FSAs) for any year will be capped at $2500, subject to cost-of-living adjustments. 

Note: Transition relief means that employer responsibility payments will not be collected for 2014

small businesses 50 employees
Small Businesses (< 50 Employees)

Note: Transition relief means that employer responsibility payments will not be collected for 2014

self employed and sole proprietors
Self-Employed and Sole Proprietors
  • Self-employed people and sole proprietors are considered “individuals” and are subject to the ACA individual mandate.
  • Can shop for coverage for individual/family in the Marketplace or privately.
  • Compare cost of current individual policy (if any) to policies available in their state’s Marketplace.
    • May have cost savings vs. policies offered in private market
aca employer provisions
ACA Employer Provisions
  • Employers must offer adequate health insurance or Qualified Health Plans (QHPs).
  • Insurance is deemed adequate if it is a 60/40 plan.
    • That is, no more than 40% of the total health care costs in a year would be expected to be paid by the average person insured in this type of plan.
  • Many current employer-provided plans are 50/50 or even less.
aca employer provisions1
ACA Employer Provisions
  • Small employers (< 50 FTE) are not mandated to offer health insurance to full-time employees.
    • Workers may be mandated to purchase and may likely do so with tax credits in the Marketplaces.
  • If employers offer insurance, it must be offered equally to everyone.
  • SHOP (Small Business Health Option Program) Exchange is available for small employers.
  • If < 25 employees and provide health insurance, 50% tax credit in 2014 (35 % for nonprofit organizations).
small business tax credit
Small Business Tax Credit
  • The Small Business Health Care Tax Credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.
  • Small business tax credit requirements:
    • Coverage must be purchased through the SHOP Marketplace.
    • The employer must cover at least 50% of the cost for single (not family) coverage for each employee.
    • The employer must have fewer than 25 full-time equivalent employees.
    • Employees’average annual wages can be no more than $50,000.
shop marketplace
SHOP Marketplace
  • Beginning in 2014, small employers may offer insurance through the Small Business Health Option Program (SHOP) Marketplace.
    • The employer-choice SHOP Marketplace. Eligible employers can select one or more plans; their employees can choose coverage from these options.
    • The employee-choice SHOP Marketplace. Eligible employees can select from four options: bronze, silver, gold and platinum. Employees can select any plans offered at that level in their state. Delayed until 2015 in the Federally facilitated SHOP.
shop marketplace1
SHOP Marketplace
  • A small business owner has to attest that the business:
    • is located in a SHOP Marketplace’s service area (generally a state).
    • offers health coverage to all full-time employees (FTE), or those working an average of 30 or more hours per week.
    • has at least one eligible employee on their payroll.
    • has less than 50 FTE employees on their payroll in 2014.
      • In 2016, employers with up to 100 employees will be able to participate in SHOP.
    • Have at least 70% of his full-time employees enroll in the SHOP Marketplace plan (may vary by state).
insurance affordability for employees
Insurance Affordability for Employees
  • If self-only plan is deemed unaffordable, employees are eligible for tax credits through the Marketplace.
  • Insurance is deemed affordable if the annual premium for a self-only plan (not a family plan) costs less than 9.5% of a person’s annual household gross income.
large businesses 50 employees
Large Businesses (> 50 Employees)

Note: Transition relief means that employer responsibility payments will not be collected for 2014

aca pay or play rules
ACA “Pay or Play” Rules
  • Individual Shared Responsibility: “Everyone must have health insurance…..or pay a federal government penalty” (certain exceptions apply).
  • Employer Shared Responsibility: “Employers must offer their workers adequate and affordable insurance if they have 50 or more employees, including seasonal ones, working 30 hours a week for more than 120 days…..or pay a federal government penalty”.

Note: Transition relief means that employer responsibility payments will not be collected for 2014

determining employer shared responsibility
Determining Employer Shared Responsibility
  • An employer is subject to Employer Shared Responsibility if it averaged a combination of full-time employees (including seasonal employees) and full-time equivalents that equals at least 50.
    • Example: Company X has 40 full-time employees working 40 hours per week, along with 20 part-time employees working 15 hours per week. The 20 part-time employees are counted as 10 full-time equivalent employees. Company X has 50 full-time employees and is subject to the employer shared responsibility provisions.
  • To determine whether it is subject to Employer Shared Responsibility for a given calendar year, the employer looks to the size of its workforce in the prior calendar year.
employers with 50 employees 2 potential penalties delayed until january 2015
Employers with > 50 Employees: 2 Potential Penalties DELAYED UNTIL JANUARY 2015
  • Penalty for not providing health care coverage
    • $2,000 per year for each full time employee starting at employee #31
    • Example: 60 employees: 60 – 30 = 30 x $2,000 = $60,000 per year penalty for not providing health coverage
    • Penalty will increase with rising insurance premiums
  • Penalty for not providing affordable and adequate health care coverage
    • If any employee has to pay > 9.5% of income for employer’s coverage AND/OR
    • If coverage does not pay at least 60% of covered health care expenses
    • $3,000 per year for each full time employee receiving a tax credit up to maximum of $2,000 per year x number of full time employees starting at employee #31
    • Penalty will increase with rising insurance premiums
large employer options that make business sense
Large Employer Options That Make “Business Sense”
  • There is little reason to believe that, when the employer mandate fines kick in, that employers won’t do one of two things:
    • Either not offer insurance at all and pay the smaller fine OR
    • Make sure that the insurance they offer meets the criteria of being affordable and adequate.
aca employer facts
ACA Employer Facts
  • Department of Health and Human Services: “96% of all businesses will be exempt from the law”
  • Only 0.2% of U.S. businesses with 50+ employees do not provide health insurance to FT employees
    • Resources
      • http://buffalo.ynn.com/content/653580/how-the-affordable-care-act-could-impact-farmers/
      • http://www.forbes.com/sites/theyec/2013/04/22/is-the-affordable-care-act-really-bad-for-business/
action steps for employers
Action Steps for Employers
  • Compare current insurance (especially individual policies) with state Exchanges
  • Consult with a professional advisor if business is close to 50 FTE employees
    • Do the math: pay or play?
    • Develop a plan to optimize mandate requirements within the business model (e.g., more part-time, less full-time, limiting surges of workers to < 120 days)
  • Obtain a health insurance plan (if business decides to cover employees). Make sure it both:
    • meets the 60/40 rule
    • costs less than 9.5% of the least (lowest) paid employee’s annual (household) income
aca dates to remember
ACA Dates to Remember
  • Employer mandate enforcement delayed until 2015
  • All are still subject to ACA individual mandate in 2014
  • Six-month initial enrollment period for Exchanges: October 1, 2013-March 31, 2014
  • Subsequent years enrollment dates: October 15 to December 7.
    • Resources:
      • https://www.healthcare.gov/what-key-dates-do-i-need-to-know/
more resources
More Resources
  • Healthcare.gov Small Business: https://www.healthcare.gov/small-businesses/
  • ACA Employer Penalties: http://www.benefitscafe.com/newsletter/03-calculating-aca-tax-penalty.html and http://www.fas.org/sgp/crs/misc/R41159.pdf
kaiser family foundation video health reform hits main street
Kaiser Family Foundation Video: Health Reform Hits Main Street

http://healthreform.kff.org/the-animation.aspx

main contacts
Main Contacts
  • To Sign Up:
  • HealthCare.gov
  • For Assistance:
  • 706-542-6117
  • For Resources:
  • www.MEACAProject.org
thank you
Thank You!

www.MEACAProject.org

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