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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

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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 and businesses

ACA and Businesses


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 small businesses

Action Steps for Small Businesses


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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