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Outreach on the Affordable Care Act to Farm Families in Wisconsin

Outreach on the Affordable Care Act to Farm Families in Wisconsin. Heidi Johnson Dane County University of Wisconsin-Extension Crops and Soils Agent. Outreach Specifically to Farmers: Why me???. ACA affects them in many ways A tailored presentation Thinking like a farmer

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Outreach on the Affordable Care Act to Farm Families in Wisconsin

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  1. Outreach on the Affordable Care Act to Farm Families in Wisconsin Heidi Johnson Dane County University of Wisconsin-Extension Crops and Soils Agent

  2. Outreach Specifically to Farmers:Why me??? • ACA affects them in many ways • A tailored presentation • Thinking like a farmer • Extension provides non-biased information • Trusted resource • Ag agents are already invited to farmer meetings

  3. Where to begin? • UW – Covering Kids and Families • You and health insurance: Making a Smart Choice for Farm Families – Barbara O’Neil and Roberta Riportella • UW- Center for Dairy Profitability • Information was refined through discussions with other Ag Agents and farmers

  4. Presenting the information • Initial webinar to other agents – 32 attended • Live presentation to farmers – 18 attended • Made revisions • Statewide webinar for farmers – 24 counties, 95 people (snowstorm) • Many other presentations to farm groups – around 220 people • 3 major ag papers wrote long features

  5. What did I add in for farmers? • More statistics • The challenge of calculating AGI • Section 105, HRAs, HSAs, FSAs • Farmers think in terms of taxes! • Scenarios for: • Farm families with young children • Farm families with adult children • Farm businesses • Helping farmers calculate FTEs • Advising them to how to advise their workers

  6. Farm families as insurance consumers • Farmers are more likely to have insurance than the average American (90% and 85%, respectively) • Except dairy farms, only 64%! • 57% of farmers rely on off-farm job for benefits • Others rely on individual policies (17% vs. 9% of all Americans) • Few group options previously • May use a high-deductible policy paired with a HSA • High deductible policies are often used to “protect the farm”

  7. Adjusted Gross Income is the basis for determining subsidy • AGI must be estimated for the coming year! • Difficult for famers with fluctuating income • If AGI is overestimated – reduced subsidy – subsidy will be credited at tax time • If underestimate AGI – more subsidy – will need to pay back at tax time • Can choose to just take subsidy at tax time

  8. Changes to Section 105 – HRA accounts • Employers were able to set aside money tax free for employees to use to purchase their own insurance policy • This was also taken as a business expense • Beginning in 2014, farms with more than 1 employee can no longer use pre-tax money to purchase individual plans • Special thanks to Apel and Associates (Tracy Nodolf) for this information

  9. Other tools: HRA,FSA and HSA • Health Reimbursement Account • Funded by Employer • Now can just be for Vision and Dental, not premiums! • Flexible spending account • Funded by employee • Limit of $2500, Employer may add $500 • To be used for medical expenses, not premiums • Health savings account • Can be used in conjunction with high deductible plan • Limit of $3300 for individual, $6550 for family

  10. Possible Farm Business Scenarios • Husband and wife (minor children) • Husband, wife and adult children under 26 • Multiple Families and non-family employees

  11. Husband, wife, minor children • Possibly in the past had Section 105 – wife as employee. Could still do this if she is the only employee. • Individual marketplace • Family plan • Could qualify for subsidy depending on income

  12. Example • Farming family with 2 minor children • Parents are 40 and 42 • AGI = $55,000 • Monroe, WI (prices may vary greatly by region) • Results • 234% of poverty level • Maximum to pay would be 7.47% of income • Subsidy = $5523 • Out of pocket premiums = $4111, $342/month

  13. Husband, wife, adult child (24 yrs old) • Children can be covered on family plans up to 26 • Do not need to be dependents or living with parents • Can be married • The child’s income must be included in AGI

  14. Example • Total AGI (with child) = $92,000 • Parents are 57 and 58, child is 24 • Results • 471% of poverty • NO subsidy • Premiums = $14,888, $1240/month

  15. Farm businesses with multiple families and non-family employees • Group plan through SHOP • Eligible for tax credit if you meet criteria • Group plan purchased outside of SHOP • Still taken as business expense • Do not provide group insurance

  16. Example • 6 people in group plan: 36, 42, 24, 42, 60 and 63 years old • Average salary $35,000 • Monroe, WI • Results: • about $2600/month • Tax credit of $1300/month

  17. Tax credit for larger business • 20 employees • Average salary of $30,000/year • Tax credit goes down to 16% of premiums paid • If premiums are $60,000/year, credit would be $ 9,600

  18. How do you calculate your number of Full Time Equivalents (FTE) Employees? • For every month • Number of employees that worked >130 hours • Then add up hours of part timers and divide by 120 • Add two previous numbers together • Do this for every month of the year and divide by twelve to get average • Must be 50 or more, not 49.8

  19. What if you have less than 50? • Small employers (less than 50 FTEs) are not mandated to offer health insurance to full-time employees • But small businesses are eligible for a tax credit to offset the cost of providing insurance • Criteria for credit • Less than 25 FTE employees, average salary of less than $50,000/year and contribute at least 50% of employees premuims

  20. Requirements for Small Business Credit • Maximum tax credit is 50% of the premiums paid • Only receive maximum credit for 10 employees @ $25,000, more employees and higher salary fades out credit! • SHOP (Small Business Health Option Program) Marketplace must be used • WEBSITE DELAYED – must use paper application with agent • https://www.healthcare.gov/marketplace/shop/#state=wisconsin

  21. Calculating FTEs for small businesses • Exclude the following people entirely from your calculation of hours worked • The owner(s)   • Family members or dependents living in their household • Ministers considered by the common law tests to be self-employed • Seasonal employees who work for you 120 or fewer days during the tax year • Count up the total hours of all other employees in a tax year and divide by 2080 • If the result is not a whole number, round down to the next lowest number

  22. The Reaction • Many good questions and interest • Private phone calls and conversations • Questions often revealed the amount of misinformation out there • Farmers in Wisconsin tend conservative • It is very difficult for people to get information about how health care choices will impact their taxes

  23. Evaluation • 105 returned evaluations • Increase in knowledge in how the ACA impacts: • Insurance consumers (from 1.8 to 3.6) • Businesses (from 1.5 to 3.6) • 90% indicated their questions were answered about their personal health insurance • 88% indicated their questions were answered about their health insurance for their business • Most said they would use the Smart Choices workbook • Most said they would use the website links provided

  24. The Future of ACA and Farmer Education • One more presentation for DATCP Farm Center Volunteers • We may have only seen the first wave of questions and issues • Next sign-up time – not good for farmer • Tax time • All of the issue made people walk away – they may reconsider

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