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Navigating the Patient Protection and Affordable Care Act (PPACA)

Navigating the Patient Protection and Affordable Care Act (PPACA). Key Provisions Impacting Small Business. What is PPACA?. This presentation is focused on companies with less than 50 employees. Became law March 23, 2010; some provisions already in effect.

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Navigating the Patient Protection and Affordable Care Act (PPACA)

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  1. Navigating the Patient Protection and Affordable Care Act (PPACA) Key Provisions Impacting Small Business

  2. What is PPACA? • This presentation is focused on companies with less than 50 employees • Became law March 23, 2010; some provisions already in effect • Employer rules vary by company size: • Self Employed • 25 Employees or less • 25-49 Employees • 50 + Employees • 250 + Employees

  3. Key Benefit Mandates • Most carriers have/are modifying the plans they offer to conform to these requirements • Guaranteed Issue: waives pre-existing condition exclusions for persons younger than 19 ; on Jan 1, 2014, this benefit applies to ALL ages • Community Rating elements • Removal of annual and lifetime dollar limits • Coverage for dependents to age 26 • 100% coverage for certain preventive services • Additional participant claim and appeal rights • 90-day maximum wait for coverage

  4. Three New Terms • Health insurance exchanges – where “pools” of qualified insurance policies became available for purchase beginning on Oct 1, 2013 • Individual mandate – individuals must have health insurance that meets new federal requirements, or pay a penalty • Employer mandate – employers of 50 or more must provide insurance or pay a penalty. (Penalty delayed to Jan 1, 2015 due ostensibly to employer terminations and restructuring to29-hour jobs)

  5. Insurance Exchanges • Setup required by 2014, but 32 states have refused to fund, passing baton to the US gov’t • Insurance companies offer coverage “pools” through “portals of access” • Regulatory bodies – regulate carriers and policies • Subsidy administration – IRS • Enrollment portals – online “SHOP” • Information portals – internet-based • Congress mandated continuation of individual and group coverage outside the exchanges

  6. Individual Coverage • Required to have Minimum Essential Health Coverage (MEC) starting January 1, 2014 • Exchange will subsidize premiums for individuals earning less than $46,000 • Annual penalty per family member the greater of (max 3 per family): • 2014- $ 95 or 1% of individual’s taxable income • 2015- $ 325 or 2% • 2016- $ 695 or 2.5%, then indexed for inflation • Enforced as tax liability on federal income tax

  7. Main Impacts on Employers • Employees can elect the exchange, impacting its 75% participation rate, but if the employer offers a plan, no subsidy is available to the employee • But .. the exchange is operating the first year on “honor-system;” employee can claim no employer coverage – no way to verify • By 1/1/2014 – employer plan must conform to mandated benefits – plan renewal before end of 2013 will buy another year of noncompliance • Employer plans unchanged since Mar. 23, 2010 can be “grandfathered” indefinitely

  8. Employer Administrivia • Provide employees with current Benefits and Coverage (SBC) disclosure summary from insurer – at renewal or effective date after 9/23/13 • Notify employees of the existence of the exchange • Medical Loss Ratio (MLR) rebates started 2012; insurer must spend 85% of group premiums on claims • H&HS supposedly approves >10% rate increases • Employee FSA contributions reduced to $2500; OTC meds disallowed for HSAs

  9. Taxes and Fees • Employer credit: up to 35% of 2013 premiums • 3.8% tax on investment income in effect for some • 0.9% Medicare payroll tax of income over $200,000 • Four new fees added starting 2014 to insurance premiums: • HIIF – 2.3%+ to offset PPACA cost-generating provisions • REA - $5.25/mo/insured to cover high cost patients • PCORI – funds comparative treatment research • FFEUF – pays for access to federally-facilitated exchanges

  10. Where is PPACA taking us? • Insurance premiums will continue to rise. • Coverage choices and flexibility will diminish. • Fewer doctors will take Medicare; Independent Payment Advisory Board will ration services, condemning seniors to 2nd-class medical care. • Other Americans will wait longer for service, especially on exchanges, which docs will avoid. • Privacy will evaporate – in 2014, health records will go to a centralized federal database.

  11. Towards a Single-Payer System • 10 million uninsured individuals without employer coverage are being forced to enroll in health insurance • Applicants can receive a “liar’s subsidy” • Delay in business penalties accelerates the transition from employer-based insurance to the Single Payer System; it also transfers $60 billion in expense from business to taxpayers • Community organizers have infested public places to sign up live bodies for the exchanges • By 2015, so many workers will be trapped in the exchanges that there will be no going back to private plans

  12. Recommendations • If you want to keep control of a group of 5 or more employees, look into partial self-funding • Take charge of your health • Find an independent physician or hospital • Consider treatment outside the U.S. • Support efforts in Congress to defund PPACA; Democrats and unions are jumping ship

  13. For More Information www.familybusinessoffice.net • http://www.sba.gov/healthcare • http://www.dol.gov/ebsa/healthreform • http://healthcare.gov/ • http://www.theihcc.com Family Business Office Wayne Peterson … (800) 659-4570

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