Transcript Pella Windows

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Health Care Reform Legislation:
“What just happened and how will it impact you.”
www.bearence.com
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President Obama Signed Two Bills into Law
• Patient Protection & Affordable Care Act (PPACA)
• –Signed into law on March 23, 2010
•
Health Care & Education Reconciliation Act (H.R. 4872)
– Signed into law on March 30, 2010
• 2,900 pages will be followed by thousands of pages of regulations,
possibly expanding the requirements
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PPACA: We now see the 1/8 above the surface
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Employer Health Plan Mandates
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Lifetime and annual benefit limitations eliminated
Coverage of adult children to age 26
Pre-existing condition exclusions prohibited
Community Rating for Insurance Companies (2014,
2016)
Employer Certification to the US Dept of Health
regarding meeting “minimum essential coverage.”
Increase in wellness incentives up to 30% in 2014, and
up to 50% in 2016
Guaranteed availability and renewability of insured group
health plans
Mandated Benefit Limitations
Employer play or pay provisions
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Employer “Play or Pay” Mandate
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Employers with >50 employees who do not offer coverage:
–If even one F/T employee gets coverage from health insurance exchange
–Free Rider penalty of $2,000 X the number of full-time employees
–Employers must assume that Free Rider penalty will rise as subsidies rise
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Employers with >50 employees who do offer coverage, but coverage is not
“affordable,”
–Assessment of $3,000 X the number of employees receiving subsidies
–“Affordable” defined as plan’s share of the cost is less than 60% of actuarial
value OR employee’s share of the premium is greater than 9.5% of income
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Tax Policy Changes
• Effective 2011
– Over-the-counter medicines purchased after December 31, 2010, will
not be eligible for reimbursement from an FSA/HSA/HRA
• Effective 2013
– For taxable year beginning after Dec 31, 2012, FSA contributions
capped at $2,500
– New Medicare tax of 3.8% on unearned income, e.g., rent, interest,
dividends, for persons with AGI of $200K individual/$250K joint filers
– New Medicare payroll tax increase of 0.09% for high income individuals
• Effective 2018
– 40% excise tax on high-value health plans
– Threshold $10,200/$27,500; Higher for early retirees and high-risk
occupations
– Exempts dental and vision coverages
– Includes value of health plan, FSA, HSA, HRA and supplemental
– Employers must calculate and report excess value and tax
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Employer Reporting & Notifications Cont.
• Effective 2014
–Health insurance coverage information to F/T employees and to
IRS
–Effective January 1, 2014, employer must report minimum
essential coverage certification, number and names of F/T
employees, waiting periods, lowest cost option, monthly premium,
employer’s share of total allowed costs, etc.
–Insurers and self-insured employers must also report names and
addresses of the insured, dates of coverage, whether it is a qualified
health plan through the exchange, and the amount of any tax credit
subsidy for the individual
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How does this affect the State of ND
• Three areas to consider:
– Medical Assistance
– Individual Mandate
– Federal Insurance Exchange
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Expansion of Medical Assistance
• Medicaid expansion to 133% of Federal Poverty Level
and early expansion of Medicaid,
• Individuals making up to $14,859 per year.
• 100 percent of costs will be paid by federal
government for 3 years; moving to 90 percent after
that.
• Individuals up to 400% of FPL that are not eligible for
MA, tax credits will be available.
• Federal Maintenance-of-Effort (MOE). Requires that
the State of ND, maintain a 275% FPL for children in
ND.
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Individual Insurance Mandate
• Exceptions: Income for IRS filing limit, Veterans, Native
Americans, Undocumented Illegal Alien, 8% of household income.
• Penalty for 2014
– $95 per adult and $47.50 per child up to $285 for a family (or 1% of
Household Income)
• Penalty for 2015
– $325 per adult and $162.50 per child up to $975 for a family (or 2% of
Household income)
• Penalty for 2016
– $695 per adult and $347.50 per child up to $2,85 for a family (or 2.5% of
Household income)
• Insurance must meet Essential Health Benefit mandate, and be
provided by employer, insurance company or insurance exchange.
• “Does this mean small employers drop coverage?”
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State-Based Health Insurance Exchanges
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Effective 2014: States must establish an “American Health Benefits Exchange”
Or a federal exchange will be offered.
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Brings health insurance buyers and sellers together via Web-based standardized enrollment
applications and processes
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To pool risk and offer individuals access to “group” rates
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Allows only “qualified benefit plans” to be marketed
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Exchange would replace the individual insurance market
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Tight regulations on insurance underwriting practices
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Subsidize insurance premiums at 400% of poverty or $88,000
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Private sector plans only; no new Medicare-type govt plan, though OPM will offer two qualified
multi-state plans
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Insurance Exchange in ND
• State of ND is not actively pursuing it’s
own exchange
• Federal Exchange will be offered in ND
• Details of the program are available at
www.healthcare.gov
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What can you as an Employer do…
• Need for education: What do the new laws mean to your
employees and their coverage?
• Prepare for open enrollment and the implementation of
requirements scheduled to take effect for your next plan
year
• Put in place a mechanism to track the value of employerprovided coverage so you can report it on W-2s
• Have Bearence provide a HCR Benefit Cost Analysis
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Five Things you might not Know about HCR??
• Fake tanners will have a 10% tax at purchase
• Smokers can be charged up to 50% more for health
insurance in 2014.
• Employers to provide a private, non-bathroom location
for employees (Moms) who are breastfeeding their
children.
• Calorie / Nutritional information must be displayed by all
restaurants with 20 or more locations.
• Service industry costs to go up. Papa Johns estimates
a price of Pizza will go up 20 cents per order.
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• For further information contact:
Gary Helm
Director of Employee Benefits
Bearence Management Group
Direct Dial: 651-379-7906
[email protected]
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Impact, Analysis & Transition Strategies
Pat Bellmore, Regional Manager
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Employer Impact
What are Employers Thinking About?
Reform law could fuel self-funding
- Business Insurance
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Employer Impact
Refining Benefit Strategy
As employers develop their post-reform benefits strategies, it is important
to consider key factors for sponsoring coverage
Economics
Industry
Trends
There are many important
considerations to choosing the right
benefit strategy:
• Financial incentives to sponsor group
healthcare coverage
• Talent acquisition, retention, and
employee engagement
Company
Culture
Talent
Managemen
t
• Company culture and the nature of the
social contract with employees
• Industry trends and competitor positioning
• Employee health and wellness
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Employer Impact
Evaluating Economic Factors
Changes in consumer incentives to purchase in the individual market may
change employers’ value proposition to offer coverage
Pre-Reform
Group
Market
Individual
Market
Post-Reform
Emerging
Individual Market
Incentives
State
Exchanges
Premium
Subsidies
Cost Share
Subsidies
Guaranteed
Issue
Age Banding
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Employer Impact
Understanding Employer Impact
The economic impact of reform to employers will vary depending on
existing benefit solutions and characteristics of the workforce
Factors that Impact Decisions around Healthcare Reform
Employer Specific:
Employee Specific:
Market Based:
• Employer size
• Average employee
incomes
• Individual premiums
• Employer premiums
• Premium cost sharing
levels
• Penalties and subsidies
• Workforce demographics
(e.g., family structure
and age)
• Employee participation rate
• Grandfather Status
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Calculating Financial Incentive
An employer’s net financial incentive to offer coverage reflects the savings
or costs of dropping benefits while making employees “whole”
Premiu
m
Paymen
ts
Make
Whole
Payments
Net
Employ
er
Incentiv
e
Payroll Tax
Corporate
Tax
Deduction
Penalty
Expenses
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Employer Impact
Non-Monetary Factors
An employer’s decision to offer benefits will be informed by both financial
and non-monetary considerations
Important Considerations:
• What are the reasons why your company has
decided to offer benefits?
• What do your employees value most about
employer sponsored benefits and would a
change be disruptive to your employees and
workplace?
• How would a change in benefits impact your
recruitment and retention outcomes?
• Would you be affected by your industry’s
dynamics and competitors’ approach to post
reform benefit strategies?
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Analysis & Transition
Employer Decision Points
Book of business modeling can be used to evaluate employers’ propensity to
adopt certain benefits strategies in the post-reform market
Employer Benefits Strategy
Options
Maintain/Update
Current Benefit
Strategy
Drop Coverage
For All Employees
Shift from Risk to
ASO
Shift to Defined
Contribution
Employers may respond by taking action to reorganize their workforce
structure or to incentivize certain employee populations to opt-out of group
coverage
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Wrap-Up
For More Information
Please reference the materials below for more information regarding
healthcare reform
1.
Blue Cross and Blue Shield of North Dakota: Health Reform Facts
https://www.bcbsnd.com/healthreform/
2.
Ask Blue Healthcare Reform: Interactive Tool
http://www.askbluereform.com/
3.
Kaiser Family Foundation: Implementation Timeline
http://healthreform.kff.org/timeline.aspx
4. Additional Health Reform Information
http://healthcare.gov
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