Transcript Health Care Reform and Managing

Sorority and Fraternity Roundtable
November 11, 2013
Deb Freeland, Principal
[email protected]
CLAconnect.com
©2013 CliftonLarsonAllen LLP
©2013 CliftonLarsonAllen LLP
Understanding the Affordable
Care Act
• Employer penalties have been delayed, but a
number of ACA (“Obamacare”) issues remain
• Are you prepared to comply in 2014 with….?
©2013 CliftonLarsonAllen LLP
Compliance Issues
◊ Health Insurance Exchange notice (10/1/2013)
◊ Summary of Coverage and Benefit change notices
◊ 90-calendar days maximum waiting period for health benefit
eligibility
◊ Full-time status/large employer: Have you analyzed whether you
will need to comply in 2015 or pay the large employer penalties
for no or unaffordable coverage?
◊ Affordability – Have you determined if your plan is “affordable”
for your employees? Or whether you should make changes to your
benefits to be ready to comply in 2015?
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• Do you know if the ACA considers your company
small or large?
• How will “control” definition impact small vs. large
determination?
• Do you know how to calculate small vs. large?
• Do you know what provisions of the ACA you need to
comply with?
• Do you know what opportunities are available?
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Small vs. Large Employer
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Law does NOT require employers to offer health insurance
•Large employers subject to one
of two “shared responsibility”
penalties if any FT employee
receives Exchange subsidies
–For employers that own multiple
companies, the 50 + employees is
determined by control group or
affiliated service group
For “minimum essential coverage”, see IRS Notice
2012-31 at: http://www.irs.gov/pub/irs-drop/n-1231.pdf
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2015: Potential Large Employer Penalties
Large employer = 50
or more full-time
employee + FTEs
FT employee = avg. 30
or more hours of
service per week
FT equivalents =
Hours worked in a
month by all PT
employees divided by
120
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Penalty only assessed if a FT employee receives Exchange subsidies.
Employees ineligible for subsidies if employer coverage affordable
No Insurance Coverage Penalty
Amount = $2000 x each full-time employee
(after first 30 employees)
Unaffordable Employer Coverage Penalty If
employer fails to offer coverage that is:
1.
2.
Minimum essential coverage and minimum 60%
actuarial value offered to employees and their
children under age 26.
Affordable = Employee premium cost for single
coverage < 9.5% of household income.
©2013 CliftonLarsonAllen LLP
Employer “shared responsibility” penalties
“Affordable” = the employee
premium contribution for single
coverage is less than 9.5% of their
MAGI household income, or one
of three employer safe harbor
options exist. (e.g., W-2 wages)
Maximum penalty = no insurance
penalty
Inflationary adjustments to
penalties begin in 2015
Employer pays no penalty for
Medicaid eligible employees
Amount = $3000 x # of full-time employees who
receive exchange subsidies
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www.CLA Connect.com/HIP
©2013 CliftonLarsonAllen LLP
Health Insurance and Penalty (HIP)
Calculator
• If a large employer, given the delay in the
implementation of the penalties, what are you doing
to prepare for the January 1, 2015 implementation?
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Preparing for 2015
– Nothing, there is no need because it is too far off and
could still be repealed by a new Congress
– Assessing affordability of what we offer
– Have you considered the impact on your bottom line of
the employees who don’t current enroll in your benefit
offerings?
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• Competing against the Exchange - A new type of
benefit evaluation
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Health Insurance Exchanges
– Exchange offerings vs. employer benefit, which is better?
– By making employee-only coverage affordable, your
employees and their families are disqualified from
receiving Exchange subsidies
• SHOP plans
– Small employers premium tax credit
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• Given the new Exchanges or marketplaces, what is
your company planning to do with its benefits?
©2013 CliftonLarsonAllen LLP
What is Your Company Planning to Do?
– Continue to offer coverage,
– Add new coverage where no health insurance was
previously offered
– Drop coverage and risk penalties
– Drop coverage and increase employee wages or add
another benefit.
◊ If dropping coverage, how will your employee react (impact on
culture, morale/production, ability to retain attract talent, etc.)?
– We haven’t evaluated the impact yet.
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•
•
•
•
Community rating: age and health rating bands
Maximum out of pocket and deductible limits
Guaranteed issue
High-risk pool thrown into Exchange/small group
market
• ACA fees:
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Factors Driving Employer Premium Costs
– PCORI, Exchange Reinsurance fee, HIT tax, Cadillac Tax
• Considerations: self-insured vs. fully-insured
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•
•
•
•
Fewer full-time workers
Offering minimum value or skinny benefit plan
No more coverage for spouses
Re-allocate contributions: from family coverage to
single coverage
• Change proportion of the premium paid by
employer/employee
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Strategies For Health Care Cost Reduction
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• Increase/decrease wages to adjust affordability
©2013 CliftonLarsonAllen LLP
Strategies For Health Care Cost Reduction
(Continued)
– Consider associated payroll tax increases
• Pay non-deductible penalty vs. contribute toward
premium
– Make coverage less affordable to send more employees to
exchange
• Premium vs. HRA contributions : where is the bang
for the buck?
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©2013 CliftonLarsonAllen LLP
©2013 CliftonLarsonAllen LLP
Deb Freeland
Principal, Healthcare
[email protected]
317-569-6230
linkedin.com/company/
cliftonlarsonallen
CLAconnect.com
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