Transcript Patient Protection and Affordable Care Act PPACA

NAVIGATING THE PATIENT PROTECTION AND
AFFORDABLE CARE ACT (PPACA)
Key Provisions Impacting
Small Business
What is PPACA?
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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
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This presentation is focused on companies with less
than 50 employees
Key Benefit Mandates
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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
Most carriers have/are modifying the plans they
offer to conform to these requirements
Three New Terms
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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 to
29-hour jobs)
Insurance Exchanges
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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
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Congress mandated continuation of individual
and group coverage outside the exchanges
Individual Coverage
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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
Main Impacts on Employers
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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
Employer Administrivia
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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
Taxes and Fees
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Employer credit: up to 35% of 2013 premiums
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3.8% tax on investment income in effect for some
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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
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Where is PPACA taking us?
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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.
Towards a Single-Payer System
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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
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
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For More Information
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http://www.sba.gov/healthcare
http://www.dol.gov/ebsa/healthreform
http://healthcare.gov/
http://www.theihcc.com
www.familybusinessoffice.net
Wayne Peterson … (800) 659-4570