Transcript What does ObamaCare mean for your business?

Healthcare Reform: Where are we
NOW?
Presented by: Joey Janssen, Employee Benefit Specialist
August 23, 2013
“We Make Benefits Work”
Change
“Incredible change happens in your life
when you decide to take control of what
you do have power over instead of craving
control over what you don't.”
-Steve Maraboli
“We Make Benefits Work”
Quote of the Day – August 22
“Failure
to hit the bulls-eye is
never the fault of the target”
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Current Headlines
• Employer Mandate Delayed until 2015
– Individual Mandate still on track
• Out of Pocket Maximum Limits Revised for
2014 – Not delayed
• Exchanges – Still on track??
• National Employers & Universities Slash
Benefits – Stating healthcare law (Spouse
Coverage)
– University of Virginia & UPS
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Current Headlines
• Navigator Grants – 67 Million
• Recent study from Employee Benefit Advisor
state Navigators are the LEAST likely sources
for consultation on the new healthcare law
• Aetna backs out of State-Based Exchanges
• The 40 Hour is Full Time Bill – Bipartisan
attempt
Today’s Agenda
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PPACA Highlights
Small Employer Defined
Small Group Deductible Ceiling
Group Rating Factors – Rate Limitations
Pricing Changes & Adjusted Community Rating
Notification of Exchanges
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Agenda Continued
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What is a Large Employer?
Full Time Equivalents
Common Ownership
Measurement Periods– PLAN NOW
Pay or Play Mentality--DELAYED
Employer Mandate– DELAYED
Waiting Period Limitations
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Individual Mandate
• Who?
–
All citizens of the United States of America
• What?
–
Must purchase health insurance
• When?
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Beginning Jan 1. 2014
• Why?
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The Patient Protection and Affordable Care Act
• How?
• What if I don’t comply?
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Additional taxes
2014- $95 or 1% of your household income over the filing threshold
2015- $325 per uninsured or 2 % of your household income over the filing threshold
2016 & beyond- $695 per uninsured person or 2.5% of household income over the filing threshold
WHICHEVER IS GREATER
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New Benefit & Coverage Rules
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Employer Impacts
Description
Individual
Small Group
Fully Insured
Large Group
Fully Insured
Self-Funded
Essential Health Benefits
(EHB)
• Health Plans must provide Essential
Health Benefits for individual and small
group
Yes
Yes
No
No
OOP Max
• OOP limits must comply with OOP
limits for HSA plans
Yes
Yes
Yes
Yes
• All cost sharing (including copays) for
EHB services must count toward OOPM
Deductible
Limits
• Beginning 2014 plan design deductibles
may not exceed a $2,000 (self-only) or
$4,000 (other than self-only) annual
limitation
No
Yes
No
No
Metallic Levels
• Four tiers of coverage for EHB
packages: Bronze, Silver, Gold, and
Platinum and catastrophic coverage
(under 30-year-olds only)
• Requirement to meet actuarial value of
one of four plans
• Requirement in and out of Exchange
Yes
Yes
No
No
Pre-existing Condition
Exclusion
(All Ages)
• Beginning in 2014, pre-existing
condition exclusions must be removed
for all members, not just those under
age 19
Yes
Yes
Yes
Yes
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Essential Health Benefits
Pediatric
services,
including oral
and
vision care
Preventive /
wellness and
chronic disease
management
Ambulatory
patient
services
Emergency
services
Hospitalization
10 essential
health benefits
Laboratory
services
Maternity and
newborn care
Rehabilitative
Mental health
and
and substance
rehabilitative
use disorder
services and Prescription
services
devices
drugs
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Premium Impacts and Pricing
Many consumers and employers will face substantial price increases
Individual Market
Small Group Market
Large Group
Premium Increase *
Premium Increase **
Premium Increase
-5% to +50%
25% to 200%
Community
Rating
-25% to 25%
Guaranteed
Issue and
Rating Rules
0 - 100%
Employer
Movement
2-3%***
Product
15 - 30%
10%
Taxes/Fees
3.8%
Avg Rate
Increase
10%
Avg Rate
Increase: 10%
Pre-Reform
Post-Reform
Reform Compliance drives significant price
increases.
15% to 20%
Product
3 to 5%
Product
6 - 10%
10%
Avg Rate
Increase
10%
Pre-Reform
Taxes/Fees
3.8%
Avg Rate
Increase
10%
Post-Reform
Community Rating causes
significant disruption for
many groups.
10%
Avg Rate
Increase
10%
Taxes/Fees
3.8%
Avg Rate
Increase
10%
Pre-Reform
Post-Reform
Incremental Increase to rates
beginning in 2013 to cover taxes,
fees and benefits.
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Small Employer
• In Florida, a small group will continue to be
defined as under 50 employees for 2014 and
2015
• In 2016 small groups will be defined as
employers with 2-100 employees
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Deductible Ceiling
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$2,000 Single / $4,000 Family
What does this mean?
Is this attainable?
Will there be any exceptions?
– Bronze level plans, 60% actuarial value
• You could see plans with $5,000 deductibles
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Adjusted Community Rating
• Adjusted Community Rating will apply to individual and fully
insured small group health insurance
• Pricing Restrictions will begin on or after January 1, 2014
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Rating Factors & Premium Restrictions
Group Rate Factors are limited to
• Geographic Area
• Age (3:1 limit)
• Tobacco Use (1.5:1 limit)
Rates may not vary by
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Gender
Health Status
Claims History
Medical Underwriting
Group Size
Industry
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Pricing Today and Beginning 2014
Additional Rating Factors Being Eliminated or Changed
• Size Factors (eliminated)
• Gender differentiation (eliminated)
• Typically 10-1 Age slope (changed/reduced)
Future
State
MRRF
1.0
Current
State
High
MRRF
Less Healthy or
Longest Duration
groups and
Highest Rate
Healthiest or Newest
groups and Lowest Rate
Current
State
Low
MRRF
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Notification of Exchanges
• What is it?
• Deadline to comply – October 1, 2013
• Who gets them?
– Full-time, part time, variable
• Should I send them now or wait?
• Where do I find them?
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2014 Exchange Options
• Public Exchange for Individuals
• Public Exchange for Small Groups
• Private Exchanges
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Public Exchange for Individuals
(Marketplace)
• Subsidies available for Individuals:
– Under 65
– Not Eligible for Employer Coverage
• Or is it not affordable
– Not Eligible for Medicaid or Medicare
– The high premiums are still there – who pays?
*Subsidies available for those at 100% - 400% of
Poverty Level
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Public Exchange for Small Groups (SHOP)
• Available in 2014
– 2 Plans per metallic level- no competition
• Purchased through an agent
• 50% Tax Credit Available for Employers:
– <25 Employees
– Average Annual Wage <50K
– Contribution at least 50% of EE Premium
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Private Exchanges
• Similar to public exchanges, except:
– NO Subsidies or Tax Credits Available!
– NOT operated by the government, but Insurance
Carriers and Agencies!
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New Waiting Period Guidelines
• Waiting periods for Full Time employees
cannot exceed 90 days
– 90 Days first of month no longer a compliant
option.
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Adapting to the New World of
Healthcare
• How do you think insurance companies will
respond?
– Innovation?
– New Concepts?
• Special Enrollment Periods
• Self Insured
• Returne of Premium
– Creativity?
• Plan Designs
• Plan Functionality
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Creativity & Change
• United Healthcare
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Renewal Dates
Plan Designs
“Private” Exchanges
Return of Premium
• Aetna
– New Business
– Existing Business
– Private Exchanges
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Small Business Options
Today
• Offer Employer Sponsored
Health Insurance
• Don’t Offer Employer
Sponsored Insurance ( No
Penalty)
January 1, 2014
• Offer Employer Sponsored
Health Insurance
• Don’t Offer Employer
Sponsored Insurance ( No
Penalty)
Offering Employer sponsored benefits may look
different than it does today but will still be a viable
way to provide value to your employees
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Small Group – What To Consider Doing
Now?
• Consider renewing 12/01 – WHY??
• Consider return of premium programs
Large Group Discussion
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What is a Large Employer?
Full Time Equivalents
Common Ownership
Measurement Periods– Plan NOW
Pay or Play Mentality-- Delayed
Employer Mandate-- Delayed
Waiting Period Limitations
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What is a Large Employer?
• A large employer is defined as a company that
has greater than 50 full time equivalents.
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Full-Time Equivalents
• Why are FTE’s important?
– This is used to determine whether or not an
employer is qualified as a large employer.
– Full Time Employees: 30 hours or more
• How do you calculate FTE’s?
– Add together the total # of FTE’s for the month,
plus a number that is equal to the total number
hours worked in a month by part time employees,
divided by 120
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Full Time Equivalent Example
Large or Small Employer?
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46 Full Time Employees
20 Part Time Employees
# Hours Worked Per PT Employee: 30
Total Number of Hours Worked by PT EE: 600
How many full time employees will this
company have? 51
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Common Ownership
- Used to determine if you are a large employer
- 0-20% ownership
- Rarely found to have common ownership
- 20-50% ownership
- Assumed to have no common ownership but the burden to report and
show that it does exist lies with the employer
- 50-80% ownership
- Common ownership assumed and the employer must show that it
doesn’t exist
- 80-100% ownership
- Common ownership assumed
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Why is Common Ownership
Important?
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Business 1: 20 Employees
Business 2: 40 Employees
Business 3: 5 Employees
Total Number of Employees: 65
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Measurement Periods
• We have more than 50 full-time employees so we are subject to the
employer mandate penalties. How do we know which of our employees
is considered “full-time” requiring us to pay a penalty if they qualify for
premium tax credits at an exchange (if the employee has a variable work
schedule or is seasonal)?
• Through the end of 2014, for purposes of the employer mandate
penalties, the guidance permits you to use a “look-back measurement
period/stability period” safe harbor to determine which of your
employees are considered full-time employees. You may use a standard
measurement/stability period for ongoing employees, while using a
different
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Measurement Periods
• Variable Hour Employees – “Reasonably Determine”
• Look back period
– 2013 Deadline – July 1
• Standard Measurement Periods
– Ongoing Employees
• Initial Measurement Periods
– 3, 6, 9 or 12 months
• Stability Periods
– Equals the IMP
• Administrative Periods
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Large Group Participation &
Contribution
• Current: 75% Participation amount eligible
employees; 50% of total population
• Current: Minimum 50% contribution
• Out of State Employees?
• Multiple Carriers?
• 2014 and beyond?
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Or
Will I be Subject to Penalties?
• Do I have > 50 Full Time
(FTE) Employees?
• Is my health plan deemed
affordable? (9.5%
threshold)
• Does my health plan meet
the minimum 60% actuarial
value?
Mentality
How will Penalties be Assessed?
• Do I offer coverage? (Play)
– $3,000 penalty per employee
receiving government
subsidy.
• Do I cancel all health
benefits? (Pay)
– $2,000 penalty per employee
(minus 30)
– This is related to self insured
plans more than fully insured
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Tax Penalties Continued
$2,000 Penalty
• $2,000 will be assessed if
employer sponsor coverage
is not offered
• How is this penalty assessed
if an employee only works 9
months?
$3,000 Penalty
• What is the trigger?
• Coverage is deemed
unaffordable – over 9.5%
gross
• Employee goes to exchange
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W2 Safe Harbor
• Under the Form W-2 safe harbor, an employer could
determine affordability by referring to an employee’s wages
from that employer. Wages for this purpose would be the
amount required to be reported in box 1 of Form W-2
• This rule can help an employer determine their contribution
strategy amount.
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Contribution Strategy Idea
• 75 Employees
• Require employees to pay $250 per month towards
premium or $3,000 annually
• ER would only pay penalty on those employees
making under $31,250 AND receiving a subsidy
• What about those under $31,250?
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New Options for Large Group
Flexibility & Control
• United Healthcare
– ASO- Partially Self Funded – Return of Premium
– 51+
• Cigna
– Proshare (partially self funded)
– Share in the savings
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What Should You Do Now?
• Create a plan
• Evaluate ALL of your options
• Make a decision that is best for YOUR business
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Questions??
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