Affordable Care Act Where are we now?

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1 Affordable Care Act Where are we now? Mark A. Tedford, CEO Rebecca Stewart, Esq. Tedford Insurance (918) February 26, 2016

2 PROGRAM OVERVIEW Employer Mandate (Pay or Play) IRS Forms for Reporting Code Series 1 Code Series 2 Safe Harbors Penalties Individual Mandate Congressional actions Associations

3 Employer Mandate Pay or Play Beginning in 2016 all organizations with 50 or more full-time employees or equivalents (Applicable Large Employers ALE) were required to insure at least 95% of their full-time employees to avoid liability under the ACA's shared responsibility provisions: Do not offer minimum essential coverage to substantially all FTE s. Penalty = $2,000/employee/year ( A Tax) Do not offer minimum essential coverage that is affordable. Penalty = $3,000/employee/year ( B Tax)

4 Employer Mandate Pay or Play Full-Time Employee an employee who is employed on average, per month, at least 30 hours of service per week (or at least 130 hours of service in a calendar month). FTE a combination of employees, each of whom individually is not a full-time employee (has fewer than 30 hours of service per week), but who, in combination, are equivalent to a full-time employee. An Aggregate Group is commonly owned or otherwise related or affiliated employers, which must combine their employees to determine their workforce size.

5 IRS FORM 1094 C and 1095 C These are filed by employers that are required to offer health insurance coverage to their employees under the Affordable Care Act

6 Code Series 1 1A. Qualifying Offer: Minimum essential coverage providing minimum value offered to full-time employee with employee contribution for self-only coverage equal to or less than 9.65% mainland single federal poverty line and at least minimum essential coverage offered to spouse and dependent(s). February 18, 2018 Rebecca Stewart - Tedford Insurance

7 Code Series 1 1B. Minimum essential coverage providing minimum value offered to employee only. 1C. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) (not spouse). 1D. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to spouse (not dependent(s)). 1E. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) and spouse. 1F. Minimum essential coverage NOT providing minimum value offered to employee, or employee and spouse or dependent(s), or employee, spouse and dependents. February 18, 2018 Rebecca Stewart - Tedford Insurance

8 Code Series 1 1G. Offer of coverage to employee who was not a full-time employee for any month of the calendar year and who enrolled in self-insured coverage for one or more months of the calendar year. 1H. No offer of coverage (employee not offered any health coverage or employee offered coverage that is not minimum essential coverage). 1I. Qualifying Offer Transition Relief 2015: Employee (and spouse or dependents) received no offer of coverage, received an offer that is not a qualifying February 18, 2018 Rebecca Stewart - Tedford Insurance

9 Code Series 2 Safe Harbors 2A Employee not employed during the month. 2B Employee not a full-time employee. 2C Employee enrolled in coverage offered. 2D Employee in a Section 4980H(b) Limited Non- Assessment Period. February 18, 2018 Rebecca Stewart - Tedford Insurance

10 Code Series 2 Safe Harbors 2E Multiemployer interim rule relief. 2F Section 4980H affordability Form W-2 safe harbor. 2G Section 4980H federal poverty line safe harbor. 2H Section 4980H affordability rate of pay safe harbor. February 18, 2018 Rebecca Stewart - Tedford Insurance

11 2018 Reporting Deadlines The IRS issued Notice on Dec. 22, 2017, which extended by 30 days the 2018 due date for distributing 2017 health coverage information forms 1095-C or 1095-B to employees, regarding the health care coverage offered to them. The new deadline for supplying these forms to employees is March 2, This 30-day extension is automatic. Employers and providers don't have to request it.

12 Individual Mandate A key provision of the Affordable Care Act. (ACA) is the individual mandate, which requires most individuals to purchase health insurance coverage or pay a penalty.

13 Congressional Action After nearly a decade since the Affordable Care Act was signed into law, the U.S. is poised to find out what Obamacare will look like without its linchpin requirement for people to buy health insurance. The sweeping tax reform bill that passed late last year included a repeal of the requirements that everyone has health insurance, starting in 2019.

14 It s a Brand New Ballgame New regulations from the Trump administration are designed to expand access to cheaper, low-quality plans. President Trump signed an Executive Order on October 12, 2017 that aims to provide additional flexibility and coverage options under the Affordable Care Act (ACA). The White House also announced that it would stop paying ACA costsharing reductions (CSRs).

15 The executive order directs the Secretary of Labor to consider proposing guidance that would expand access to Association Health Plans (AHPs). The expansion would potentially allow employers, especially small employers, to join together to offer health coverage to their employees.

16 These larger Associated groups could then self-insure or be treated as large group plans. Because plans in the large group market are not subject to the ACA s essential benefits and other mandates, AHPs could potentially offer narrower, cheaper coverage.

17 Association Health Plans Health Insurance trends: Expected Group Plans 6% rate increase 46% of employers reduce coverage to reduce costs Expected Individual Increase on Insurance exchange 34%

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19 Cost Saving Approaches High Deductible plans Providing coordination for high-cost Claimants Providing direct primary care Pharmacy Benefit Management (Excluding High cost drugs from Pharmacy Wellness

20 Association Health Plans (AHP) Been around for a while Restricted under Obamacare Recent Executive orders Expanding availability

21 Recent Changes to AHP rules: Changed ERISA definition of Employer AHP treated as Single Employer Allowed AHP across state lines and industries Relaxed Bona Fide purpose rule

22 Rules that Still Apply: Employer Mandate Employer must pay 60% of Health Cost No discrimination on health conditions or healthiness of s single group Rules on eligibility

23 Advantages of an AHP More buying power Exempt from Minimum Essential Coverage Not obligated to spend 80% of revenue on benefit costs Relaxed underwriting Rules

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