Health Care Reform Essentials 8/8/2018. Agenda

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1 Health Care Reform Essentials Presented by Jenny Arthur, MBA, SPHR Agenda What s all the news about? Basic Employer ACA Provisions The Employer Mandate Cheat Sheets Q & A 1

2 Recent Changes to ACA Day One Executive Order October 2017 Executive Order & Subsidy Announcement Tax Reform Law States choose Essential Health Benefits (10 50) Stronger checks to verify income in Marketplace Makes SHOP Enrollment through brokers easier Repeals Individual Mandate Weakens Medical Loss Ratio requirements 2

3 Health Care Reform: Basic Employer Provisions 3

4 Required Notices Notice of Exchanges and Subsidies Two templates Given to all new employees within 14 days of hire Applies to all employers Summary of Benefits and Coverage (SBC) Apples to apples approach Carrier makes, employer distributes Open enrollment and new enrollees 4

5 Updated COBRA Notice Federal COBRA applies to employers with 20+ employees Allows employees and family members losing coverage to continue coverage by paying the full amount of the premium to the employer Notices must contain verbiage about the Marketplace, most recent version expires 12/31/2019 Two main notice requirements: Initial COBRA Notice and COBRA Notice & Election Form 5

6 ACA: Small Business Tax Credit Up to 50% tax credit on employer-paid premiums (up to 35% for nonprofits) Tax credit, not a deduction To be eligible, the employer must: 1. Contribute at least 50% of the cost of health care single coverage; 2. Pay average annual wages below $50,000; 3. Have less than the equivalent of 25 full-time employees; and 4. Purchase coverage through the state SHOP exchange State Health Care Exchanges All states have one (some set up by Federal government, others by the state, and some by both) Virtual/competitive marketplace offering health plans Individuals and small employers (less than 50 FTEs) may shop in exchanges (some states allow groups of less than 100) States have some flexibility regarding the set up of the exchange(s) and participation requirements 6

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8 Employer Reimbursements for Individual Health Plans Per IRS Notice and Notice : employers no longer allowed to reimburse employees for Individual or Marketplace plans Small employers without health plans may offer $4,950 (individuals) or $10,000 (families) per year, pre-tax un bona fide HRAs (called QSEHRAs) Penalty: $100 per employee, per day May increase taxable wages as long as: Increase is not conditioned upon purchase of health insurance, and Substantiation of health insurance not required for increase 8

9 Employer Mandate 50+ Full Time Equivalent Employees Finding Full Time Equivalent Employees (FTEs) Part-Time Employee Equivalents Full-Time Employees Owners Full-Time Equivalent Employees (total monthly parttime hours/120) (30 hours/week or more) (Sole proprietors, Partners in a Partnership, Members of LLCs Taxed as a Partnership, and Shareholders who own 2% or more in an S Corporation) 9

10 Employer Mandate Requirements 1. Minimum Essential Coverage/Value 2. Affordable Rate 3. All Full-Time Employees 10

11 Exclusively refers to employee contribution to the plan Misconception: certain contribution % required Coverage is considered affordable if employee contributions for employee-only coverage do not exceed 9.56% of an employee s household income in

12 Penalties A Penalty: when a plan that meets minimum coverage requirements is not offered $2,260 in 2017 ($2,320 in 2018) for each full-time employee, excluding first 30 [total # of employees in firm (subsidized and unsubsidized) minus 30] x [$2,260] B Penalty: when minimum coverage is provided but it is not affordable $3,390 in 2017 ($3,480 in 2018) for each employee who actually receives federal premium subsidy Overall Penalty: lesser of A Penalty or B Penalty (penalties calculated monthly, paid annually) 12

13 Reporting for Applicable Large Employers Reporting Obligation 1095-C Employee Fulfillment: Employer provides 1095-C to applicable employees Deadline January 31 st, 2019 Paper Filing with IRS: Employer files their 1094-C and 1095-C Forms with the IRS February 28 th, 2019 Electronic Filing with IRS: Employer files their 1094-C and 1095-C Forms with the IRS April 2 nd, 2019 *Electronic filing is required unless the employer will be submitting fewer than C forms for the year 13

14 Cheat Sheets Provisions by employer size Cheat Sheet #1 Provisions for Small Employers (<50 employees), without Health Insurance Plan: 1. Notice of Exchanges and Subsidies 2. Lactation Breaks 3. No reimbursements allowed for Individual or Marketplace health plans unless bona fide QSEHRA established 14

15 Cheat Sheet #2 Provisions for Small Employers (<50 employees), with Health Insurance Plan: 1. Notice of Exchanges and Subsidies 2. Lactation Breaks 3. Small Business Tax Credits (if less than 25 employees) 4. Summary of Benefits and Coverage 5. New COBRA Notice Language Day Waiting Period Cheat Sheet #3 Provisions for Large Employers (50+ employees), with Health Insurance Plan: 1. Notice of Exchanges and Subsidies 2. Lactation Breaks 3. Summary of Benefits and Coverage 4. New COBRA Notice Language Day Waiting Period 6. Employer Mandate 7. Employer Mandate Reporting 15

16 Q & A Jenny Arthur MBA, SPHR, SHRM-SCP HR Consultant Over her 15 years of experience, Jenny has specialized in helping small to mid-sized businesses across a variety of industries reduce their risks and manage employee relationship issues. Jenny holds a Bachelors of Business Administration (BBA) degree in Human Resources Management from the University of Georgia and a Masters of Business Administration (MBA) degree with a concentration in Human Resources Management from Georgia State University. 16