Health Care Reform

Transcription

1 Health Care Reform

2 The Individual Mandate Via the Exchange may qualify for subsidy or premium tax credit Other source - most likely from the employer

3 An employee ONLY receives a premium subsidy if he/she meets two conditions: 1. To be eligible for a subsidy, the employee s household income must be less than 400% of the Federal Poverty Level (FPL), which varies with family size. For a family of four (except in Alaska and Hawaii), 400% FPL for 2012 = $92, To be eligible for a subsidy, the employee s portion of the insurance premium on the employer s plan must exceed 9.5% of the employee s household income. Again, this income includes wage and investment income of the employee, spouse, dependent children, etc. To receive the subsidy, the employee must opt to leave the employer s plan and purchase insurance in the individual exchange.

4 As of January , employers with 50 or more full time OR full-time-equivalent employees MUST provide affordable health care coverage that provides the minimum essential benefits to their employees OR Pay a Penalty (tax) This is why we call the mandate

5 Employees are a company's greatest asset - they're your competitive advantage. You want to attract and retain the best; provide them with encouragement, stimulus, and make them feel that they are an integral part of the company's mission. - Anne M. Mulcahy (Former President, CEO, Chair of the Board, XEROX)

6 50 full-time employees OR 50 full-time equivalents

7 130 Hours Per Month What are Full Time Equivalents? (FTEs) Take all employees that work under 130 hours per month, and add their monthly hours together. Divide that number by 130 = FTE s

8 EXAMPLE: 45 Full-Time Employees plus 10 Part-Time Employees working a total of 800 hours per month 800 / 130 = 6.15 FTE (Round UP! = 7) 45 (FT)+7 (FTE) = 52 MANDATED!

9 ONLY full time employees (130 hours per month) need to be offered coverage BUT The full-time-equivalent employees count in order to determine if you have to offer coverage at all

10 Employee-sponsored health plans must cost the employee <9.5% of their W2 wages. Example $40,000 annual pay = $3800 or less annual employee responsibility $40,000 annual pay if employee portion is over $ per month then unaffordable

11 Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Preventive and wellness services and chronic disease management, and Pediatric services, including oral and vision care

12 Percentage of coverage is calculated for each service. Coverage percentage must be 60% of actuarial value or greater Deductibles and Co-Pays taken into consideration Private Exchange programs Bronze: 60% actuarial value Silver: 70% actuarial value Gold: 80% actuarial value Platinum: 90% actuarial value

13 Does the employer have at least 50 full-time or FTEs? IF NO then cannot be charged a penalty Tax-Credit: If company has 25 or fewer employees and average wage up to $50,000 it may be eligible for a tax credit

14 IF you have 50 or more full time or full-timeequivalent employees and you don t offer a plan, and ONE employee receives a subsidy or a tax credit penalty!

15 EXAMPLES:

16 IF you offer a plan, but ONE employee s contribution is more than 9.5% of his or her W2 wages penalty!

17 EXAMPLE 1:

18 EXAMPLE 2:

19 IF you offer a plan, but that plan doesn t include 60% of the minimum essential benefits, and ONE employee receives a subsidy or a tax credit penalty!

20 No Worries. We have a chart.

21 As long as an employer s plan meets all of the requirements, and IF an employee decides to decline employer coverage and purchase from the exchange or another source, the employer cannot be fined...even if there is an outside chance that the employee qualifies for a tax credit or subsidy.

22 No No. Entities will be linked by ownership. Less than 120 days = no issue More than 120 days count as full-time if over 130 hrs/month OR add to FTE calculation Penalties accrued per month ($2K/yr. = $166.67/mo.)

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24 Be under 50 full-time employees / FTEs Lay off workers Less hours for part-time Increase pay / employer contribution to avoid penalties Over 9.5% of health care costs for lowest paid fulltime employee Increase coverage to avoid penalties Over 60% of total costs covered by plan Pay the Penalty No coverage

25 Increased Turnover Higher wages to offset Higher payroll taxes Decreased Morale Increased confusion from workers Decreased Productivity

26 Have a plan Talk to a specialist Take a census Calculate your options (Penalty Calculator) Make a decision Act on that decision Information is power

27 Calculator

28 Changing Landscape: Writing law as it is implemented Subsidies will fade out Penalties will increase Under 50 employees, safe (for now) Mandate could change in the future Question: What will the exchanges cost? Big Question: How can you retain employees?

29 Strategic Employee Benefits Services (SEBS) of Illinois, Champaign IL A Division of NWM McClure Financial Group All major healthcare providers represented Specialized team with years of experience in employee benefits Team approach your benefits partner Tony Johnston (217) Jared Blaudow (217)