THE PATIENT PROTECTION AND AFFORDABLE CARE ACT UPDATE

Transcription

1 THE PATIENT PROTECTION AND AFFORDABLE CARE ACT UPDATE February 21, 2013 Jonathan Alexander, Esq. Compliance Counsel Pinnacle Claims Management, Inc. Copyright 2013 Pinnacle Claims Management, Inc. Reproduction permission requests should be directed to The information in this webinar and related material should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or Western Growers. This webinar and material is not intended as a definitive statement on the subject addressed. Rather, it is intended to serve as a tool providing practical advice and references.

2 Health Care Reform s Vision Goals of Reform Promise of Robust, Universal Coverage Individual Mandate & Health Insurance Exchanges Employer Pay or Play Medicaid Expansion Health Insurance Market Reforms 2

3 Our Roadmap Patient Protection and Affordable Care Act ( ACA ) Quick Overview of ACA What s Changed & What s Coming New Pay or Play Rules Health Insurance Exchanges Individual Mandate Employer Mandate & Agriculture Determining Applicable Large employer Status Safe Harbor Rules 90 Day waiting period Hourly eligibility reqs. Change in Service: Returning Employees & Optional Rule of Parity 3

4 Health Care Reform Overview March 2010: ACA Enacted Health Insurance Market Reforms in Effect Lifetime Limits Prohibition on Essential Benefits Annual Limits Restriction on Essential Benefits: $750K , $1.25 million , $2 million Exception: Waiver Program Dependent Children Coverage to Age 26: limited exception for Grandfathered plans No preexisting for enrollees under age 19 Restrictions on Rescissions Certain Preventive Benefits Covered with no cost sharing (applies only to Non-Grandfathered plans) Treatment of OTC drugs medical expenses: no OTC drug reimbursements from FSA, HRA, HSA w/o RX 4 Patient Centered Outcomes Research Institute (PCORI) Fees (plans renewing on or after 11/1/2011 through 2018)

5 What to Expect in Uniform Summary of Benefits and Coverage Effective open enrollment periods start on/after 9/23/2012 and for plan years thereafter W-2 Reporting: Plan Medical Benefit cost of coverage through W-2 for tax year 2012 (only for plans filing at least 250 W-2s in 2011) Health FSA cap: salary reductions capped at $2,500, indexed to inflation Insurance Exchange Notices: Notice to employees re: availability of Exchanges, by [Delayed, Fall 2013]. Medicare payroll tax rate increase for high income earners 5

6 What s Coming In 2014 In 2014 Extension of coverage for children to age 26 for Grandfathered Plans Grandfathered existed prior to March 23, Non-Grandfathered plans: created after 3/23/10 or lost grandfathered status No Pre-existing Conditions (guaranteed issue) Annual limits on essential benefits prohibited Individual mandate Auto-enrollment new regulations in 2014 (no requirement to enroll until regs issued). 90 day waiting period limitation Employer responsibilities: Pay or play, Minimum Essential Coverage & Minimum Value Health Care Exchanges are Live and the Essential Health Benefits Package (small group & individual plans) Employer Cost of Coverage Reporting Reinsurer Fees through Wellness Incentives Deductible Caps for individual/small group (can exceed to meet metal level) 6

7 What s Coming Soon Coming Soon to Health Plan Near You: Exchange Notice PCORI Fee IRS Form 720 Minimum Essential Coverage Minimum Value for Applicable Large Employers: Actuarial Value Calculator Released 2/20/2013. Guidance on contraceptive coverage, wellness plans, Mental Health Parity and Addiction Equity Act (MHPAE), Non- Discrimination Rules. 7

8 Transitional Reinsurer Fees In 2014, fully insured & self-funded plans pay a $63 per covered life annual Transitional Reinsurance fee for major medical coverage enrollees. FSA,HRA, Integrated HRA, stand-alone dental and vision not major medical. Fee reduced in 2015 and 2016 then ends Transitional Reinsurance fee used by HHS to help insurers offset unexpected costs of offering coverage through Exchanges Life counts are due to HHS by November 15, HHS generates invoice within 15 days based on head count, payment due within 30 days. Counting lives: 4 methods Actual count: Add up all covered lives for each day for the first nine months of 2014 and divide by 273 (the number of days in the first nine months). Snapshot Count Method: Select at least one day from each of the first three quarters of 2014, add up the numbers of covered lives, and divide by three. Snapshot Factor Method: Same as above, but include same day in fourth quarter. Then count self-only tier average as one number and multiply any other coverage tiers (employee+1, family, etc.) together, then multiply by Add all these numbers together for the final number of covered lives. 8 Form 5500 Method: Add 5500 reported lives at the beginning of plan year and end of year then divided by 2. COBRA enrollees & covered retirees covered by Medicare where plan is primary.

9 PCORI Fees Patient Centered Outcomes Research Trust Fund Fee (PCORI fees) Fees used to fund comparative clinical effectiveness research Impacts plans ending on or after Oct. 1, 2012 but before Oct. 1, Annual $1.00 fee for each covered life for plans ending before Oct. 1, 2013 Annual $2.00 fee for each covered life for plans through October 2019 Plan sponsors required to submit IRS form 720 w/appropriate payment by July 31 of each year. First payment due July 13, Self funded plans can used methodologies above to calculate covered enrollees. 9

10 Women s Preventive Services & Contraception Non-grandfathered plans cover contraceptives with no cost sharing as plans renew after 8/1/2012 Plans May cover a generic drug without cost-sharing and impose cost-sharing for equivalent branded drugs; Plans must accommodate any individual for whom the generic drug (or a brand name drug) would be medically inappropriate, as determined by the individual's health care provider, by having a mechanism for waiving the otherwise applicable cost-sharing for the branded or non-preferred brand version. Generic substitution approach is permissible for other pharmacy products, as long as the accommodation described above exists If generic version not available, or not medically appropriate, the prescribed brand name contraceptive method (determined by the attending provider) plan must provide coverage for the brand name drug without cost-sharing, subject to reasonable medical management 10

11 Maximum Annual Deductibles & Out of Pocket Expenses Maximum Annual Deductible Requirements Small Non-grandfathered plan can only impose deductibles of $2,000 (employee self only )/$4,000 (employee +) Plans offered in small group market may exceed this cap if seeking to meet metal tier Self-funded and large group health plans Not subject to these limitations Maximum Out of Pocket Expenses All non-grandfathered plans (including large self-funded plans) must comply with the annual limitation on out-of-pocket maximums set forth in 1302(c)(1) Ties the annual limitation on cost sharing for plan years beginning in 2014 to the enrollee out-of-pocket limit for high deductible health plans (HDHP): estimated: $6,500/$13,000 (employee/family) for

12 Health Insurance Exchanges Health Insurance Exchanges Created & managed by states or run by federal gov California -- state Arizona federal January 1, 2014: Limited eligibility (individuals & employers less than 100 employees, States can limit to 50) In 2016, expanded eligibility in California: Large employers Employers will not determine employee eligibility for exchange Employee will apply 12

13 Exchange Notice Exchange Notice Requirement (originally 3/1/2013 req.) Employers must notify existing & new employees (on hire date) informing the employee of the existence of Exchanges including: The existence of the Health Insurance Exchange that will become operative as of January 1, 2014; The employee s potential eligibility for federal financial assistance if the employer s health plan doesn t meet affordability and minimum value criteria under ACA and if employee household income is below certain thresholds; and Loss of the employer s contribution to health care coverage if they purchase health insurance through the Health Insurance Exchange. Notice Requirement Delayed (Potentially Fall 2013) 13

14 Individual Mandate Explained Beginning in 2014 ACA requires most individuals minimum essential coverage. Individuals w/o employer sponsored coverage required to get qualifying coverage Buy through health insurance exchange or elsewhere or pay a penalty. The penalty schedule is as follows: In 2014: the greater of $95 or 1% of taxable income. Maximum of $285 per household (3 x $95 = 285) In 2015: the greater of $325 or 2% of taxable income. Maximum of $975. In 2016: the greater of $695 or 2.5% of taxable income. Maximum of $2,085. After 2016: same as 2016, but adjusted annually for cost of living increases. 14

15 Individual Mandate: Exemptions Some individuals exempt from mandate & some exempt from the financial penalty Exempt from the mandate: Those who object based on religious beliefs, Undocumented immigrants; Incarcerated individuals Exempt from the financial penalty: Those without coverage for less than 3 months; Native Americans covered by the Indian Health Service; Persons whose cannot purchase insurance for less than 8% of annual income; and Those with incomes below the tax filing threshold 15

16 Employer Play or Pay Mandate Shared Responsibility In 2014, what are employer shared responsibility requirements? Applicable Large Employer: required to offer substantially all full-time employees & dependents minimum essential coverage that is affordable and provides minimum value In new guidance IRS narrowly defines dependents as: children to age 26 (sons, daughters, step-children, adopted children, foster children, etc.) but excludes spouses. Substantially all means: at least 95% of its full-time employees or fail to cover no more than 5 employees (where 5 employees is greater than 5% of total employees). If any of the 5% of full-time employees receive subsidy through a health insurance exchange the employer penalized an annual penalty of $3,000 per employee who gets subsidy. Can be subject to penalty if fails to offer (or offers unaffordable coverage) and full-time employee goes to health insurance exchange & receives federal tax subsidy General Rule: Applicable Large Employer status calculated on month-to-month basis Safe Harbor Rules: exception applies that allows employers to measure workforce during chosen measurement periods. 16

17 Employer Play or Pay Mandate Pay or Play Considerations To avoid penalty must provide employees opportunity to enroll or decline at least once per year (open enrollment) Employers can t avoid penalty by making offer of unaffordable coverage Employee coverage can be terminated for failure to make timely premium payment (and employer not liable for mandate penalty) Minimum Essential Coverage not yet defined expressly, regulations coming 17

18 Calculating Applicable Large Employer Status Applicable Large Employer Defined Add total number of full-time employees (including any seasonal workers) each calendar month in the preceding calendar year and the total number of full-time equivalents (including any seasonal workers) for each calendar month in the preceding calendar year, and divide by 12. Full-Time Employees defined as working on average 30 hours per week. Full-Time Equivalents not full-time, including part-time and seasonal employees The result, if not a whole number, is then rounded to the next lowest whole number. If the result of this calculation is less than 50, the employer is not an applicable large employer for the current calendar year. 18 If the result of this calculation is 50 or more, the employer is an applicable large employer for the current calendar year, unless the seasonal worker exception applies.

19 Applicable Large Employer Example During each calendar month of 2015, ABC Packing has 20 full-time employees each of whom averages 35 hours of service per week, 40 employees each of whom averages 90 hours of service per month, and no seasonal workers. Each of the 20 employees who average 35 hours of service per week count as one fulltime employee for each month. To determine the number of Full time equivalents for each month, the total hours of service of the employees who are not full-time employees (but not more than 120 hours of service per employee) are aggregated and divided by 120. The result is that the employer has 30 Full time equivalents for each month: o (40 x 90 = 3,600, and 3, = 30). Because ABC Packing has 50 full-time employees (the sum of 20 full-time employees and 30 Full Time Equivalents) during each month in 2015, and because the seasonal worker exception is not applicable, ABC Packing is an applicable large employer for

20 Seasonal Worker Exception During 2015, XYZ Farms has 40 full-time employees for the entire calendar year, none of whom are seasonal workers. XYZ Farms also has 80 seasonal full-time workers who work for XYZ from September through December, XYZ Farms has 40 full-time employees from January through August 2015 (8 months) during and 120 full-time employees during from September through December 2015 (4 months), resulting in an average of 66.5 employees for the year (rounded down to 66 fulltime employees). Importantly! XYZ Farms workforce equaled or exceeded 50 full-time employees (counting seasonal workers) for no more than four calendar months (treated as the equivalent of 120 days) in calendar year 2015, and the number of full-time employees would be less than 50 during those months if seasonal workers were disregarded. Applying the seasonal worker exception XYZ Farms is not considered to employ more than 50 full-time employees XYZ Farms is not an applicable large employer for

21 Seasonal Workers Exception Does Not Apply Same Example as previous slide: Except XYZ Farms has an additional 20 FTEs in August, who are seasonal workers. Remember, in 2015, XYZ Farms has 40 full-time employees for the entire calendar year, 20 FTEs in August (who are seasonal), XYZ Farms also has 80 seasonal full-time workers who work for Employer XYZ from September through December, The seasonal worker exception in does not apply if the number of an employer's full-time employees (including seasonal workers) and Full Time Equivalents equals or exceeds 50 employees for more than 120 days during the calendar year. Because XYZ Farms has at least 50 full-time employees for a period greater than four calendar months (treated as the equivalent of 120 days) during 2015, the exception in paragraph (b)(2) of this section does not apply. 21 XYZ Farms averaged 68 full-time employees in 2015: [(40 x 7) + (60 x 1) + (120 x 4)] 12 = 68.33, rounded down to 68, and accordingly, XYZ Farms is an Applicable Large Employer for calendar year 2016.

22 Aggregating Employees of Controlled Groups 22 Employees that work for a controlled group of corporations or affiliated service group must be aggregated to determine whether they work for a large employer. All entities treated as single employer under Section 414 (b), (c), (m) or (o) are treated as single employer for purposes of Pay or Play Rules & Penalties Large employer status is determined based on the number of full-time employees and full-time equivalent employees employed by the controlled group. The penalties if any, however, will be assessed and paid at the applicable large employer member level and not at the controlled group level. For example: For 2015 and 2016, corporation P owns 100 percent of all classes of stock of corporation S and corporation T. P has no employees at any time in For every calendar month in 2015, S has 40 full-time employees and T has 60 full-time employees. P, S, and T are a controlled group of corporations under section 414(b). Because P, S and T have a combined total of 100 full-time employees during 2015, P, S, and T is an applicable large employer for Each of P, S and T is an applicable large employer member for 2016.

23 Aggregating Employees of Controlled Groups cont. Controlled group exists if the businesses have one of the following relationships Parent-subsidiary, 80% ownership: general rule Brother-sister, and Same 5 or fewer owners own collectively or individually 80% or more with effective control of 50% or more Combination of the above Attribution rules apply and the analysis is complex. You are encouraged to speak with appropriate tax representatives. 23

24 Determining Full-Time Employees 24 Who are full-time employees? In general: any employee who works 30 hours per week or 130 hours per month Common law definition of employee applies All hours of service an employee performs for members of controlled group counted Each hour for which an employee is paid, or entitled to payment from employer is counted (including service hours, vacation, holidays, illness, incapacity, layoff, jury duty, military duty, leave of absence) Hourly employees: actual hours of service from records Non-hourly: employers may calculate hours by counting actual hours of service from records of hours worked and hours for which payment is made or due, using a days-worked equivalency (crediting 8 hours a day for each day with an hour of service), or using a weeks-worked equivalency (crediting 40 hours a week for each week with an hour of service). Employers may use different methods for non-hourly employees based on different classifications of employees if the classifications are reasonable and consistent and may change methods each calendar year. Employers may not use the days- or weeks worked equivalency methods if those methods would substantially understate the hours worked.

25 Determining Full-Time Employees: continued Commission Employees, Adjunct Faculty, Transportation Employees (e.g., Airline Pilots) and Similar Positions: until further guidance is issued, employers with employees in these types of positions must use a reasonable method of crediting hours of service consistent with the purpose of 4980H (pay or play mandate). Methods that result in counting only some of an employee's hours, or that would characterize a "full-time" employee as part-time would not be considered reasonable. Services performed outside of the United States: hours of service do not include hours of service to the extent the compensation for those hours of service is "foreign source income." This means that hours of service generally will not include hours of service worked outside of the U.S. Residency or citizenship is not considered for these purposes. Large employer status determined monthly: Exception to this administrative headache Under new guidance, employer can use Safe Harbor to measure workforce Employers required to document use of Safe Harbor & should amend plans accordingly 25

26 Using Safe Harbor Rules to Determine Full-Time Employees ACA imposes pay or play penalties a month-to-month basis, employers must determine Full-Time Employee every month. Administrative headache. To alleviate the problem an optional look-back measurement method ( Safe Harbor Rules ) was created as alternative to the month-to-month method for determining Full-Time Employees. 26

27 Using Safe Harbor Rules to Determine Full-Time Employees Part 2 The Safe Harbor Rules are complex Use a look-back measurement period for counting employee hours of services, then a stability period when coverage is offered or not offered depending whether employee qualified as full-time during the measurement period (regardless of hours worked during stability period) and an administrative period that allows time for enrolling in a plan (this time period is now commonly referred to as a waiting period). Employers can modify the standard measurement period or stability period from year to year, but cannot alter the periods once begun. The Safe Harbor Rules differ based on whether employees are ongoing or new. If employees are new the rules are different for new Full-Time Employees than they are for Part- Time Employees and Seasonal Employees. 27

28 Safe Harbor Rules Measurement Periods 28 The measurement periods are defined as: Standard Measurement Period: a period of time between 3-12 months set by the employer that applies to all employees. Initial Measurement Period: a period of time between 3-12 months that applies to each employee individually as they are hired. Stability Period: a period of time after the initial measurement period or standard measurement period where full-time employees must be offered coverage. Stability Period cannot be less than 6 months and cannot be shorter than the Standard Measurement Period Administrative Period: The optional period an employer may use after the end of the standard measurement period and immediately prior to the stability period. In general, the administrative period may not be longer than 90 days and must not reduce or increase the measurement or stability period. Measurement period must be same within same category of employee but vary between following categories Salaried and hourly employees; Employees whose primary places of employment are in different states; Collectively bargained and non-collectively bargained employees; Different groups of collectively bargained employees covered by different collective bargaining agreements

29 Safe Harbor Rules for Ongoing Employees 29 Ongoing employee is an employee that has worked for at least 1 standard measurement period. Employer will look back over a Standard Measurement Period to calculate whether an employee was employed an average of 30 hours per week. If ongoing employee qualifies, the employer is required to treat the ongoing employee as full-time for the subsequent, future stability period. If the ongoing employee does not qualify the employer may treat the employee as part-time for the subsequent stability period. Ongoing Employee Elements Subject to Standard Measurement Period between 3-12 months If employee works 30 hours per week during Standard Measurement Period, Employer treats as full time, employer must offer benefits during Stability Period that is equal to Standard Measurement Period (but not less than 6 months) Employer can impose a waiting period called an administrative period of 90 days between the standard measurement period and the stability period, however, the administrative period must neither reduce nor lengthen the standard measurement period or the stability period. To prevent the administrative period from causing gaps in coverage it must overlap with the prior stability period. Example: Employer chooses standard measurement period that runs from October 15, 2014 through October 14, 2015 and a stability period that runs January 1, 2016 December 31, Employer can impose an administrative period between the end of the Standard Measurement Period (October 14, 2015) and the beginning of the stability period (January 1, 2016).

30 Safe Harbor Rules for New Full-Time Employees 30 New Employees Two categories: New Full time New Part-time or Seasonal New full-time employee is an employee that an employer expects will work full time not seasonally (at least 30 hours per week) from the employee s start date. The general rule is that employers must offer coverage to new full-time employees at or within 3 months of date of hire to avoid penalty (90 day waiting period). New Part-time or Seasonal Employees Can impose 12 month measurement period followed by 1 month waiting period (and if employee hired mid-month can tack on those additional days) before offering coverage if they qualify as Full-Time Employees (e.g. work on average 30 hours per week during measurement period). About 13.5 months maximum before offer of coverage to employees that qualify as full time.

31 Returning to Service Returning Employees: Rehired or Returning from Leave of Absence Break of 26 consecutive weeks may result in treatment as new employee Rule of parity: if break is between 4 and 26 weeks and exceeds length of pre-break employment, may treat returning employee as new employee If two instances above do not apply Treat as continuing employee and employee returns to the measurement and stability period that would have applied but for the leave of absence. Continuing employees must be reinstated as soon as possible upon resumption of services. 31

32 When to Offer Full-Time Employees Coverage? After 90 Day Waiting Period Effective first day of plan year after January 1, days If clearly eligible must be enrolled on or before 90 th day Reasonable period to determine eligibility 90 days of being determined eligible; or If uncertain, e.g. seasonal,13 th month from start date (plus days to 1 st of month if hire date was in middle of month ~ 13.5 months) 32

33 When to Offer Coverage to Part-time Employee that Converts to Full-time Plan Covers full-time employees (30 hours per week on average) Part-time employees eligible if full-time after 12 month measurement period After enrolling, coverage effective 1 st day of following month Part-time hired employee hired November 26, Initial measurement period ends 11/25/2013 Employee offered opportunity to enroll in coverage effective 1/1/2014. Plan complies with 90 day rule: coverage can become effective w/in 13 months of hire date, plus the remaining time until 1 st of next month (13.5 ish months permissible). 33

34 Eligibility Based on Number of Hours Worked Plan covers part-time employees after completion of 1,200 hours. Employee hired in January works 25 hours per week will hit 1,200 in December. Plan complies with 90 day rule: as long as coverage begins no later than 91 st day after working 1,200 hours Violation of rule if plan has cumulative hours requirements over 1,200 34

35 Employer Pay or Play Mandate: Penalty Calculation Penalty fee may assessed if: Employer Fails to Offer Coverage and 50 or more FTEs A full time employee receives tax credit or premium assistance from Government $2,000 annual fee per full time employee (minus first 30 employees) calculated monthly 35 Employer Offers Coverage, but Is unaffordable, employee contributions for self-only coverage exceed 9.5% of the employee's W-2 income; or Fails to provide minimum value (Plan's share of the total allowed costs of benefits is less than 60% of actuarial value) Employer pays $3000 per head (or $2,000 x all Employees minus first 30 whichever is less)

36 Example: Measuring Your Workforce Using Safe Harbor Rules 36 In 2013, A1 Cooling, Inc. offers a health plan to its full-time employees. In 2013, A1 Cooling, Inc. employs 1,674 employees In January 2013, A1 Cooling, Inc. implements the Safe Harbor Rules in order to measure its workforce to determine who is full-time in order to prepare for A1 Cooling, Inc. implements a 12 month measurement period. Employees who work full-time (30 hours per week) will be treated as full-time during a subsequent Stability period. A1 Cooling, Inc. determines that 1,462 employees work less than full-time during this time (fewer than 1,560 hours or 30 hours per week x 52 weeks). A1 Cooling, Inc. determines that 212 employees are full-time during this time period. Under the Safe Harbor Rules A1 Cooling, Inc. offers minimum essential coverage to those full-time employees and dependents in 2014 during its subsequent 12 month stability period, regardless of the number of hours worked by the full-time employees measured in 2013.

37 Example of Penalty: Failing to Offer Coverage In 2014 A1 Cooling, Inc., does not offer a health plan. A1 Cooling, Inc. employs 212 full-time employees. If full time employee goes to the health insurance exchange and receives subsidy A1 Cooling, Inc. penalized $2,000 x each full time employee minus first 30 assessed monthly A1 Cooling, Inc. subject to penalty in months in which it was large employer January - December Penalty (212-30) x (2,000) = $364,000. Penalty is not tax deductible and indexed to inflation. 37

38 Example of Penalty: Offering Coverage that is Unaffordable or Does Not Provide Minimum Value In 2014 A1 Cooling, Inc., offers a health plan to its 212 full-time employees. Assume Cost of plan per employee per month is $ ($2,400 per year). At least 10 employees annual W-2 income is $23, employees opt out of coverage & apply to health insurance exchange The employees apply for and receive a tax subsidy because the self-only coverage offered by A1 Cooling, Inc., exceeded 9.5% of each individual s annual W-2 income. Here the employees cost is 10.4% of their W-2 income. The maximum penalty for A1 Cooling, Inc. is capped at $30,000 or $3,000/employee assessed monthly. 38

39 Penalty Considerations Offer to full-time employees and dependents No requirement to pay 100% of cost of coverage Penalty is triggered by employee receiving subsidy Employees that qualify for Medicaid do not receive subsidy nor trigger penalty On January 1, 2014 Americans under age 65 w/incomes less than 133 percent of the federal poverty level ($14,856 for an individual and $30,657 for a family of four in 2012) who are not pregnant and not otherwise eligible for Medicaid, will be eligible to enroll in Medicaid. New coverage ends the long-time exclusion of low-income adults from Medicaid coverage. States will receive 100 percent federal funding for the first three years to support this expanded coverage, phasing down to no less than 90 percent federal funding in subsequent years. States that have already expanded coverage to this group will also receive additional federal support. Arizona is participating in Medicaid Expansion Program Affordability is calculated based on self-only coverage for employee Tie employee contribution to percentage of wages (e.g. no more than 9.5%) Avoid administrative hurdle of measuring each employee 39

40 Health Care Reform Timeline 40 ACA enacted March 23, 2010 SCOTUS Decision on ACA 06/28/12 FSA Contributions Capped/Indexed to inflation W-2 Reporting begins Jan 1, 2013 for tax year 2012 (only applies to plans that file at least 250 W-2s in 2011) Cadillac Tax: Excise Tax on excess of high cost insurance plans Lifetime Dollar Limits Prohibition: Essential Benefits (as plans renew after 9/23/10) Annual Dollar Limits Restricted: Essential Benefits (as plans renew after 9/23/10) Dependent Child Coverage until age 26 Pre-existing condition exclusions prohibited for enrollees under 19. Over the Counter Drugs (OTC) ineligible for FSA, HSA, & HRA Annual Limits Prohibited: Essential Benefits Prohibition on Pre-existing conditions provisions for all participants Automatic enrollment (only after regs issued in 2014) State Insurance Exchanges Active Employer & Individual Mandates Effective Low Income premium subsidy established for Exchanges 40

41 Resources Questions? Today s presentation slides and recording will be available on our website: For questions regarding Health Care Reform or to schedule a consultation for your business, please contact your account manager or Pinnacle at or info@pinnacletpa.com 41