The Affordable Care Act (aka Obamacare ) What s really in the law? How does the ACA affect employers? What s next?

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1 Sheldon Weisgrau Presentation to: KSGFOA October 17, 2013 Introduction Health care and health insurance Why do we need health reform? The Affordable Care Act (aka Obamacare ) What s really in the law? How does the ACA affect employers? What s next? Q&A Health Reform Resource Project 2 1

2 Health Reform Resource Project 3 Assist in public education and stakeholder engagement related to health reform Provide technical assistance to advocacy organizations and other stakeholders Assist Kansas entities in securing grants and programs available under the Affordable Care Act (ACA) Health Reform Resource Project 4 2

3 Supported by Kansas Grantmakers in Health: Kansas Health Foundation Health Care Foundation of Greater Kansas City REACH Healthcare Foundation Sunflower Foundation: Health Care for Kansans United Methodist Health Ministry Fund Wyandotte Health Foundation Health Reform Resource Project 5 Health Reform Resource Project 6 3

4 Access 48 million uninsured in U.S. (18% of pop < age 65) 360,000 uninsured in Kansas (14% of pop <65) Millions more underinsured Employment-based health insurance declining Health Reform Resource Project 7 Access Quality Inconsistent Disparities Infections, medical errors, patients harmed Health Reform Resource Project 8 4

5 Access Quality Cost Highest in the world Increasing faster than salaries and inflation Main driver of long-term federal budget deficits Health Reform Resource Project 9 200% 180% 160% Workers Share Premiums 140% 120% 100% 80% 60% 40% 20% 0% Earnings Inflation Source: Kaiser Family Foundation, 2013 Health Reform Resource Project 10 5

6 Health Reform Resource Project pages, 10 titles 1. Access to private health insurance 2. Expanded Medicaid coverage 3. Medicare reform 4. Wellness and prevention 5. Health care workforce 6. Fraud and abuse 7. Access to drugs and biologics 8. Voluntary long-term care insurance (CLASS) 9. Revenue measures 10. Manager s amendment and reconciliation Health Reform Resource Project 12 6

7 Health Reform Resource Project 13 Make better health insurance coverage more available and affordable for legal residents Reform health care delivery and financing to provide better quality and outcomes, more cost effective care Health Reform Resource Project 14 7

8 What it does Builds on the existing system of coverage What it doesn t do Does not create government-controlled or socialized health care Does not create death panels Does not turn the system over to private insurance companies Does not eliminate (or make big changes to) Medicare Health Reform Resource Project 15 Extends health insurance coverage to million uninsured Expands the Medicaid program Authorizes Medicare financing and delivery reform Restructures markets for individual and small group insurance Health Insurance Marketplace (and SHOP) Health Reform Resource Project 16 8

9 Extends health insurance coverage to million uninsured Prohibits insurers from denying coverage to those with pre-existing conditions (guaranteed issue) or charging them more (community rating) Mandates that most people maintain insurance coverage Provides tax credits to help individuals and small businesses purchase insurance Health Reform Resource Project 17 Health Reform Resource Project 18 9

10 No insurance requirements Tax incentives for employers that provide insurance < 25 employees Avg annual wages < $50,000/year Employer pays at least 50% of premium cost Tax credit up to 50% of premiums for policies purchased in SHOP Marketplace (35% for nonprofits) Health Reform Resource Project 19 Health Reform Resource Project 20 10

11 Large employers are not required to provide insurance coverage BUT... They may be subject to penalty if: Health Reform Resource Project 21 Large employer may be subject to penalty if: Does not offer coverage to full-time employees and their dependents OR Offers coverage that does not meet affordability or minimum value standards AND At least one full-time employee receives a tax credit to purchase insurance in the Marketplace Health Reform Resource Project 22 11

12 Who does it apply to? Employers with 50 or more full-time and full-time equivalent employees How do we measure full-time employees and FTEs? Full-time employee = Average of 30+ hours/week over course of a month Part-time FTEs: Add hours worked per month, divide by 120 Safe harbors for seasonal and variable hour employees Health Reform Resource Project 23 What is affordable coverage? Does not exceed 9.5% of employee s W-2 income for the tax year (for individual plan) What is minimum value? Covers at least 60% of costs Health Reform Resource Project 24 12

13 If employer does not offer coverage, penalty is $2,000 per full-time employee (minus the first 30 full-time employees) If at least one full-time employee receives a tax credit to purchase in the Marketplace Health Reform Resource Project 25 If employer does not offer coverage, penalty is $2,000 per full-time employee (minus the first 30 full-time employees) Example: Employer with 75 full-time employees: = x $2,000 = $90,000 ($7,500 per month) Health Reform Resource Project 26 13

14 If employer offers coverage, but it is unaffordable or does not meet minimum value standards, penalty is $3,000 for each affected full-time employee For those employees that receive a tax credit to purchase in the Marketplace Health Reform Resource Project 27 If employer offers coverage, but it is unaffordable or does not meet minimum value standards, penalty is $3,000 for each affected full-time employee Example: Coverage is unaffordable for 10 employees 10 x $3,000 = $30,000 ($2,500 per month) Health Reform Resource Project 28 14

15 Multiple businesses with same ownership covered as a single entity Penalties are not deductible Penalties are indexed to inflation after 2014 Health Reform Resource Project Health Reform Resource Project 30 15

16 Health Reform Resource Project 31 Established by each state by Oct 1, 2013 Administered by federal govt if state opts out For individual and small group markets Provides web-based one-stop shopping Pooling mechanism for individuals and small businesses Plans must offer essential health benefits package Health Reform Resource Project 32 16

17 1. Ambulatory care services 2. Emergency services 3. Hospitalization 4. Maternity and newborn care 5. Mental health and substance abuse services 6. Prescription drugs 7. Rehabilitative and habilitative services and devices 8. Laboratory services 9. Preventive and wellness services and chronic disease management 10. Pediatric services, including oral and vision care Health Reform Resource Project 33 Qualify if household income is 100%-400% of Fed Poverty Level and purchase in Marketplace and no affordable employer offer Household Size 2013 Federal Poverty Guidelines 100% 400% 1 $11,490 $45,960 2 $15,510 $62,040 3 $19,530 $78,120 4 $23,550 $94,200 5 $27,570 $110,280 6 $31,590 $126,360 Businesses qualify if they meet size and salary requirements Most Kansans who would have been covered by Medicaid expansion will be too poor to qualify for tax credits Health Reform Resource Project 34 17

18 Health Reform Resource Project 35 Toll-free hotline Agents/brokers Navigators Certified Application Counselors Kansas Insurance Department Health Reform Resource Project 36 18

19 Health Reform Resource Project 37 Marketplace opens October 1, 2013 Coverage begins January 1, Individual mandate January 1, 2014 Employer responsibilities enforcement delayed until 2015 Medicaid expansion OUTREACH / EDUCATION / ENROLLMENT get the facts. get informed. get insured Health Reform Resource Project 38 19

20 Sheldon Weisgrau, Director Health Reform Resource Project 1129 S. Kansas Avenue, Suite B Topeka, KS HealthReformResource@gmail.com Health Reform Resource Project 39 20