Health Care Reform Update & Strategic Planning

Transcription

1 Health Care Reform Update & Strategic Planning 2014 Producer Trip The Homestead Jason Cogdill Benefits Attorney

2 This Session Update on current developments Update on planning for the employer mandate, including if & when the mandate applies to employers Discussion of health plan coverage & contribution strategies Q&A

3 2014 Overview & Update #1: Health Insurance Marketplaces Coverage first effective 1/1/14; OE ended 3/31 #2: New Coverage Requirements for Group Plans Effective at 2014 renewal #3: Individual Mandate Not delayed; new exemptions apply #4: Employer Mandate Delayed until 2015/2016* #5: Nondiscrimination Rule for Fully Insured Plans Delayed until 2016 or later 3

4 Health Insurance Marketplace Updated timeline of key dates October 1, 2013: Open enrollment began December 23: Last day to enroll for 1/1 effective date January 1, 2014: First day that coverage was effective March 31: Open enrollment ended April 1 Nov. 14: Enrollment only available for those that experience qualified special enrollment event Nov. 15: Open enrollment begins for 2015 January 1, 2015: Coverage first effective for 2014 enrollees February 15, 2015: Open enrollment ends 4

5 Health Insurance Marketplace Enrollment summary White House: Over 8 million enrolled through last week 83% of those enrolled eligible for premium tax credits 74% of enrollees with subsidies selected Silver plans Only 25% of enrollees are ages Reports that only 67-75% of enrollees have paid premium Medicaid/CHIP enrollment still increasing substantially Reports that Medicaid enrollment up over 3 million Over 500k have selected stand-alone dental plans Total enrollment matches early 2013 CBO estimate for enrollment during the initial enrollment period. After 3/31/14, enrollment only allowed for one of 10 special enrollment events 60-day special enrollment period allowed 2015 subsidy eligibility will remain the same based on (1) income & (2) employer coverage availability 5

6 Employer Mandate: The Four Key Questions for 2015 #1: Is the employer subject to the mandate? #2: If so, on what date must the employer comply? #3: What are the potential penalties and how do we protect against them? #4: How many full-time (30+ hour) employees must be offered coverage? 6

7 Does The Mandate Apply in 2015? 2015: 100+ full-time EEs, including equivalents For determining applicable large employer status only, parttime EEs must be counted as equivalents Determination period: For 2015, determination is based on any consecutive 6-month period in 2014 Equivalency calculation: Calculate total hours for all EEs averaging less than 30 hrs, then divide by 120 hours/month Owners, contract (1099), temporary EEs, & seasonal EEs excluded employers have exemption if they can certify 3 criteria IRS 414 controlled group rules apply to entities with common ownership (total EEs combined) Even if controlled group exists, penalty analysis will apply by individual entity If sledgehammer penalty applies, the 30 reduction (80 for 2015) would be divided pro rata based on full-time EEs 7

8 When Does The Mandate Apply? Default effective date: January 1, 2015 For 100+ plans: Calendar year plans: 1/1/15, no exceptions Employers without coverage: 1/1/15, no exceptions Non-calendar year plans: final guidance allows delay to comply on 2015 renewal date if employer meets terms of transition rule. (Ask us for summary of full details) employers have delay until at least 1/1/16 Formal certification of 3 items will be required Under 100 full-time employees plus equivalents in 2014 No material reduction in workforce to get under 100 No termination or substantial reduction in health coverage from 2/10/14 to 12/31/14 8

9 Employer Strategies: 100+ Groups Very few, if any, 100+ employers are dropping group coverage Tax analysis: penalties vs. deductions Most common approach: offering coverage to all 30+ hour EEs coverage that (a) meets minimum value standard, & (b) meets affordability standard. With this approach, employer is fully compliant with mandate & protected from all potential penalties Most popular alternative: offering coverage to all 30+ hour EEs that meets minimum value but is unaffordable technically or practically Several contribution strategies Other alternatives less common & likely just stopgap measures for 2015 Skinny plans; offering coverage to 70% of 30+ hour EEs

10 Employer Strategies: 1-99 Groups Employers maintaining group health coverage Strategies from prior slide are all available Groups have additional flexibility since mandate does not apply until at least 2016 (or later if group is under 50) Only eligibility limitations are written plan terms & carrier contract Minimum value standard applies, but affordability does not Carrier participation rules will be a factor Employers dropping group health coverage Typically only used by under-50 groups with no mandate considerations for 2015 or 2016 Employer may choose to contribute toward individual or Marketplace coverage Must be done on a taxable basis after 2013 guidance Best done as part of defined contribution (flex credit) model

11 Defined Contribution Model Key: Flexibility for Employers & Employees Available to all employers; full range of non-taxable & taxable benefit options Built as part of employer s Section 125 plan flex credits (cafeteria plan credits) Many options, including which specific benefits are available, how credits are ordered/allotted, & any cashoutprovision Keys: Method of enrollment & communication Specific program design Compliance: (1) Section 125 SPD w/ credit details (2) Tax analysis Examples Sample 125 Plan SPD available with various options

12 Additional Resources Your team at The Cason Group Contact us for further details on any ACA or other compliance topic ACA website & LinkedIn page 1-page summary of employer mandate for your team Copy of full employer mandate presentation available 2014 Benefits Compliance Checklist available Further sessions to come in 2014 Monthly webinars resume in May Session on identifying/measuring 30+ hour employees Option of employer mandate workshop for clients/prospects Jason Cogdill: Partner benefits attorney Benefits, ERISA, & ACA advising ProBenefits: Section 125 design, documents, & admin 12

13 Additional Questions? 13