SEBO s Health Care Reform Handbook

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1 SEBO - for the health of your bottom line SEBO s Health Care Reform Handbook Health care reform is extremely complicated. Sifting through all the regulations and provisions can be time-consuming and confusing. That s why SEBO has created this handbook which provides simple answers to many of the questions you may have regarding health care reform.

2 HEALTH CARE REFORM Can I receive a tax credit for providing insurance to my employees? Yes, if you are a small business (less than 25 employees) or tax-exempt organization that provides health insurance coverage to employees, you may qualify for the small business health care tax credit of up to 35% of the premiums (25% for tax-exempt organizations). Is the average employee wages less than $50,000? Do you pay at least half of the insurance premium for your employees at the single (employee only) rate? If you answered YES to both of those questions you may be able to claim the credit. Visit for more details or contact us today! Will I pay less for my health insurance coverage or more? Unfortunately, this issue will take awhile to shake out and there are different schools of thought here. Groups with under 50 employees will move to modified community rating meaning health insurers will only be able to rate based on demographics, location and number of smokers. Younger, healthier groups will likely pay more while older, sicker groups may see rate reductions. TIMELINE Dependents covered to age 26. No lifetime or annual limits on essential benefits. No pre-existing condition restrictions for children under the age of 19. Tax credits for small employers under 25 employees and an average wage under $50,000 annually. Preventive services covered without members sharing in the cost. Nondiscrimination testing employer plans barred from favoring highly compensated employees. Pre-existing condition insurance plan formed. Reinsurance program available for employers providing insurance to retirees over 55 not eligible for Medicare New restrictions on HSA, FSA and HRA fund use including OTC drugs and the tax for non-medical use increases to 20% Summary of Benefits/Glossary of Terms a simplified 4-page summary of benefits coverage and commonly used terms must be provided to all consumers. Federal wellness grants available for groups with less than 100 employees.

3 Will I be required to buy my insurance from an exchange? No, the requirement is that everyone has health insurance. Health care reform doesn t dictate where individuals or groups must purchase it. An exchange is simply a new place to buy insurance that will be available to individuals and small businesses. SEBO encourages you to utilize a licensed health insurance broker to make sure you re getting the best benefits for you and your employees and to help you find the best rates. An exchange may not offer you the same number of choices and plan designs. Am I required to provide my employees with health insurance? Although businesses aren t specifically required to provide insurance coverage, they could pay hefty penalties if their employees purchase coverage through the exchange Rules established to make payments, enrollment, claims and authorization more simplified. Medicare Part A tax increase from 1.45% to 2.3% for certain individuals. Employers must notify employees of health options, including employer plans, exchanges and subsidies. Reporting for employers who file 250 or more W-2s on the cost of health benefits distributed in 2013 for tax year Pre-tax FSA contribution capped at $2,500. Itemized deductions for unreimbursed medical expenses threshold increases to 10% of adjusted gross income Individual mandate everyone must have coverage or pay a penalty. Employer mandate employers with more than 50 employees must provide affordable coverage (PENALTIES DELAYED UNTIL 2015). Large employer auto enrollment. Exchanges open. No pre-existing condition exclusions. Comprehensive coverage requirement. Limits on deductibles and copayments. Ban on all annual limits. Do you have less than 50 employees? Do you offer health coverage to your employees? If you answered NO to the second question you may be at risk for a penalty beginning in Penalties for employers who don t offer health coverage: $2,000 for each full-time employee after the first 30 $3,000 for each employee who receives a subsidy for health insurance

4 Do individuals have to buy insurance starting in 2014? Yes, every U.S. citizen and legal resident will be required to have health insurance in If you aren t covered through your employer and don t purchase coverage on your own, you ll have to pay a penalty of $95 per adult and $47.50 per child (up to $285 per family) or 1% of family income, whichever is greater, for The penalty will increase to $325 per adult and $ per child (up to $975 per family) or 2% of family income, whichever is greater in Cadillac plan excise tax on employer plans valued at over $10,200 for individuals and $27,500 for families. What can SEBO do to help me and my employees moving forward? We are prepared to review your situation to help you devise a long-term strategy that will be both cost effective and compliant. We provide the same level of service and advice to groups of all sizes. Making the right choice is about more than just a spreadsheet. Our health care reform review will focus on such topics as: Plan design analysis Employer contribution strategies Self-funded alternatives Early renewal strategies Pay or play analysis Defined contribution models Compliance tools HR tools Benchmarking Wellness

5 Your Guide To Health Care Reform This guide includes some basic questions and answers to help employers prepare for the upcoming changes, take advantage of new benefits and tax credits and plan for new requirements. A simple timeline showing what happens when is included, along with an employer checklist. Keep in mind that there are many moving parts to this legislation. Several legal specifics have yet to be worked out. SEBO recommends that you stay in close contact with your benefits consultant team to ensure your business is properly prepared and to answer specific questions regarding potential changes to your benefits plan and available options that can keep your employees and your business healthy, happy and strong. An Employer Checklist: 10 Things to Remember 1. Tax credits for small employers 2. Dependents covered until age Wellness grants for small businesses 4. W-2 reporting of health benefits 5. Informing employees about their health options; plan change notices 6. Grandfathered plans/nondiscrimination 7. Employer pay or play 8. Tax on Cadillac plans 9. Automatic enrollment of employees 10. Breastfeeding accommodations Structured Employee Benefits of Ohio, Inc. 815 Grandview Ave. Suite 200 Columbus, OH P: (800) This handbook is based on a general review of widely available information and does not represent legal advice.