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Health Care Reform Health Care Reform What it means to Employers Neil Crosby Director of Sales

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Health Care Reform Health Care Reform What it means to Employers Neil Crosby Director of Sales Warner Pacific Vice President of Public Affairs - CAHU – PowerPoint PPT presentation

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Title: Health Care Reform Health Care Reform What it means to Employers Neil Crosby Director of Sales


1
Health Care ReformHealth Care Reform What it
means to EmployersNeil CrosbyDirector of
Sales Warner PacificVice President of Public
Affairs - CAHU
2
How did we get here?
  • Health Care Cost Increases
  • Health Insurance Rate increases
  • Under Insured
  • Un Insured

3
The New Law
  • House Bill
  • Senate Bill
  • Reconciliation
  • Like it or notIts the Law

4
The Public wants to know
  • Service Clubs
  • Chamber of Commerce
  • Business Associations
  • Employer Groups

5
Employers Want To Know ?
  • Effects on me as the Employer?
  • Effects on my Employees?
  • How much is it going to cost me?
  • What do I have to do?

6
HR 3590 An Outline
  • Details are few
  • General Provisions
  • Basic Timelines
  • All subject to Change

7
Information Portals
  • HHS created an Information Portal
  • www.HealthCare.gov

8
High Risk Pools
  • Begins in 2010
  • Creates new Pool PCIP Pre-Existing
    Condition Insurance Plan
  • Un-Insured for 6 months, Declined Coverage, US
    Citizen
  • Safety Net Program funded by Federal Gov

9
Grandfathered Plans
  • Lots of Questions
  • Plans in place on March 23, 2010
  • If my Employer makes even a simple change in
    their plan, does it lose Grandfathered
    statusstay tuned
  • Employers that had Renewals April, May, June

10
Grandfathered Details
  • Cannot Cut or Reduce Benefits for Diseases
  • Cannot Raise Co-Insurance
  • Cannot raise Co-Payments
  • Cannot raise Deductibles
  • Cannot significantly lower ER Contribution 5
  • Cannot change Insurers
  • Stay GF Accept Renewals with No Changes

11
Why Stay Grandfathered ?
  • New Discrimination Rules
  • Cannot favor the more highly compensated
  • Management Carveouts
  • Salaried verses Hourly
  • Management verses Non-Management
  • Better Plan for one Class
  • Pay more of the Premium for some Employees

12
Small Business Tax Credits
  • Begins with the 2010 Tax Year
  • Credit on Business Annual Tax Return
  • Retro tax credit to January 2010

13
Tax Credits- Who is Eligible
  • Small Business only
  • Less than 25 Full Time Employees (FTEs)
  • Income average less than 50K per FTE
  • Owners Families excluded from Calculation

14
Tax Credit - Guidelines
  • Only Premium paid by the Employer is eligible for
    the Credit
  • Employer must pay a minimum of 50 of EE premium.
  • Premium counted toward Credit may not exceed an
    average premium as set by HHS EE 385
    Family 913

15
Tax Credit - Amounts
  • 2 9 FTEs
  • Income average less than 25K per FTE
  • Maximum Credit 35
  • 10 24 FTEs
  • Income average less than 50k peer FTE
  • Credit varies based on a reduction formula
    reducing from the Maximum Credit of 35

16
Tax Credit Goals
  • Encourage small Employers to Obtain new coverage,
    or Retain current coverage
  • On average
  • Only 10-15 Qualify for the Tax Credit
  • Only 10-15 is received in a Tax Credit

17
Expansion of Child Coverage
  • Begins October 1, 2010 and sooner with most
    Carriers
  • All Group Individual Plans, including Self
    Insured
  • Through age 25 up to age 26
  • Currently enrolled Dependents
  • Not currently enrolled, upon renewal 10-1-10 or
    later
  • Dependents may be Married and even live elsewhere
  • Covers only the Dependent, not Spouse or Children

18
Maximum Benefit Limits
  • Begins 2010
  • Lifetime Benefit Limits will be prohibited

19
Various Provisions
  • Begin 2010
  • Children not subject to Pre-Existing Condition
    Limitations / Guarantee Issue ?
  • Federal Grant program for small Employers
    offering Wellness programs

20
Rate Review
  • Begins 2010
  • HHS May prevent unreasonable rate increases

21
Mass as an Example
  • No Rate increase allowed in 2010
  • 6 Carriers denied
  • For Profit / Not for Profit
  • Official's email warning
  • Ins Commissioner Statements unprofessional
    and counterproductive

22
2011 Provisions
  • Employer sponsored premiums on W-2
  • Prohibits OTC drug reimbursements from FSAs,
    HSA, HRA
  • Penalties for HSA non-qualified withdrawals
    increase from 10 to 20

23
The CLASS Act
  • Community Living Assistance Services and Supports
    Act ( CLASS Act )
  • Creates a new MediCare like program LTC
  • Begin paying into 2011
  • Wont start until 2013
  • 5 Year Deductible Period (2018?)
  • Estimated Premium 240 per month/per employee
  • Maximum potential benefit 75 per day
  • Must meet Minimum Income 3 of 5 years /No Benefit

24
2013 Provisions
  • New cap on Medical FSA contributions of 2,500
    annually
  • MediCare Hospital Tax
  • 1.45 to 2.35 for high income earners
  • New 3.8 Tax on net investment income
  • Could even be when selling a Home
  • Both 200k Indvl / 250K Joint

25
Exchanges
  • Begins 2014
  • Requires States to create an Exchange for
    Individuals
  • A Shop Exchange for small Groups
  • Or may combine into one Exchange

26
Market Reforms
  • Begins 2014
  • Guarantee Issue in all markets
  • No Pre-Ex Condition Limitations
  • Waiting Periods may not exceed 90 days
  • Low income subsidies begin Affordability
    Credits up to 400 of FPL
  • Redefines Small Group as 1-100

27
Rating Methods
  • Begins 2014
  • Individual Group Strict modified community
    rating standards
  • Premium variations allowed only for
    Tobacco(50), Family, Geography
  • Premium Ratio 3/1

28
Employer Mandate
  • Begins 2014
  • Applies to Employers of 50
  • Dont have to provide coverage
  • If even 1 employee receives a subsidy and buys
    coverage through the Exchange the Employer will
    face penalties
  • 2000 Fine Per Employee

29
Affordable Plans
  • Employer offered plans
  • EE portion exceeds 9.5 of household income
  • 3,000 Fine
  • One third of Employers

30
Employer Vouchers
  • Begins 2014
  • Notification to Employees about the Exchange
    begins March 1, 2013.
  • Employers must issue Vouchers in the amount they
    contribute now, to employees who wish to buy
    through the Exchange
  • Only to Employees under 400 of FPL
  • Employees may keep the change

31
Auto Enrollment
  • Begins 2014
  • Employers with 200
  • Must enroll all new employees

32
Benefit Requirements
  • Begins 2014
  • Limited Benefit packages

33
Deductible Maximum
  • Begins 2014
  • Deductible cannot exceed
  • Individual 2,000
  • Family 4,000

34
Individual Mandate
  • Begins 2014
  • Requires all American Citizens and Legal
    Residents to buy qualified coverage
  • Unless

35
Individual Mandate - Exclusions
  • Religious objectors
  • Those not lawfully present
  • Incarcerated individuals
  • Members of Indian Tribes
  • Taxpayers under 100 of FPL
  • Those with No tax liability
  • Those who were not covered for less than 3
    months

36
Individual Penalties
  • 2014 Lesser of 1 of Income or 95
  • 2015 Lesser of 2 of Income or 325
  • 2016 Lesser of 2.5 of Income or 695

37
Insurer Fees
  • 2014 8 Billion
  • 2018 14.3 Billion

38
Cadillac Tax
  • Begins 2018
  • Meant as a Revenue builder
  • 40 Excise Tax
  • Individuals 10,200
  • Families 27,500

39
Potential Scenarios
  • November 2010 Congressional Elections
  • November 2012 Presidential Election
  • Political Movement within America California

40
Rasmussen Report
  • 57 Americans - Favor Repeal
  • 59 Americans Costs will Increase due to the
    Law
  • 51 Americans Law is bad for the Country

41
US Chamber of Commerce
  • 78 of Employers feel their Costs will Increase
    due to the new Law
  • 65 Oppose the new Law altogether
  • 55 Less likely to hire new Employees due to the
    new Law

42
NBC / WSJ
  • 51 of Americans feel it would be acceptable if
    the November Elections result in an Appeal of the
    new Law

43
What happens next
  • Not much detail yet
  • Changes will be made
  • New information learned and applied

44
What you can do
  • Stay informed
  • Read all that you can
  • Go to meetings

45
Questions
  • Contact information
  • Neil Crosby
  • NeilC_at_WarnerPacific.com
  • 800-801-2300
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