The Health Care Reform Act - PowerPoint PPT Presentation

About This Presentation
Title:

The Health Care Reform Act

Description:

The Health Care Reform Act What You Need To Know James P. Gelfand, Director of Health Policy THE PENALTY FOR NON-OFFERING EMPLOYERS WAS ORIGINALLY ONLY $750 per ... – PowerPoint PPT presentation

Number of Views:246
Avg rating:3.0/5.0
Slides: 21
Provided by: miyo8
Category:

less

Transcript and Presenter's Notes

Title: The Health Care Reform Act


1
The Health Care Reform Act
  • What You Need To Know
  • James P. Gelfand, Director of Health Policy

2
Learning Objectives
  • Identify key provisions of the legislation that
    will affect your organization
  • Determine the course of action needed to comply
    with the new regulations
  • Understand the implications of non-compliance
    with the regulations
  • Determine the financial implications of the new
    law

3
What the Chamber supported
  • Bending the cost curve
  • A focus on wellness and prevention
  • Insurance market reforms coupled with individual
    responsibility
  • Payment reforms (addressing cost-shifting P4P)
  • Medical liability reform
  • Health IT
  • Improved affordability subsidies
  • Comparative effectiveness research

4
The Patient Protection and Affordable Care of
2010(H.R. 3590)
  • Signed into law (P.L. 111-148) on Mar. 22, 2010
  • Extends health insurance coverage to about 32
    million currently uninsured.
  • Subsidies provides subsidies for up to 400 of
    FPL
  • Medicaid Expansion Up to 133FPL (14,000
    ind./29,000 family)
  • Individual Mandate Starting 2014, with penalty
    of 695 ind./2,915 family
  • Employer Mandate (Free rider) Penalty for lack
    of affordable coverage if 50 or more employees
  • Creates State Insurance Exchanges Available in
    2014, state marketplace for purchasing insurance

5
The Patient Protection and Affordable Care of
2010(H.R. 3590) continued
  • Insurance Reforms
  • No rescissions (unless fraud 2010)
  • Dependents covered until age 26 (2010)
  • No pre-existing condition exclusions (2010 for
    children 2014 for everyone)
  • No lifetime limits (2010) or annual limits (2014
    for group plans)
  • Requires preventative coverage (2010)
  • Guarantee Issue and rating limitations (2014)
  • Small Employer Credits Up to 50 of employers
    contributions (up to 5 yrs.)
  • Minimum Benefits Package All health plans
    offered through exchanges to provide the
    essential benefits

6
Cost ....
  • According to the Congressional Budget Office
    (CBO)
  • Cost 938 billion/10 years
  • Deficit reduction 124 billion/1st-10years,
    1.2 trillion/2nd-10 years
  • Doc Fix will cost over 275 billion
  • 569 billion in new taxes and tax increases
  • 528 billion total cuts to Medicare
  • Creates 16,500 new jobs for the IRS
  • Billions more in spending authorized, but not
    appropriated.

7
Pay Fors 569 billion/10 years
  • 10 excise tax on tanning services 2.7
    billion/10 (2010)
  • Modification of tax treatment in certain health
    organizations 400 million/10 (2010)
  • Codify economic substance doctrine 4.5
    billion/10 (2010)
  • Repeal of black liquor credit 23.6
    billion/10 (2011)
  • Conforming definitions for medical expenses
    5.0 billion/10 (2011)
  • Additional tax on distributions from HSAs and
    MSAs other expenses 1.4 billion/10 (2011)
  • Excise tax on manufacturers and importers of
    drugs 27.0 billion/10 (2011)
  • Corporate reporting requirements (1099
    issue) 17.1 billion/10 (2012)
  • Limit flexible spending in cafeteria plans to
    2,500 13 billion/10 (2013)
  • Excise tax on medical device manufacturers
    20 billion/10 (2013)
  • Medicare tax on HI earners 210.2 billion/10
    (2013)
  • Eliminate Part D subsidy deduction 4.5
    billion/10 (2013)
  • Limitations on executive compensation 600
    million/10 (2013)
  • 10 medical expense deduction 15.2
    billion/10 (2013)
  • Excise tax on insurance providers 60.1
    billion/10 (2014)
  • Free Rider penalties 52 billion/10 (2014)
  • Individual Mandate penalties 17
    billion/10 (2014)
  • 40 excise tax on Cadillac plans 32
    billion/10 (2018)
  • Effects on coverage provisions in revenue 46
    billion/10 (Misc.)

8
1099 reporting requirement
  • Burdensome reporting requirement that increases
    the cost of doing business
  • Section 9006 requirement Submit a separate 1099
    form for every single business-to-business
    transaction in aggregate of 600 each year
    GOODS and SERVICES
  • Could affect over 40 million businesses
  • House bill H.R. 5141 repeal Section 9006
    (Rep. Lungren) / Senate bill S. 3578 (Sen.
    Johanns)

9
Implementation What happens and when?
  • Implementation will be a 10 year process
  • Immediate changes 2010-2011
  • Longer term changes 2012-2013
  • Most significant changes 2014-2018 and beyond
  • Individual Mandate
  • Employer Mandate
  • Subsidies, Exchanges, Medicaid expansion

10
Immediate changes
  • Insurance Reforms 6 months after enactment
  • Prohibits lifetime limits, rescissions, and
    excessive waiting periods
  • Dependents covered until 26
  • No preexisting conditions for under 19 yrs. old
  • First dollar coverage for preventative care
  • Grandfathered plans

11
Small business tax credit
  • Available to small companies and tax exempt
    organizations (2010-2015). 2 Phases.
  • PHASE 1 (2010-2013)
  • Employers with less than 25 full-time employees
    w/ avg. wage of 50,000 or less, and company pays
    min. of 50 of premiums are eligible for tax
    credit up to 35 of premiums.
  • Maximum credit if you have 10 or less full-time
    employees w/ avg. wage of 25,000.
  • Credit claimed on business tax return, not
    employment tax return.
  • PHASE 2 (2014-2015)
  • Same criteria above but only available to
    employers purchasing insurance through the
    exchange.
  • Credit increases up to 50 of premiums but only
    good for 2 years.

12
Important choices for businesses
  • What is the Employer Free Rider Mandate?
  • Offering vs. Non Offering firms
  • Plan cost considerations for those who are
    offering
  • Other issues impacting employers

13
Employer Free Rider Mandate
  • Employers with lt50 Full-Time Equivalents (FTE)
    are exempt from offering.
  • Employers with 50 or more FTE, who do not offer,
    no fines levied if all employees incomes are
    over 400 of FPL (88 K/family of 4).
  • For employers with 50 or more FTE who dont
    offer, if any employee receives tax credit
    through exchange, fine is equal to 2,000 times
    the of employees minus 30. These penalties are
    also incurred if the employer is not offering a
    Qualified health plan.
  • If an employer with 50 or more FTE does offer
    health insurance, but it is not affordable
    (employees share is more than 9.5 of income),
    and the employee goes into exchange (and gets tax
    credit), the penalty is 3,000.

14
Employer Mandate and Penalties
15
Plan considerations for offering
  • Whether you are a self-insured or fully insured,
    may trigger different requirements. Here are
    some items to think about
  • Self-Insuring New requirements for self-insured
    plans Reporting value on W-2, will not need to
    cover essential benefits but will need to meet
    actuarial value (60), will be exempt from new
    tax on insurers, but may be subject to Cadillac
    Tax in 2018
  • Sending Employees to the Exchange Starting
    2017, large employers (over 100) may be able to
    participate in the exchange
  • Grandfathering of plans What changes to your
    plan will trigger loss of grandfather status?

16
Grandfathering rule How it works
  • Plans will lose their grandfather status if they
    choose to make significant changes that reduce
    benefits or increase costs to employees.
  • Changing carriers
  • Any changes in coinsurance that increases
    employee share of medical payments (i.e. Going
    from 80/20 to 70/30)
  • Any increase in a fixed payment amount (except
    co-payments) of more than medical inflation plus
    15 applies to deductible, max out of pocket,
    etc. (since 3/23/10)
  • Any increase in co-payment that exceeds the
    greater of medical inflation plus 15 or 5 plus
    medical inflation (since 3/23/10)
  • Decrease employer contribution to premiums by
    more than 5 below the level (since 3/23/10)
  • Eliminating any benefit for diagnosis or
    treatment or any part of treatment for a
    particular condition (since 3/23/10)

17
Issues impacting employer plans
  • Long-Term Care Starting 2011, employers
    permitted to automatically enroll employees into
    CLASS program
  • Retiree Prescription Drug Plans In 2013,
    employers who receive 28 for RDPs will no
    longer be able to deduct subsidy
  • Compensation Salary vs. Benefits Employers
    may prefer compensation through income rather
    than health benefits.
  • Consumer-Directed Account Options Penalties for
    non-qualified purchases limits on contributions

18
Whats next?
  • Political 2 election cycles before 2014
  • Legislative Ongoing fixes in future Congresses,
    opportunities to improve the law.
  • Regulatory Guidance Rulemaking DOL, HHS,
    IRS
  • Good Faith Compliance/Medical Loss Ratio
  • Legal Legal challenge 21 states have filed
    suit on constitutionality

19
Chamber resources
  • Vote For Business
  • www.voteforbusiness.com
  • Health Care Toolkit
  • www.uschamber.com/chambers/healthcare
  • Primer Critical Employer Issues in the Patient
    Protection and Affordable Care Act
  • http//www.uschamber.com/publications/reports/1004
    26_critical_employer_issues_ppaca.htm
  • Health Reform Impacts
  • www.healthreformimpacts.com

20
  • Questions?
Write a Comment
User Comments (0)
About PowerShow.com