IMPACT OF THE

AFFORDABLE CARE ACT

ON CATHOLIC EMPLOYERS

LASSCA

2

2

Patient Protection & Affordable Care Act

Public Law 111-148

It is not

- Malpractice or tort reform

- Universal health care

coverage

- Single payer system

- Government only health

insurance

- Reform and/or control of

pharmaceutical costs

It is

- No annual or lifetime limits

- Coverage for children until

age 26

- No pre-existing conditions

- Creation of state insurance

exchanges

- Employer mandate

- Individual insurance

mandate

Affordable Care Act

2010-2018

Affordable Care Act

2010-2018

Strategic Decisions for Employers

1. Are employee health benefits part of your overall recruitment/retention?

2. Do you (governance/management) understand general ‘Play or Pay’

concepts?

3. Did you opt for a grandfathered status in 2010?

4. Does your organization offer minimum essential coverage to employees

under an employer plan?

5. Does your plan provide minimum value?

6. Is the plan’s coverage affordable and offered to all full-time employees?

7. Do some of your employees fall below family FPL?

8. Will employees opt for state/federal exchanges?

9. If you choose to ‘Pay’ do you know the real savings/costs?

Strategic Decisions for Catholic

Employers

1. Do you currently provide your employees with a company

sponsored group health plan?

2. Do you have more than 50 employees?

3. Are you an agency of the local Catholic diocese?

4. Are you a 501(c) 3 not-for-profit listed in the Kenedy

Catholic Directory?

5. Do you want to provide a health plan that is consistent with

the teachings of the Catholic Church?

6. Have you completed the self-certification EBSA Form 700?

Employer Requirements & Responsibility

Essential Benefits

Summary of Benefits & Coverage

Employee Protections

Disclosure Requirement

Exchange Notice *

Wellness Program

Employer Mandates

Pay or Play delayed until 1/1/2016 if employer

has less than 100 full time employees

Employer must offer minimum coverage

Only for >50 FTE (30 hpw)

<50 excluded

<25 eligible for subsidies

W-2 reporting requirements (2014)

No mandate for dependent coverage

Employer Mandates

Review your plan – If you offer coverage the

plan must adhere to the following:

* Out of Pocket Maximum (OOPM)

must not exceed $6,350/$12,700

includes all coinsurance & deductibles

includes all copays, office, prescriptions

* Pre-existing conditions removed

* Annual limits removed

* Lifetime limits removed

* Prescription drug co-pays apply to out of pocket max.

(Can be delayed until 1/1/2015 if utilizing third party)

Employer Mandates

• If employer does not offer coverage

- If one employee claims premium credit, then employer subject to

penalty of $2,000 per all FTEs (minus first 30 employees)

• If employer offers unaffordable coverage

- If one employee claims credit, employer subject to penalty equal to

lesser of $3,000 per employee claiming credit or $2,000 per all FTEs

• If employer offers affordable coverage

- Employer must also offer Free Choice Vouchers if employee

contribution is 8-9.5 % of income

Penalty or No Penalty

No Penalty

• Company plan meets

affordability & minimum

coverage requirements

Possible Penalty

• One or more FTEE purchase

coverage through exchange

a) EE contribution is below

9.5% = NO PENALTY

b) Plan doesn’t meet

requirements = PENALTY

$3k per EE

c) EE contribution ≥ 9.5% =

PENALTY $3K per EE

d) One EE gets subsidy on HIX

Employer Fees & Taxes

Reinsurance Fee

Additional Medicare Tax

Patient Centered Outcome Research Fees

Individual & Industry Taxes

Medical Loss Ratio Rebates

Cadillac Plan Tax - 2018

Employer Fees & Taxes

Reinsurance Fee (tax) to insurer

(self insured, report & pay) (11/15/14)

$63 pmpy

Increased Medicare tax .09% +

> 200K

PCORI - research fund

(payment due 7/31/14)

$1 pmpy – For plan

years ending 9/30/13

$2 pmpy for plan years

ending 9/30/14

Fee will index going

forward until it ends in

2019

Fully insured plans Premium tax

Loss Ratios – if carrier exceeds ratio Refund

Employer ‘Play or Pay’

Play • Address new reporting and disclosure responsibilities

• Maintain a viable risk pool

• Adequate stop loss coverage may be unavailable

• Absorb cost-shifting from providers

• Compete with health exchange

• Focus on improving the health of employees and dependents

Why Play?

• Provided as recruitment/retention toll

• Benefits as part of negotiated compensation package

• Employer provided may be more affordable for employee

• Employers looking at cost-benefit may realize savings is

non-existent or not significant

• Employer mandate is indexed to inflation, so penalty will

increase over time

• Employer provided plans coordinated with wellness

program should improve employee productivity

• Employer can define plan and cost vs. having government

set the amount employers contribute

Employer ‘Play or Pay’

Pay • Scale back or terminate the health plan

• Pay the termination penalty which is $2,000 per full-time

employee per year (exclude first 30 employees)

• Provide health reimbursement account (HRA) and flexible

spending account (FSA) so employees can afford exchange

premiums

• Join the exchange

Why Pay?

Employer health costs have spiraled

The cost of penalty is less than benefit costs

Employer wants ‘out’ of providing benefits

Employee compensation base is low

Organization composed of independents

Catholic Issues

ACA requires that all non-grandfathered benefit plans

must provide contraceptives, abortifacient drugs &

sterilization procedures as part of preventive

benefits.

ACA requires covered employee to be free of any cost-

sharing.

ACA forbids these costs becoming part of renewal

underwriting

1. Do you

provide

employees

w/group

health ins

plan?

2. More

than

50

employees

?

3.

Agency

of Local

Catholic

Diocese?

N

O

YES

< 50?

ACA

Exempt

YES YES

N

O

ACA

Exempt

4.

Listed

in

OCD? 5.

Want to

provide

health

plan?

YES N

O

Must abide

by all

aspects of

ACA

6.

EBSA

form 700

completed

?

YES

N

O

Keep

Original – Send

Copy

YE

S

N

O

7.

Contraception

& Sterilization

Benefits

Satisfy

Tenets of

Catholic

Church?

Complete Form

700, Keep Original

Send Copy

N

O

8.

Find non-

ERISA

Church

Plan

Done

YE

S

Catholic Employers’ Options

Self Certification

• Opposes providing contraceptive coverage due to religious objections

• Is organized as a nonprofit entity 501(c) 3

• Publicly holds itself out as a Religious organization

• Self-certifies the above is accurate

• Completes EBSA Form 700

What Market Looks Like in 2013

What Market Will Look Like in 2019

Health Insurance Exchange (HIX)

• Exchange Plan Levels

• Federal Subsidies

• Private Exchanges

Defined Contribution

Resources

US Conference of Catholic Bishops

http://usccb.org/news/2013/13-037

Kaiser Family Foundation

http:www.healthreform.kff.org

Patient Protection & Affordable Care Act

http://www.dol.gov/ebsa/healthreform

Health & Human Services

http:www.healthcare.gov

White House – Health Reform in Action

http:www//whitehouse.gov/healthreform

US Dept of Justice – Defending the Affordable Care Act

http://www.justice.gov/healthcare