Obamacare: It will take you breath away! 2014 CPE EXPO Presented By: Richard Nevins, CPA (713) Midterm Impact Marijuana legalization wins in Oregon, Alaska and D.C. but not in Florida. Alaska, Arkansas, Nebraska and South Dakota voted for higher minimum wages. Republicans should pass some kind of meaningful immigration reform. Republicans should pass through a 3 percent to 5 percent corporate tax cut. Trouble In Paradise? Supreme Court Ruling Myths or Facts about Obamacare Obamacare and the Affordable Care Act are different. Most Americans want to repeal A.C.A. You have to use the Health Insurance Marketplace My employer has to cover me You can keep your same plan. Myths or Facts about Obamacare Cont. You can keep your same doctor Obamacare means higher premium Obamacare death panels Obamacare implants a CHIP when you get health care. What Does the ACA Exclude? Weight loss surgery Adult eye care Private nursing Infertility treatment Routine foot care Acupuncture Weight loss programs Adult dental services Cosmetic Surgery Long term Care Pros and Cons of the A.C.A. The Pros: - Uninsured get access to insurance -Cost is low for low paying people -Cant be dropped or denied coverage. -Small business tax credits - Young adults can stay on parents insurance to age 26. -Preventive coverage at 100% Pros and Cons of the A.C.A. Cont. The Cons -New taxes (3.5%) -Individual Mandate -Claims costs could bankrupt insurance carriers. -Employer Mandate -Premium increase due to covering additional services. -Does it really address the cost of care? Individual Mandate Must buy insurance or pay a penalty % or $ % or $ % or $695 Filing Threshold $20, $20,600 (est.) $20,900 (est.) Notice of Exchange Must provide all employees a written notice of the exchange. Network Issues Benefits Subsidy Changes Eliminate annual limits Maximum out of pocket expenses may not exceed $6,350 / $12,700. For 2015, the limits are $6,600/ $13,200 Waiting period cannot exceed 90 days Cannot impose pre-existing exclusions Coverage for clinical trials Carry over $500 for F.S.A. Discrimination testing for fully insured delayed. Differences in Essential Health Benefits Ten essential health benefits for individual and small group (2-50) Options vary by state Decision is the states in 2014 and 2015 Findings Discovered -25 states require plans to cover nutrion counseling - 26 states require to treat autism - 45 states require chiropractic care - 5 states require coverage for weight loss programs The government may create a national benchmark plan in 2016. Employer Mandate and Penalties For employers with 100 or more F.T.E, starting in For employers with F.T.Es, starting in 2016 Employer Mandate and Penalties Cont. Size of group is based on the average size for the prior calendar year. Part-time employees are included in the calculation. Penalty for 2015 is $2,000 for not offering health coverage, not counting the first 80 F.T.Es. Coverage must be offered to at least 70% of its full-time employees. If the coverage is unaffordable or does not provide minimum value, the fine is $3,000 per employee. Employee must receive subsidy on Exchange to trigger penalty. Employer Mandate and Penalties Cont. Pay or Play Calculation Administrative Measurement Period Stability Fees and Taxes Reinsurance Fee -Annual fee intended to lessen the impact of adverse selection in the individual market. -Impacts both self- insured and fully- insured -Estimated cost impact in 2015 is $44. -Through 2016 Fee and Taxes Cont. Health Insurance Industry Fee - Helps fund PPACA Implementation - Based on each insurers share of the taxable health insurance premium base. -Paid by insurers (fully insured) 2 to 2.5% of the premium to 4% of premium - Applies to medical and stand alone dental and vision - Unlimited number of years Fees and Taxes Comparative Effectiveness Research Fee - Conducts research to compare which of two or more treatments is more effective. - Insurer pays and builds into rates. - For plan years ending on or after 10/1/14 and before 10/1/15, the fee is $ Self insured plans, employer calculates and pays - Through 2019 Reporting What is the purpose of reporting this information? - Compare what individuals put on their tax return as to whether they have insurance or not. - IRS can double check whether people who were granted a subsidy are really entitled to the subsidy. - IRS can enforce the employer Mandate. - Form 6055 for self-funded firms. - Form 6056 for firms with 50 or more full-time employees. The Reporting Package Employers with 50 or more F.T.E. must provide the IRS and their employees information about their coverage in Due in Information will include - certification that F.T.E.s had a chance to enroll - Number of FTEs each month - FTEs share of the lowest cost premium - Name and social for each F.T.E. Section 6055 for self insured and section 6056 for fully insured. Discrimination Testing For fully- insured plans Delayed Automatic Enrollment Impacts firms with at least 200 employees States that employers automatically enroll new full-time employees No implementation regulations issued so this is delayed. Flexible Spending Account New annual limit for health FSAs in 2015in 2015 is $2,550 The $500 carryover does not count against the total Cant do carryover and 2.5 month extension Cadillac Tax Permanent annual tax starting in 2018 on employers that provide high-cost benefits through an employer- sponsored group health plan. The tax is 40% of the cost of plans that exceed the threshold amount. Individual is $10,200 and family is $27,500 annually. For pre-65 retirees and individual in high- risk professions, the threshold amounts are $11,500 and $30,950 Includes employer and employee contributions to FSAs, HRAs and H S As. Cadillac Tax Cont. The purpose of the tax is to provide $80 billion over the next 10 years to help finance the exposition of health coverage. The tax is not deductible Affects both insured and self-funded group plans Excludes stand-alone dental and vision, accident coverage, disability benefits and long-term care. Time is now to develop a strategy to avoid the per employee tax. Decision Time In response to increased healthcare costs, we: Pass increase to employees Reduce benefits Absorb the Costs Increase our prices to customers Implement a wellness benefit Adopt a CDHP Reduce number of full-time employees Reduce contributions to retirement programs Decision Time I plan to keep coverage because: Retain current employees Recruit new employees Maintain employee satisfaction Maintain employee productivity Avoid paying penalties Maintain tax benefits Decision Time I plan to discontinue coverage because: Ability to send employees to the Exchange. Cost to provide coverage is too high Other organizations in our area discontinued coverage Other organizations in our industry discontinued coverage. What are Carriers doing? E.P.Os In-network only Self-funded down to 20 employees H.S.A.s Triple option in one plan Offering more than one benefit plan Generic enforced drug card, pre-authorization, step- therapy, mandatory mail order. Changes in ancillary products