Spring Health Care Reform Updates - Week of 8/11- 8/17
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Transcript of Spring Health Care Reform Updates - Week of 8/11- 8/17
Proprietary and Confidential©Copyright 2014 Spring Consulting Group, LLC. All rights reserved
LinkedIn: spring-consulting-group-llcTwitter: @SpringsInsight
What You Need to Know About the ACAWeek of August 11-17, 2014
Presented by: George Gonser, CEO Spring Insurance Group
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Increase to Employer & Individual Mandate Percentages for 2015
Percentage will increase from 9.5% to 9.56% as mandate starts to be phased in If individual spends more than 9.56% on health insurance plan (lowest
cost plan and based on individual plan), it is considered “unaffordable” and they may be eligible for subsidies through exchanges
Employers would be out of compliance and would be forced to pay penalties as a result
Applicable to companies with 50 or more insured’s
IRS also adjusted individual mandate (threshold of household income that cannot be exceeded for a plan to be considered affordable) from 8% to 8.05%
News came out from the Internal Revenue Service (IRS) concerning the threshold for determining whether an employer has offered “affordable
coverage” to an employee
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Current Timetable for Employer Mandate
Employers with 50-99 employees:
• Must offer affordable health plans to at least 95% of full-time employees by 1/1/16
Employers with 100+ employees:
• Must offer affordable health plans to at least 70% of full-time employees by 1/1/15
• Must offer affordable health plans to at least 95% of full-time employees by 1/1/16
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Significantly More People Qualify for Individual Mandate Exemption than Expected
Individual mandate exemptions granted to uninsured individuals so that they do not have to pay penalty under ACA Estimates for non-exempt individuals by 2016:
― Original estimate: 7 million
― New estimate: 4 million
Penalties for non-exempt, uninsured individuals:― 2014: $95/adult or 1% of taxable income
― 2015: $325/adult or 2% of taxable income
― 2016: $695/adult or 2.5% of taxable income
Congressional Budget Office (CBO) estimates new shortfall at $3 billion
Increase in exemptions is greatly to blame for decrease in non-exempt individuals
Premiums are likely to rise in order to make up difference.