How did we get here?
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Health Care Reform Health Care Reform What it means to Employers What it means to Employers Neil Crosby Neil Crosby Director of Sales – Warner Pacific Director of Sales – Warner Pacific Vice President of Public Affairs Vice President of Public Affairs - - CAHU CAHU
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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. How did we get here?. Health Care Cost Increases Health Insurance Rate increases Under Insured Un Insured. The New Law. House Bill - PowerPoint PPT Presentation
Transcript of How did we get here?
Health Care ReformHealth Care Reform
Health Care Reform Health Care Reform What it means to EmployersWhat it means to Employers
Neil CrosbyNeil CrosbyDirector of Sales – Warner PacificDirector of Sales – Warner Pacific
Vice President of Public AffairsVice President of Public Affairs - - CAHUCAHU
How did we get here?How did we get here?
Health Care Cost IncreasesHealth Care Cost Increases
Health Insurance Rate increasesHealth Insurance Rate increases
Under InsuredUnder Insured
Un InsuredUn Insured
The New LawThe New Law
House BillHouse Bill
Senate BillSenate Bill
ReconciliationReconciliation
Like it or not…It’s the LawLike it or not…It’s the Law
The Public wants to The Public wants to know…know…
Service ClubsService Clubs
Chamber of CommerceChamber of Commerce
Business AssociationsBusiness Associations
Employer GroupsEmployer Groups
Employers Want To Employers Want To Know ?Know ?
Effects on me as the Employer?Effects on me as the Employer?
Effects on my Employees?Effects on my Employees?
How much is it going to cost me?How much is it going to cost me?
What do I have to do?What do I have to do?
HR 3590 – An OutlineHR 3590 – An Outline
Details are fewDetails are few
General ProvisionsGeneral Provisions
Basic TimelinesBasic Timelines
All subject to ChangeAll subject to Change
Information PortalsInformation Portals
HHS created an Information PortalHHS created an Information Portal
www.HealthCare.gov
High Risk PoolsHigh Risk Pools
Begins in 2010Begins in 2010
Creates ‘new’ Pool – PCIP – Pre-Existing Creates ‘new’ Pool – PCIP – Pre-Existing Condition Insurance PlanCondition Insurance Plan
Un-Insured for 6 months, Declined Un-Insured for 6 months, Declined Coverage, US CitizenCoverage, US Citizen
Safety Net Program funded by Federal GovSafety Net Program funded by Federal Gov
Grandfathered PlansGrandfathered Plans
Lots of Questions…Lots of Questions…
Plans in place on March 23, 2010Plans in place on March 23, 2010
If my Employer makes even a simple If my Employer makes even a simple change in their plan, does it lose change in their plan, does it lose Grandfathered status…stay tunedGrandfathered status…stay tuned
Employers that had Renewals: April, May, Employers that had Renewals: April, May, JuneJune
Grandfathered DetailsGrandfathered Details Cannot Cut or Reduce Benefits for DiseasesCannot Cut or Reduce Benefits for Diseases Cannot Raise Co-InsuranceCannot Raise Co-Insurance Cannot raise Co-PaymentsCannot raise Co-Payments Cannot raise Deductibles Cannot raise Deductibles Cannot significantly lower ER Contribution: Cannot significantly lower ER Contribution:
5%5% Cannot change InsurersCannot change Insurers
Stay GF: Accept Renewals with No ChangesStay GF: Accept Renewals with No Changes
Why Stay Why Stay Grandfathered ?Grandfathered ?
New Discrimination RulesNew Discrimination Rules Cannot ‘favor’ the more highly Cannot ‘favor’ the more highly
compensatedcompensated Management CarveoutsManagement Carveouts Salaried verses HourlySalaried verses Hourly Management verses Non-ManagementManagement verses Non-Management Better Plan for one ClassBetter Plan for one Class Pay more of the Premium for some Pay more of the Premium for some
EmployeesEmployees
Small Business Tax Small Business Tax CreditsCredits
Begins with the 2010 Tax YearBegins with the 2010 Tax Year
Credit on Business’ Annual Tax Credit on Business’ Annual Tax ReturnReturn
Retro tax credit to January 2010Retro tax credit to January 2010
Tax Credits- Who is Tax Credits- Who is EligibleEligible
Small Business onlySmall Business only
Less than 25 Full Time Employees Less than 25 Full Time Employees (FTE’s)(FTE’s)
Income ‘average’ less than $50K per FTEIncome ‘average’ less than $50K per FTE
Owners & Families excluded from Owners & Families excluded from CalculationCalculation
Tax Credit - GuidelinesTax Credit - Guidelines
Only Premium paid by the Employer is Only Premium paid by the Employer is eligible for the Crediteligible for the Credit
Employer must pay a minimum of 50% Employer must pay a minimum of 50% of EE premium.of EE premium.
Premium counted toward Credit may Premium counted toward Credit may not exceed an ‘average premium’ as not exceed an ‘average premium’ as set by HHS EE: $ 385 Family: $ set by HHS EE: $ 385 Family: $ 913913
Tax Credit - AmountsTax Credit - Amounts 2 – 9 FTE’s2 – 9 FTE’s Income average less than $25K per FTEIncome average less than $25K per FTE Maximum Credit: 35%Maximum Credit: 35%
10 – 24 FTE’s10 – 24 FTE’s Income average less than $50k peer Income average less than $50k peer
FTEFTE Credit varies based on a ‘reduction Credit varies based on a ‘reduction
formula ‘ reducing from the Maximum formula ‘ reducing from the Maximum Credit of 35%Credit of 35%
Tax Credit GoalsTax Credit Goals
Encourage small Employers to Obtain Encourage small Employers to Obtain new coverage, or Retain current new coverage, or Retain current coveragecoverage
On average…On average…
Only 10-15% Qualify for the Tax CreditOnly 10-15% Qualify for the Tax Credit
Only 10-15% is received in a Tax CreditOnly 10-15% is received in a Tax Credit
Expansion of Child Expansion of Child CoverageCoverage
Begins October 1, 2010 and sooner with most CarriersBegins October 1, 2010 and sooner with most Carriers
All Group & Individual Plans, including Self InsuredAll Group & Individual Plans, including Self Insured
Through age 25 up to age 26Through age 25 up to age 26
Currently enrolled DependentsCurrently enrolled Dependents
Not currently enrolled, upon renewal 10-1-10 or laterNot currently enrolled, upon renewal 10-1-10 or later
Dependents may be Married and even live elsewhereDependents may be Married and even live elsewhere
Covers only the Dependent, not Spouse or ChildrenCovers only the Dependent, not Spouse or Children
Maximum Benefit LimitsMaximum Benefit Limits
Begins 2010Begins 2010
Lifetime Benefit Limits will be Lifetime Benefit Limits will be prohibitedprohibited
Various ProvisionsVarious Provisions
Begin 2010Begin 2010
Children not subject to Pre-Existing Children not subject to Pre-Existing Condition Limitations / Guarantee Condition Limitations / Guarantee Issue ? Issue ?
Federal Grant program for small Federal Grant program for small Employers offering Wellness Employers offering Wellness programsprograms
Rate ReviewRate Review
Begins 2010Begins 2010
HHS – May prevent ‘unreasonable’ HHS – May prevent ‘unreasonable’ rate increasesrate increases
Mass as an ExampleMass as an Example No Rate increase allowed in 2010No Rate increase allowed in 2010
6 Carriers denied6 Carriers denied
For Profit / Not for ProfitFor Profit / Not for Profit
Official's email warningOfficial's email warning
Ins Commissioner – “Statements Ins Commissioner – “Statements unprofessional and counterproductive” unprofessional and counterproductive”
2011 Provisions2011 Provisions
Employer sponsored premiums on W-2Employer sponsored premiums on W-2
Prohibits ‘OTC’ drug reimbursements Prohibits ‘OTC’ drug reimbursements from FSA’s, HSA, HRAfrom FSA’s, HSA, HRA
Penalties for HSA non-qualified Penalties for HSA non-qualified withdrawals increase from 10% to 20%withdrawals increase from 10% to 20%
The CLASS ActThe CLASS Act Community Living Assistance Services and Community Living Assistance Services and
Supports Act ( CLASS Act )Supports Act ( CLASS Act ) Creates a new MediCare like program – LTCCreates a new MediCare like program – LTC Begin paying into – 2011Begin paying into – 2011 Won’t start until 2013Won’t start until 2013 5 Year Deductible Period (2018?)5 Year Deductible Period (2018?) Estimated Premium: $240 per month/per Estimated Premium: $240 per month/per
employeeemployee Maximum potential benefit: $75 per dayMaximum potential benefit: $75 per day Must meet Minimum Income 3 of 5 years /No Must meet Minimum Income 3 of 5 years /No
BenefitBenefit
2013 Provisions2013 Provisions New cap on ‘Medical’ FSA contributions New cap on ‘Medical’ FSA contributions
of $2,500 annuallyof $2,500 annually
MediCare Hospital Tax:MediCare Hospital Tax: 1.45% to 2.35% for high income earners1.45% to 2.35% for high income earners New 3.8% Tax on net investment incomeNew 3.8% Tax on net investment income Could even be when selling a HomeCould even be when selling a Home
Both: $200k Indvl / $250K JointBoth: $200k Indvl / $250K Joint
ExchangesExchanges
Begins 2014Begins 2014
Requires States to create an Requires States to create an Exchange for IndividualsExchange for Individuals
A ‘Shop Exchange for small GroupsA ‘Shop Exchange for small Groups
Or may combine into one ExchangeOr may combine into one Exchange
Market ReformsMarket Reforms
Begins 2014 Begins 2014 Guarantee Issue in all marketsGuarantee Issue in all markets No Pre-Ex Condition LimitationsNo Pre-Ex Condition Limitations Waiting Periods may not exceed 90 Waiting Periods may not exceed 90
daysdays Low income subsidies begin – Low income subsidies begin –
Affordability Credits up to 400% of FPLAffordability Credits up to 400% of FPL Redefines Small Group as 1-100Redefines Small Group as 1-100
Rating MethodsRating Methods
Begins 2014Begins 2014
Individual & Group – Strict modified Individual & Group – Strict modified community rating standardscommunity rating standards
Premium variations allowed only for: Premium variations allowed only for: Tobacco(50%), Family, GeographyTobacco(50%), Family, Geography
Premium Ratio: 3/1Premium Ratio: 3/1
Employer MandateEmployer Mandate
Begins 2014Begins 2014 Applies to Employers of 50+Applies to Employers of 50+ Don’t have to provide coverageDon’t have to provide coverage
If even 1 employee receives a subsidy If even 1 employee receives a subsidy and buys coverage through the and buys coverage through the Exchange the Employer will face Exchange the Employer will face penaltiespenalties
$2000 Fine Per Employee$2000 Fine Per Employee
Affordable PlansAffordable Plans
Employer offered plansEmployer offered plans
EE portion exceeds 9.5% of EE portion exceeds 9.5% of household incomehousehold income
$3,000 Fine$3,000 Fine
One third of EmployersOne third of Employers
Employer VouchersEmployer Vouchers Begins 2014Begins 2014
Notification to Employees about the Exchange Notification to Employees about the Exchange begins March 1, 2013.begins March 1, 2013.
Employers must issue Vouchers in the amount Employers must issue Vouchers in the amount they contribute now, to employees who wish to they contribute now, to employees who wish to buy through the Exchangebuy through the Exchange
Only to Employees under 400% of FPLOnly to Employees under 400% of FPL
Employees may ‘keep the change’…Employees may ‘keep the change’…
Auto EnrollmentAuto Enrollment
Begins 2014Begins 2014
Employers with 200+ Employers with 200+
Must ‘enroll’ all new employeesMust ‘enroll’ all new employees
Benefit RequirementsBenefit Requirements
Begins 2014Begins 2014
Limited Benefit packagesLimited Benefit packages
Deductible MaximumDeductible Maximum
Begins 2014Begins 2014
Deductible cannot exceed:Deductible cannot exceed:
Individual: $ 2,000Individual: $ 2,000 Family: $ 4,000Family: $ 4,000
Individual MandateIndividual Mandate
Begins 2014Begins 2014
Requires all American Citizens and Requires all American Citizens and Legal Residents to buy qualified Legal Residents to buy qualified coveragecoverage
Unless…Unless…
Individual Mandate - Individual Mandate - ExclusionsExclusions
Religious objectorsReligious objectors Those not lawfully presentThose not lawfully present Incarcerated individualsIncarcerated individuals Members of Indian TribesMembers of Indian Tribes Taxpayers under 100% of FPLTaxpayers under 100% of FPL Those with No tax liabilityThose with No tax liability Those who were not covered for Those who were not covered for
‘less than 3 months’‘less than 3 months’
Individual PenaltiesIndividual Penalties
2014 Lesser of 1 % of Income or $ 952014 Lesser of 1 % of Income or $ 95
2015 Lesser of 2 % of Income or $ 3252015 Lesser of 2 % of Income or $ 325
2016 Lesser of 2.5% of Income or $ 6952016 Lesser of 2.5% of Income or $ 695
Insurer FeesInsurer Fees
2014 $ 8 Billion2014 $ 8 Billion
2018 $ 14.3 Billion2018 $ 14.3 Billion
Cadillac TaxCadillac Tax
Begins 2018Begins 2018
Meant as a Revenue builderMeant as a Revenue builder
40% Excise Tax40% Excise Tax Individuals: $10,200Individuals: $10,200 Families: $27,500Families: $27,500
Potential ScenariosPotential Scenarios
November 2010 Congressional November 2010 Congressional ElectionsElections
November 2012 Presidential ElectionNovember 2012 Presidential Election
Political Movement within America & Political Movement within America & CaliforniaCalifornia
Rasmussen ReportRasmussen Report
57 % Americans - Favor Repeal57 % Americans - Favor Repeal
59% Americans – Costs will Increase 59% Americans – Costs will Increase due to the Lawdue to the Law
51 % Americans – Law is ‘bad for the 51 % Americans – Law is ‘bad for the Country’Country’
US Chamber of US Chamber of CommerceCommerce
78% of Employers feel their Costs 78% of Employers feel their Costs will Increase due to the new Lawwill Increase due to the new Law
65% Oppose the new Law altogether65% Oppose the new Law altogether
55% Less likely to hire new 55% Less likely to hire new Employees due to the new LawEmployees due to the new Law
NBC / WSJNBC / WSJ
51% of Americans feel it would be 51% of Americans feel it would be acceptable if the November acceptable if the November Elections result in an Appeal of the Elections result in an Appeal of the new Lawnew Law
What happens next…What happens next…
Not much detail yetNot much detail yet
Changes will be madeChanges will be made
New information learned and New information learned and appliedapplied
What you can do…What you can do…
Stay informedStay informed
Read all that you canRead all that you can
Go to meetingsGo to meetings
QuestionsQuestions
Contact information:Contact information:
Neil CrosbyNeil Crosby [email protected] 800-801-2300800-801-2300
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