9/24/2013
Coverage and Free Rider Penalty Reporting and Exchanges 101
This is only a brief summary that reflects our current understanding of select provisions of the law, often in the absence of regulations. All of the interpretations contained herein are subject to change as the appropriate agencies publish additional guidance.
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Overview & Agenda
• Reporting Requirements
• Health Insurance Exchanges 101
• Disclaimers
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Minimum Essential Coverage Reporting
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Minimum Essential Coverage
Reporting
• Who?
– Insured Plans – Insurer
– Self‐funded Plans – Depends on type of plan, e.g. single employer = the employer
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Minimum Essential Coverage
Reporting (Cont’d)
• What?
– To the IRS
• Name, Address, and Employer Identification Number of the reporting entity
• Name, Address, and Tax Identification Number (or DOB) of each individual covered under the policy or program
• Months of coverage
• Any other information specified in forms or instructions ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Minimum Essential Coverage
Reporting (Cont’d)
• What?
– To Each Responsible Individual
• IRS Information
• Contact information for the entity required to file
• Policy number, if applicable
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Minimum Essential Coverage
Reporting (Cont’d)
• To Whom?
– IRS
– Each covered individual, but not separately for spouse/dependent(s)
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Minimum Essential Coverage
Reporting (Cont’d)
• When?
– To the IRS: February 28 (or March 31 if filed electronically)
– To Individuals: January 31
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
4
9/24/2013
Minimum Essential Coverage
Reporting (Cont’d)
• How?
– IRS: Electronically (generally)
– Responsible individuals (electronically, but only with consent)
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Free Rider Penalty Reporting
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
5
9/24/2013
Free Rider Penalty Reporting
• Who?
– Employers subject to the Free Rider Penalty (more than 50 FTEs)
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Free Rider Penalty Reporting (Cont’d)
• What?
– Name, Date and Employer Identification Number
– Name and Telephone Number of the applicable large employer’s contact person
– Calendar Year for which the information is reported
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Free Rider Penalty Reporting (Cont’d)
• What? (cont’d)
– Certification whether the employer provided its full‐
time employees (and dependents) an opportunity to enroll in minimum essential coverage, by calendar month
– Months during the calendar year for which coverage under the plan was available
– Each full‐time employee’s share of the lowest cost monthly premium (self‐only) for coverage providing minimum value
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Free Rider Penalty Reporting (Cont’d)
• What? (cont’d)
– Number of full‐time employees for each month during the calendar year
– Name, Address, and Taxpayer Identification Number for each full‐time employee during the calendar year and the months, if any, during which the employee was covered under the plan ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Free Rider Penalty Reporting (Cont’d)
• To Whom?
– IRS
– Employees listed in the IRS report
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Free Rider Penalty Reporting (Cont’d)
• When?
– To the IRS: February 28 (March 31 if filed electronically)
– To Individuals: January 31
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
8
9/24/2013
Free Rider Penalty Reporting (Cont’d)
• How?
– IRS: Electronically (generally)
– Responsible Individuals (electronically, but only with consent)
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Exchanges 101
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Exchanges 101
• What is an Exchange?
– A marketplace to buy individual coverage and small groups to buy private coverage
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Exchanges 101 (Cont’d)
• Who Runs Them?
– State (18)
– Federal (26)
– Partnership (7)
– Kaiser Family Foundation Exchange Updates
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Exchanges 101 (Cont’d)
• Small Business Health Options Program
– Available to small employers • Employed no more than 100 employees on business days during the preceding calendar year
• Federally facilitated Exchange 50 employees, 2016 100 employees, 2017+ may open to large employers • Use 4980H to determine size
• Employer elects contribution amount, but employees can elect coverage option
– Delayed in the FFE until 2015
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Exchanges 101 (Cont’d)
• What Coverage is Available?
– Bronze, silver, gold and platinum options
– Must cover essential health benefits and certain preventive services at 100%
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Exchanges 101 (Cont’d)
• Who is Eligible for Coverage?
– Anyone, except illegally present or incarcerated
– No one can be denied coverage
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Exchanges 101 (Cont’d)
• How Does Someone Apply?
– Online, in person, on the phone
– Navigators to help with the process
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
12
9/24/2013
Exchanges 101 (Cont’d)
• When Does Someone Apply?
– Open Enrollment: October 1, 2013 – March 31, 2014 (first year, with a shorter one in subsequent years)
– Qualifying Life Events: e.g. marriage, divorce, moving, losing employer coverage
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Exchanges 101 (Cont’d)
• When Is Coverage Effective?
– Coverage is effective January 1, 2014 (if timely application is received)
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Exchanges 101 (Cont’d)
• Are Subsidies Available?
– Premium subsidies: up to 400% of FPL
– Cost sharing subsidies: up to 250% of FPL
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Exchanges 101 (Cont’d)
• What is adequate and affordable coverage?
– Adequate: 60% actuarial value
– Affordable: Employee‐only coverage is less than 9.5% MAGI
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Exchanges 101 (Cont’d)
• How will an Exchange determine affordability?
– 2014: self‐attestation
– 2015+: TBD, examples include national database
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Exchanges 101 (Cont’d)
• How will the subsidies work?
– Advanced, refundable tax credit
– Paid directly to the insurer or may receive when taxes are filed
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
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9/24/2013
Exchanges 101 (Cont’d)
• Will employers be informed of subsidies?
– Yes: Exchange notification, may appeal
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Health Care Reform Made Easy
• AFAS is ready to assist:
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ESB‐3049‐0913
HCReducation.com
http://benefitsblog.americanfidelity.com
VIP emails and monthly webinars
Health Care Reform consulting (packages, retainer arrangements, and custom solutions) Copyright 2013 American Fidelity Assurance
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9/24/2013
Health Care Reform Made Easy
• AFAS is ready to assist (cont'd):
– Time management software to assist with the Free Rider Penalty – Variable hour employee billing
– Notice compliance support and fulfillment
– Resources to help communicate plan changes to employees
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
Thank you!
This is only a brief summary that reflects our current understanding of select provisions of the law, often in the absence of regulations. All of the interpretations contained herein are subject to change as the appropriate agencies publish additional guidance.
ESB‐3049‐0913
Copyright 2013 American Fidelity Assurance
17