Affordable Care Act
(ACA) 2013
410 Delaware Ave Wilmington, DE 19801
302-654-8823
[email protected]
www.AllenInsurance.com
January 2013
Affordable Care Act
(ACA) 2013
January 2013
Allen Insurance Group
• Independent Insurance Agency and Benefits
Broker, since 1932
• Servicing clients in our tri state community
• Third generation agency
• Provides coverage for Individuals, Businesses
and Employees.
January 2013
Today, we will briefly cover:
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January 2013
History of Healthcare Reform
Individual Mandates
How To Get Insurance
Penalties and Taxes
What do you do next
Healthcare Reform
It all began…….
rd
23 ,
March
2010
Affordable Care Act
Became Law
January 2013
The Foundation Behind Reform
Provide accessibility to health insurance for all Americans.
Control and reduce health insurance costs.
Standardization of health care coverage.
Create accountability for health insurers.
Provide guaranteed coverage with no pre-existing exclusions.
Increased transparency and consumer protection.
January 2013
Healthcare Reform
Components
Coverage Mandates
Essential Health Benefits
Exchanges – Public and Private
Pre-Existing
Transparency
Penalty Taxes
Non-Profit Plans
Other Regional Markets
January 2013
Healthcare Reform
Implementation Timeline
January 2013
2010
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January 2013
New national risk-pool
Small business tax credit
Prohibits lifetime benefits limits
Annual limits for essential benefits
Rescissions are prohibited
Preventative services without copays
Dependent coverage up to age 26
No Pre-existing condition exclusion for
dependent children
2011
• 85% MLR for large group (with refund)
is mandated
• 80% MLR for individual and small
group (with refund) is mandated
January 2013
2012
• Standardization
• DE developed Essential Benefits
(effective January 1, 2014)
• DE implemented Mini Cobra
• Federal Partnership for Exchanges
January 2013
Essential Benefits
Ambulatory Patient Services
Emergency Services
Hospitalization
Maternity and Newborn Care
Mental Health and Substance Use Disorder Services,
including behavioral health treatment
Prescription Drugs
Rehabilitative Services and Devices
Laboratory Services
Preventive and Wellness Services and Chronic Disease
Management
Pediatric Services, including oral and vision care
January 2013
2013
• Health Insurers file new rates
• HHS Secretary and states approve
(or disapprove) premium rate increase
requests
• Open enrollment begins 10/1/2013
(extends to 3/31/2014)
January 2013
2014
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Exchanges (Public & Private)are open for business
Plans outside the Exchanges are modified
Guaranteed issue
New rating rules
(Age, Wellness, Smoking, Territory, Industry)
Individual and employer mandates
No Pre-existing conditions
Multi state qualified health plans
Maximum deductible $2,000 individual/$4,000 family
Employee waiting period, maximum is 90 days
Full time employees, work 30 hours/week
January 2013
January 2013
Questions
Before moving on to the
Individual Mandate section, are
there any questions?
January 2013
Healthcare Reform
Individual Mandate
January 2013
Individual Mandate
• Effective January 1st, 2014,
every individual is required
to have Health Insurance.
January 2013
Exceptions to Individual Mandate
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Religious reasons
Below income tax filing threshold
Undocumented immigrants
Member of an Indian Tribe
Whose premium contributions for the
calendar year exceed 8% of household
income
January 2013
Individual Penalty
2014
Penalty is $95 per adult and $47.50 per child (up to $285 for a
family) or 1.0% of family income, whichever is greater.
2015
Penalty is $325 per adult and $162.50 per child (up to $975 for a
family) or 2.0% of family income, whichever is greater.
2016
Penalty is $695 per adult and $347.50 per child (up to $2,085 for a
family) or 2.5% of family income, whichever is greater.
January 2013
No Penalties If…..
• You have had qualified* health insurance
for the whole year.
*Qualified health plan is defined as …..
January 2013
January 2013
Questions
Before moving on to the How
to Get Health Insurance
section, are there any
questions?
January 2013
Health Care Reform
How To Get Health Insurance
January 2013
How Do You Get Health Coverage
Keep your current plan.
January 2013
How Do You Get Health Coverage
From an Employer
January 2013
How Do You Get Health Coverage
From MEDICAID, if the family income is less
than 133% of poverty the level - REGARDLESS
if employer offers coverage.
From Medicare
*Poverty level in 2011 was $10,890 for a single individual, $22,350 for a family of 4
January 2013
How Do You Get Health Coverage
From the Public or Private Exchanges.
If a family income is equal to or less the 4 times the poverty
level*, they will qualify for subsidies.
*Poverty level in 2011 was $10,890 for a single individual, $22,350 for a family of 4
January 2013
How Do You Get Health Coverage
From the general insurance
marketplace.
January 2013
How Do You Get Health Coverage
Individuals and Small
Businesses can get coverage
through the Exchanges.
January 2013
January 2013
Exchanges
January 2013
Exchanges, the purpose
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Transparency
Ease of comparing coverage and price
Orbitz/Priceline/eShopping experience
Federal partnership
Includes Platinum, Gold, Silver, Bronze Plans
Provide information on quality of plans
Determine eligibility for Medicaid, Medicare
and subsidies.
• Includes Essential Benefits
January 2013
January 2013
January 2013
Credits/Subsidies
Only Available in the Public Exchange
Credits are available on a sliding scale
to subsidize individuals and families with
incomes up to 400% of the federal poverty
level
Only available for the Bronze plan.
January 2013
Questions
Before moving on to the
Penalty-Tax section, are there
any questions?
January 2013
Employer
Penalty/Tax
January 2013
For Employers with less than 50 employees
There is no direct penalty for the small employer.
Note: If the employer has 25 or fewer employees and average
wages up to $50,000, they may be eligible for a tax credit.
January 2013
For Employers with 50+ employees.
Who offer a group plan with at least 60%
coverage and the employee does not pay
more than 9.5% of their income –
No Penalty
January 2013
For Employers with 50+ employees.
Who offers a group plan with at least 60% coverage and the employee
DOES PAY MORE than 9.5% of their income – Penalty will apply
The penalty is $3,000 annual for each full-time employee receiving a tax credit,
up to a maximum of $2,000 times the number of full-time employees minus 30.
The penalty is increased each year by the growth in insurance premiums.
Example: A firm with 75 full time employees, with 10 employees
receiving a tax credit.
The penalty is $30,000
(10 employees, receiving a tax credit x $3,000 each=$30,000)
The penalty would be $90,000 Maximum
January 2013
For Employers with 50+ employees.
Who does NOT offer a group plan and who has at least one employee
receiving a subsidy in an exchange – A Penalty will apply.
The penalty is $2,000 annually times the number of full-time employees minus
30. The penalty is increased each year by the growth in insurance premiums.
Example: A firm with 75 full time employees.
The penalty would be $90,000
(75 employees, less 30 times $2,000 each)
January 2013
For Employers with 50+ employees.
Who offer a group plan with less than 60% coverage – A Penalty will apply.
The penalty is $3,000 annually for each full-time employee receiving a tax credit,
up to a maximum of $2,000 times the number of full-time employees minus 30.
The penalty is increased each year by the growth in insurance premiums.
Example: A firm with 75 full time employees, with 35 employees
receiving a tax credit.
Penalty would be $105,000 (but maximum is $90,000)
•Mini Med Plan, costing $120,000
(75 employees, average annual premium $1,600)
•Total Mini Med Premium and Penalty cost would be $210,000
- or •A Bronze plan, inside the exchange, with an estimated annual
premium of $3,500 times 75 employees would have an annual cost
of $262,500
before any employee contribution.
January
2013
January 2013
New Taxes
Increases Medicare payroll tax by .9% on wealthy
individuals and families.
Imposes new Medicare payroll tax of 3.8% on non earned
income for wealthy individuals and families.
New taxes on insurance providers, drug makers, medical
device manufactures, clinical labs and tanning beds.
[some as early as 2011]
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“Cadillac Tax”: In 2018 a 40% excise tax imposed on high
comprehensive health plans.
January 2013
New Taxes
Medical Device Tax – New 2.3% excise tax on gross sales.
Flexible Spending Accts – Cap of $2,500 will apply
Investment Income – New 3.8% point surtax for
households of $250,000 or more.
Medical Itemized Deductions – Increase of current 7.5%
to 10% of AGI to qualify for deduction.
Medicare Payroll Tax – Increase from 2.9% to 3.8% for
January 2013
wages exceeding $250,000 for couples.
Why would a small employer continue to
offer health insurance coverage?
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Retention
Attract new talent
Pre-taxing benefits
Unknowns associated with Employees and
business owners with regard to the public
exchanges
 Stability of care for your staff
 Comprehensiveness of plan design
 Overall tax deduction
January 2013
Overall Concerns……
Network
Providers
Rates
Plan
Design
Federally
Managed
Exchanges
Healthcare
cost
containment
January 2013
Subsidy
Levels
Viability
of the
exchanges
Some Helpful Resources
• Kaiser Family Foundation www.kff.org
Illustrating How Healthcare Reform will work
http://healthreform.kff.org/profiles.aspx
• The Government’s Website
http://www.healthcare.gov/
• Benefits Connection Website
http://www.ChamberBenefitsConnection.com
• Allen Insurance Group’s Website
http://www.AllenInsurance.com
• HR360 – Online Human Resource Website
http://www.HR360.com
(logon is DANA-DE and password is alleninsurance)
January 2013
Today, we briefly discussed:
•
•
•
•
•
January 2013
History of Healthcare Reform
Individual Mandates
How To Get Insurance
Penalties and Taxes
What do you do next
Thank You for your attention to this very
important matter, your questions may be
sent to us at the address below.
John & Brad Allen
302-654-8823
[email protected]
www.AllenInsurance.com
January 2013