Health Care Reform - TANGO | The Alliance for Non-Profit ...

Health Care Reform

Rollin Schuster- Schuster Driscoll, LLC
Kevin Counihan – Access Health CT

Agenda

1.  BIG PICTURE

•  Evolution
•  Key Provisions

2.  Regulations

3.  Access Health CT

4.  Strategies / Determining Impact

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2

The Patient Protection and Affordable Care Act (“PPACA”)

President Obama signed HR 3590 into law on March 23, 2010

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3

Legal Rulings

20 Challenges 4 Appellate 2 - Upheld the Law
Have Been Court Rulings 1 - No Standing
Filed 1 - Unconstitutional

Judge Vinson Supreme Court

26 States   Unconstitutional
“Florida Ruling”   Non Severable

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Supreme Court Hearings – June 2012

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Political Environment

“Repeal Obamacare”

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Election 2012

It’s the Law of the Land and It’s Here to Stay

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8

Universal Coverage - 2014

All U.S. Citizens / Legal Residents
Must Have Health Insurance

Penalty

Greater of: 1% of income or $95 (2014)
2% of income or $325 (2015)
2.5% of income or $695 (2016)
(COL adjusted thereafter)

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What if an individual cannot afford to buy insurance?

GOVERNMENT Qualifications

Subsidies 1.  Household income between 100% and
400% of FPL, and
+
2.  No access to “affordable” employer
Premium Credits sponsored coverage

  Pays minimum of 60% covered medical costs

  Costs more than 9.5% if household income

EXCHANGES

BRONZE SILVER GOLD PLATINUM

Subsidies:

70% (250-400%) FPL

94% (100-150%) FPL

Carrier Carrier Carrier Carrier Carrier
A B C D E

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Affordability

•  Small Employer Tax Credit

•  Under 25 employees
•  Average salary less than $50,000

•  Medicaid Expansion

•  Under 138% of FPL

•  Individuals With No Access To Affordable Employer Sponsored
Coverage

•  Under 400% of FPL
•  Exchange subsidies

2013 Federal Poverty Level Guideline
100% - $11,490 – Single
400% - $45,960 – Single
400% - $94,200 – Family of 4

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Employer Mandate- “Pay or Play”

Employers with 50 or more full time employees must provide a
minimum level of coverage or be taxed

Calculation for Full-Time
•  30 Hours/Week
•  Full Time Equivalent Employee (FTEE)

FTEE= Total # of part-time hours for the month / 120

Effective 2014

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Determining Full Time Status

Employees who work:

•  Irregular hours
•  Variable schedules
•  Seasonal employees
•  New employees with uncertain schedules

IRS Notice 2012-58:

MEASURMENT ADMINISTRATIVE STABILITY
PERIOD PERIOD PERIOD

3 To 12 Months Up To 90 Days @ Least 6 Months

“30 hours” 13

Employer Mandate Penalty Tax Applies if …

At least 1 EE And ER coverage And EE receives
buys insurance in is nonexistent / a premium tax
insufficient
exchange credit

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Employer Mandate Penalty – No Coverage

Penalty for employers that DO NOT provide coverage
The employer will pay a penalty for all full-time employees (not FTEE).

Penalty equal to $2000 / year / full-time employee (less first 30 EEs)
Example:

XYZ Non-profit has 400 employees working over 30 hours
and offers no coverage:

(400 – 30 = 370)
(370 x $2000 = $740,000 penalty)

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Employer Mandate Penalty - Insufficient Coverage
Penalty for insufficient coverage

Penalty will equate to the lesser of:
•  $2,000 annually for each full-time employees (not FTEE)
(less first 30 full-time employees); or
•  $3,000 for each employee receiving a tax credit

Effective 2014

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Sufficient Coverage

Affordable •  EE’s contributions for single
coverage must not exceed 9.5% of
EE’s income

Qualified •  Plan design must pay at least 60%
of allowed charges and meet
minimum benefits standards

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Employer Mandate Penalty (not tax deductible)

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Affordability Test for 4980H(b)

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Affordability Test

SALARY 9.5% MONTHLY BIWEEKLY

$20,000 $1,900 $158 $73

$24,000 $2,280 $190 $88

$28,000 $2,660 $221 $102

$30,000 $2,850 $237 $109

$40,000 $3,800 $316 $146

$44,000 $4,180 $348 $160

Your Cost* $______ $______ $______

* Single contribution for lowest cost plan

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The Big Question in 2014 and Beyond

Do we offer health coverage?

YES Sample Single Premium Net Cost:
NO $3,700 Plus $1,000 HSA Funding = $4,700

Penalty Tax $2,000

COST VS. RECRUITMENT &
RETENTION

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CT Small Business Exchange

Access Health CT – Tax Credit

•  Fewer than 25 full time employees
•  Must provide health insurance
•  Cover at least half the cost (single)
•  Average annual wages below $50k

Example: Non-Profit Organization

10 full time employees
$400,000 annual wages
$35,000 annual premiums

Estimated tax credit 2010-2013 = $3,500
Estimated tax credit 2014 & beyond = $4,900

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Connecticut Health
Insurance Exchange

A Vision for the Future
Tango Alliance

April 24, 2013
Kevin J. Counihan
Chief Executive Officer

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What Is An Insurance Exchange?

  Organized marketplace for health plans to compete and
offer services efficiently in the small group and
individual markets

•  Not exclusive – markets will exist outside exchange
•  All enrollees in/outside exchange in single risk pool

  Provides level playing field for health plans to comply
with benefit requirements and consumer protections

  Facilitates competition based on price, quality, and
value

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What Is An Insurance Exchange?

  Options:
1.  State-Based Exchange (CT)
2.  Federal Partnership Program
3.  Federal “Default” Exchange

  Medicaid Expansion – 133% of FPL

  Subsidized Coverage – 134%-400% of FPL receive
tax credits to offset premium costs

  Eligibility for subsidies and public coverage based
on IRS Modified Adjusted Gross Income (MAGI)

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Customer Service Functions

1)  Create an “easy and simple” web portal for
consumers, small businesses, brokers to shop
and compare for health insurance

2)  Provide call center for eligibility, subsidy,
selection, and enrollment assistance

3)  Brokers and “Navigators” for individual customer
information and enrollment support

•  Assist determining eligibility for tax credits and
subsidies

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How It Works

  The Exchange enrollment process is defined by 6 major
steps

Enter Applicant
Information

6 2

Process Verify With Data
Application “Hub”

Complete Display Plan
Enrollment Options

Select Plan

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Existing State Exchanges

  Massachusetts Connector
•  Merged Individual and
Small Group markets
•  Quasi-governmental
organization
•  220,000 enrollees

  Utah Exchange
•  Defined Contribution small
group model
•  Part of Governor’s Office of
Economic Development
•  5,000 enrollees

  Roughly 13 state-based exchanges
in progress

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CT Exchange - Opportunity

  10% of state residents uninsured
  344,000 individuals
  585,000 Medicaid enrollees
  Project Medicaid increase of 75K

enrollees
  Expect 120K in state exchange- 1st

Year
•  Majority newly eligible for subsidies
•  Roughly 10-20% will be small

business enrollees

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Key Functional Areas

  Enabling legislation – Public Act 11-53

  Governance
•  Board of Directors
•  Planning Grant – September 2010
•  CEO and staff
•  Policies and by-laws

  Four Advisory Committees
1.  Consumer Experience and Outreach
2.  Health Plan Benefits and Qualifications
3.  SHOP (Small Business Health Options Program)
4.  Brokers, Agents, and Navigators

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Key Functional Areas

  IT Systems
•  Integrated Eligibility – “No Wrong Door”
•  Gap analysis complete
•  Business requirements
•  IT and Integration Architecture
•  Systems Integrator Procurement

  Program Integration
•  Rules and support for DSS program management
•  Roles and responsibilities for CID, OPM, DRS

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Vision For The Future

  Create User-Friendly Shop and Enrollment Experience
  Reduce Level of Uninsured
  Provide for Health Insurance Options
  Promote Innovation and Competition
  Facilitate Discussion to Create More Affordable Health Insurance

Coverage

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Key Considerations- 30 hour eligibility

Employees working over 30 hours, but not eligible.
Example: Eligibility for benefits at 37.5 hours
• Enroll in your plan
• Go to exchange
•G  o on spousal coverage
• Pay Penalty

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Key Considerations

Affordable Coverage (9.5%)

Cost of lowest cost single plan* ___________
9.5% of employee salary ____________

* Must meet essential benefits test of 60%

Consider adding a “Bronze” level plan as
low cost options for employees

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Key Considerations- Variable hour employees

•T  racking Hours

–  Measurement Period
–  Administrative Period
–  Stability Period

• Potential for inclusion in your plan or penalty if accessing
exchange and receiving a subsidy due to unaffordable or
insufficient coverage

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Strategy
Increase employee contribution for lower paid employees-
over 9.5% of income- steering them to exchange

•  Pay $ 3,000 penalty
•  Increase salary for mid and upper management

May have a negative impact on demographics
thus increasing cost of corp sponsored plan.

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Strategy Defined Contribution

Allocate fixed dollar amount per employee
* Let them spend it where they wish *

•  Corp Sponsored Plan
•  Private Exchange
•  Public Exchange

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Strategy Small Group Market (<50 ee’s)

Carriers are extending their rates to 4Q 2013

•  New 12 month renewal period
•  Keep plan design
•  Rate stability through December 2014
•  Potential for significant rate increases in 2014

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Private Exchange

BENEFIT
COUNSELOR

PUBLIC PRIVATE
EXCHANGE EXCHANGE

Subsidies Technology Interface Health
• Enrollment
• Carrier Feeds •  Multiple Plans
•T  utorials •  Dental
•  TeleMed
“Employee Experience” •  Vision

--------------------

Money

•  HSA
•  FSA

--------------------

Protection

•  Life
•  Disability
•  Pet Insurance

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Trends – Managing Cost

TRADITIONAL MARKETPLACE
SELF FUNDING

DEFINED PUBLIC EXCHANGES
CONTRIBUTION PRIVATE EXCHANGES

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Resources - The Time is Now!

•  PPACA Calc
•  Board / Leadership Presentation
•  Compliance Portal
•  HR 360

•  Free for our clients
*Discounted for TANGO members

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Schuster Driscoll / TANGO

Employee Benefit Platform

MADCA
 /
 TANGO
 
Benefit
 Services
 

HR
 Compliance
 
  Benefit
 Administra9on
 
  Proprietary
 Discounts
 
and
 
 
and
 
  and
 
 
Regulatory
 Support
 
Workflow
 Support
  Private
 Health
 Exchange
 

Benefit
 Communica9on
 
  Workplace
 Wellness
  Fiduciary
 Guidance
 
 
and
 
  “Health”
 and
 “Wealth”
  and
 
 

Educa9on
 Services
  Monitoring
 Program
 

Preferred Partners

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Access Health CT

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Exchanges

http://www.accesshealthct.com/news-events/in-the-
news/

http://www.liazon.com/bright-choices/exchange.cshtml

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THANK YOU!

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