Benefits Group Manager Implementing PPACA (Patient Protection and Affordable Care Act) Presented by Thomas Goedde, CLU, ChFC Benefits Group Manager

Where Are We Now? The House passed the Senate bill on March 21,2010 House and Senate passed “fixes” Signed by President on March 23, 2010 September 23, 2010: Implementation begins “We have to pass the bill so that you can find out what is in it” …. Speaker Nancy Pelosi 2

Confused – Implementation overload!! DON’T PANIC YET!! Don’t memorize this! We are at the End of the beginning—7 to 10 years of rule making and changes.

How the Public Views PPACA Rasmussen: 55% view PPACA as “Unfavorable” (5/6/2013)

How the Public Views PPACA (cont.) Kaiser Family Foundation: 23% don’t know about PPACA 12% think Congress has repealed 7% believe it has been overturned by the Supreme Court 40% cite family and friends as primary source of news 40% view as unfavorable (5/9/2013)

The Sugar 2010 Small Business Tax Credit Reinsurance for Employers who provide Early Retirement Coverage (Age 55-65) High Risk Pool for Uninsured Dependent to Age 26 Rescissions Prohibited Lifetime / Annual Limits No Pre-Ex for Children to Age 19 Coverage for Preventive Care

2011 2012 Class Act (Suspended 10/14/2011) MLR – Medical Loss Ratio 80% for less than 100 employees 85% for 100+ 2012 Expanded Preventive Care Services for Women Uniform Summary of Benefits and Coverage (SBC) 60-Day Notice of Material Modifications MLR Rebates

… and The Not So Sweet 2013 W-2 Reporting (250+) $2,500 Limit On FSAs Increased Threshold for Medical Expense Deductions from 7.5% to 10% Additional Medicare Tax for High Wage Workers Medical Device Tax of 2.3% SBC penalty up $100/day 60-Day Notice of Plan Changes

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Shared Responsibility Individual Mandate Buy Minimum Essential Coverage, or, Pay a Penalty *Effective on Anniversary Employer Mandate Employer with 50+ Employees must offer coverage Small Employers exempt, but still subject to - Market Reforms - Taxes *Effective on Anniversary

Individual Mandate Every American must have Minimum Essential Coverage Or, Pay a Penalty! (errr, Tax) 2014 - $95 or 1% of Earnings 2015 - $325 or 2% of Earnings 2016 - $695 or 2.5% of Earnings Family – a limit of three

Individual Mandate (cont.) Individuals can access: Medicaid Exchange

Individual Mandate (cont.) Medicaid available up to 138% of the poverty level (2013: $11,490) to date only about half of States favor expansion (only seven states have passed legislation as of 5/12/2013 –AR, CO, MD, MN, NC, NM & NY)

Individual Mandate (cont.) Exchange (over 138% of FPL) With subsidies up to 400% of FPL, if not “affordable” at work Employer Plan, if available

Individual Mandate (cont.) Exchanges – State, Federal, or Partnerships Buy through Exchanges with No medical information No exclusion for Pre-ex Market Reforms Compressed Age Rating Buy with subsidy if not “affordable” at work

What is an Exchange? A marketplace that provides individuals & small business comparable access to insurers plans: Consists of a selection of private plans Multi-state plans Separate exchanges for individuals vs. small employer (SHOP) permitted State Action 17 State-based Exchange 7 State-Federal Partnership Exchange 26 Default to Federal Exchange

Employer Shared Responsibility Large Employers Offer coverage or pay a big penalty Offer affordable coverage, or pay a fine if … Small Employers No requirement to provide benefits but rates will (probably) go up

Employer Mandates (cont.) Small Employer (under 50) No Requirement to provide coverage But, Subject to - Market Reforms Taxes Low Deductibles and Out-of-Pocket

Employer Mandates (cont.) Large Employers Must OFFER coverage with Essential Health Benefits to substantially all employees (or pay a fine of $2,000 x # of employees less 30)

Employer Mandates (cont.) Large Employers Must offer coverage that is: Affordable – 9.5% of W-2 wages Provides Minimum Value or, pay a penalty of $3,000 for each employee - who get a subsidy from the exchange

Employer Mandate Calculator htpp://www.uschamber.com/ health-reform/calculator

Large Employer (cont.) No Maximum Deductible ($2,000) Maximum Out of Pocket limited to HDHP OOP ($6,350 / $12,700) Applies to Non-Grandfathered Plans only

Shared Responsibility 90 Day Waiting Period 30 hours per week or 120 per month Maximum W.P. is 90 calendar days (not first of the month following) Must cover if reasonably expected to be a full-time employee (not seasonal) What about - seasonal (120 days?) variable hour cumulative hours of service (can’t exceed 1,200 hours, one time only)

What We Are Hearing As regulations are issued, new ideas and strategies emerge: Voluntary plans that meet minimum requirements for individuals combined with Employer plans that avoid large fines PEO/Staffing Agencies – “common law standard” applies (Regs. not final)

2013-14 Unfinished Business Notice to Employees of Exchanges Originally due March 1st Now, October 1st Auto Enrollment Companies with 200+ employees must auto enroll Rules not yet released

Questions to Discuss with your Attorney Should we offer coverage? Should we just pay the penalty? Do we provide Minimum Value? Is coverage affordable?

Questions