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Individual Mandate and Marketplace Realities: What do I tell my employees? (especially those not eligible for my group plan) January 21, 2015

Randy Spicer, Vice President, Health & Insurance Services National Restaurant Association rspicer@restaurant.org Clinton Wolf, Senior Director, Strategic Initiatives Optum

The Affordable Care Act is Here to Stay… in One Form or Another. Introduction The Affordable Care Act is Here to Stay… in One Form or Another.

Implement it in the way that best serves your business We need to: Understand it Implement it in the way that best serves your business Help employees make informed choices and Comply with Individual Mandate (…especially those not eligible for my group plan)

Open enrollment ends February 15th. Why now? Open enrollment ends February 15th. Employees are paying penalties for 2014. Many wait to enroll until the end. New Opportunities to help your employees and your business. ACA impacts all Employers and Employees

Reporting Requirements Requirements are Substantial Under ACA Onus is on the Employer to Prove They Are/Are Not Covered Under Act This Means Tracking Variable Hour Employees IRS May Require Proof If an Employee Goes to Marketplace (and Receives Subsidy): Employer may have to Prove Offer for Coverage Made If No Offer Made…Penalty Imposed If Wrong Type of Coverage Offered…Penalty Imposed

Standard Operating Procedure Standard Reporting Standard Operating Procedure Notice of Exchanges Must Provide Notice of Exchanges Within 14c Days of Hire NRA Notification Tool at notify.restaurant.org Offer Coverage Do Not Offer Coverage Include in New Hire Process Have Employee Sign an Acknowledgement of Receipt & File in Personnel File W2 Reporting – (File 250 or More W-2s) Provide Data on the Value of Health Care Coverage for Employees Enrolled in a Plan on Box 12DD on W2 Aggregate Cost (Employer + Employee)

Most Companies Plan to Offer Coverage Impact Of ACA People Report- Summary of Findings Two Most Common Tactics to Manage Cost Hire Relatively More Part-Time Employees Increase Prices Most Companies Plan to Offer Coverage Majority Believe Benefits Help Recruit and Retain the Best Employees

ACA Impact - Recruiting Will it Help?

Retaining Employees Will it Help?

Small Penalties Initially…Low Participation Impact Of ACA Impact on Recruiting/Retaining Will Grow Small Penalties Initially…Low Participation Down the Road…Expectations will Change Employees will Come to Expect Benefits Earlier you Address Issue the Better Find Solutions that Meet Business Needs Find Solutions that Meet Employee Needs Need to Understand and Manage Benefits for All Employees Going Forward

ACA Creates New Coverage Options

New Employer Benefit Models are Here Group + Individual Exchange Individual Exchange Only Provide Group Benefits to some Employees and Individual Exchange access/support for others. Provide all Cobra eligibles access/support to Individual Exchange. Provide employees access and possibly compensation & resources to enroll. Provide employees access only to Individual Exchange

I have COBRA and it’s too expensive I have COBRA and it’s too expensive. Can I drop it during Open Enrollment and enroll in a Individual Marketplace plan instead?  Yes, during Open Enrollment, you can sign up for a Individual Marketplace plan even if you already have COBRA. You will have to drop your COBRA coverage effective on the date your new coverage begins.   I’m leaving my job and will be eligible for COBRA. Can I shop for coverage and subsidies on the Individual Marketplace instead? Yes, leaving your job and losing job-based health coverage will trigger a special enrollment opportunity that lasts for 60 days. You can apply for Individual Marketplace health plans and (depending on your income) for premium tax credits and cost sharing reductions during that period. If you enroll in COBRA coverage through your former employer, however, you will need to wait until the next Open Enrollment period if you want to switch to a Individual Marketplace plan.

Employee Communication: Individual Mandate What do I tell my Employees?

Communicate - Employees What Do They Want to Know? What Does ACA Mean to Me? What are my Choices? What Will it Cost?

What does it mean to me? Affordable Care Act Individuals MUST acquire and maintain “minimum essential coverage” each month, qualify for an exemption, OR pay a penalty through their individual tax returns. The obligation to make quality, affordable health insurance coverage available to individuals is “shared” among: Federal and State governments Employers Insurers; and Individuals

What Choices do Employees Have? Individual Mandate What Choices do Employees Have? Get Coverage Through Their Employer Buy an Individual Plan Through Either: The Federal Health Insurance Marketplace (May be Eligible for Subsidy); The Private Exchange Market; or Private Insurance Provider Obtain Coverage from the Government (Medicaid, Medicare, TRICARE) Go Uninsured (Will Pay Penalty Unless They Qualify for an Individual Exemption)

Assessed April 2015 Individual Penalty Those Without Coverage Pay a Tax Penalty the Greater of : 2016 = $695 or 2.5% Taxable Income 2015 = $325 or 2% Taxable Income ($16,250+) 2014 = $95 or 1% Taxable Income

Employee Cost What will it cost? If You Offer Coverage…They are Not Eligible for a Subsidy thru the Exchange If You Don’t Offer Them Coverage…They could be eligible for a Subsidy thru the Exchange

Health Exchanges Exchange Plan Types Metal Level Target Actuarial Value Range of Allowable Actuarial Value Bronze 60% 58% - 62% Silver 70% 68% - 72% Gold 80% 78% - 82% Platinum 90% 88% - 92% Catastrophic Plans available for those under 30 and for those who are exempt because no affordable coverage is available or they have a hardship exemption. Sample Catastrophic Plan Individual Deductible Family Deductible Covers Essential Benefits $6,600 $13,200

Health Insurance Exchanges Exchange Credits What makes someone eligible for exchange credits? The individual’s household income is between 100% - 400% of the federal poverty level; and The individual does not have access to employer provided coverage… (1) that has an actuarial value of at least 60% or (2) the cost of coverage exceeds 9.5% of the individual’s household income.

Subsidy Calculator- Kaiser Family Foundation Premium Assistance for Coverage in Exchanges This tool illustrates health insurance premiums and subsidies for people purchasing insurance on their own in new health insurance exchanges (or “Marketplaces”) created by the Affordable Care Act (ACA). Middle-income people who are not eligible for coverage through their employer, Medicaid, or Medicare, can apply for tax credit subsidies available through state-based exchanges. http://kff.org/interactive/subsidy-calculator/

Family of Four; Two Adults & Two Children Results: The information below is about subsidized exchange coverage. Note that subsidies are only available for people purchasing coverage on their own in the exchange (not through an employer). Depending on your state's eligibility criteria, you or some members of your family may qualify for Medicaid. Household income in 2015: $35,775 is 150% of poverty level Maximum % of income you have to pay for the premium is : 4.02% Health Insurance premium in 2015 (for a silver plan, before tax credit): $8,474 /year You could receive a government tax credit subsidy of up to: $7,036 per year (which covers 83% of the overall premium) Amount you pay for the premium:$1,438 per year (which equals 4.02% of your household income and covers 17% of the overall premium) You are guaranteed access to a Silver plan with an actuarial value of 94%. Your out-of-pocket maximum for a Silver plan (not including the premium) can be no more than $4,500.

Health Exchanges Exchange Plan Types Metal Level Target Actuarial Value Range of Allowable Actuarial Value Bronze 60% 58% - 62% Silver 70% 68% - 72% Gold 80% 78% - 82% Platinum 90% 88% - 92% Catastrophic Plans available for those under 30 and for those who are exempt because no affordable coverage is available or they have a hardship exemption. Sample Catastrophic Plan Individual Deductible Family Deductible Covers Essential Benefits $6,600 $13,200

Communicate - Employees Many Are Waiting for Your Guidance A lot of misinformation is out there Understand their interest Make sure they know the cost of being covered and Not covered Some may be covered under parent or spouse’s plan Health insurance is a secondary concern that is trumped by earnings Most have never had insurance and don’t understand what is really being offered Might bring in your broker to talk to them about insurance Understand what they are signing up for Don’t care if you are a classified as small or large employer – they are interested whether you will offer insurance

UnitedHealthcare Alliance All Medical & Specialty Products Available Exclusive: Medical Discounts: Up to 5 % savings on manual premium for 51+ groups. Optum Restaurant Healthcare Discount card – $5 pepm and includes family Voluntary dental for part-timers with purchase of full-time dental policy 5% Discount on Specialty Products Greatly Improved pricing for Groups: Offering for first time Offering to new employee segments Individual Exchange Tool Kit in Select Markets 30

Partnering to help employees avoid penalties Tools to Share with Employees Partnering to help employees avoid penalties Partnered to provide: Easy to share information Posters Fliers Newsletter/email content More information and enrollment: Web and 800# available 800# is preferred Spirit of Sharing information

For Small Employers (under 50 FTEs)

For Large Employers (over 50 FTEs)

Download Resources www.uhctogether.com/TXkits www.uhctogether.com/FLkits www.uhctogether.com/NCkits

Individual Exchange To Do List Download the tool kit. Understand the options available. Communicate with employees Stay tuned to the Health Care HQ for the latest updates Restaurant.org/Healthcare Questions?

Vice President, Health & Insurance Services rspicer@restaurant.org Visit NRA Health Care HQ -www.restaurant.org/healthcare Randy Spicer, Vice President, Health & Insurance Services rspicer@restaurant.org