Chasing and Updating the Affordable Care Act… PRESENTED BY CHARLIE WAITS GROUP HEALTH AND EMPLOYER INSURANCE SERVICES

It’s Still Health Insurance  Deductibles, 80/20, co-pays, lists  Small and Large Employers treated differently  Funding options are allowed (fully or self)  Insurance coverage is similar as years past, introducing Metallic Plans with EHB  Metallic Plans based on level of coverage, Platinum covers 90%, Gold 80%, Silver 70%, Bronze 60% of actuarial charges

Affordable Care Act?  Transitioning to people paying for medical coverage based on how much they make instead of how much it actually costs  The rest of the cost is made up from other sources, employers, tax payers, etc  Legislation for Employers and Insurance Plan

How to transition?  Individual Shared Responsibility (Pay or Play)  Employer Shared Responsibility (Pay or Play)  Marketplace  Discrimination guidelines (postponed)  Auto-Enrollment for over 200 (postponed)  Eligibility guidelines  Rating for individuals and small groups  Enforcement

……In Play Today For 2015  Employer Shared Responsibility  Small Employers 1-49…..and transitional benefits (policies before )  Medium Employer 50-99….transitional benefits…report under 6056  Large Employers 100 or more… , transitional benefits ( ), 70% offer  Insurance Reforms  Orientation and the 90 day waiting period  Risk Management (Fees and Taxes)  Section 6055 and 6056 Reporting….due 2016  Mental Health and Parity  Hipaa Certification

Individuals Pay or Play  2014 Penalties the greater of $95 per person, $47.50 per child or 1% of income  2015 Penalties the greater of $325 per person, $ per child or 2%  Maximum of 3 per family  They go up each year  Exemptions and Hardship Exemptions

The Marketplace/Exchange  Individuals or small groups get coverage  Several carries and plans in one place  Plan designs based on exchange guidelines which included Essential Health Benefits  States or Federal Government based  Notice about exchanges sent to employees and new hires within 14 days of hiring  Medicaid expanded to reduce exchange and group enrollment….and subsidies

Employer Eligibility for the Exchange and Subsidies  Employer must be small business  Small group status 50  Subsidies possible with 25 employees or less and less than an average of $50,000 salary  Insurance companies will not enforce participation/contribution rules…if there are 40 eligible employees and only 10 enroll…they will be required to issue coverage through the exchange

Information for Employers Considered a Small Business  Transitional plans granted extension from EHB until 2016…including youth dental/vision and must be in place or renewed before  Stand/Alone Dental/Vision Plans meet EHB,and are Excepted Benefits like Cancer Policies  Large Deductibles are allowed  Mental Health and Parity Laws Apply unless self- funded plan or grandfathered plan  Groups with FTE’s also granted relief until ….must indicate when reporting under Sections 6055 and 6056, (1095/C)

Individual Eligibility for the Exchange and/or Subsidies  Live in the US, US citizen, national, or lawfully present, and not incarcarated  Individual Subsidy based on percentage of FPL  Subsidies are not available for individuals if their employer provides affordable plans for their employees…at this time, dependents are also ineligible for subsidies if the employee only plan is affordable

Ratings  Individual or Family  Geographic rating area  Age banding 3 to 1, 21 year old to 64 or older  Tobacco use (50% more)

Taxes/Fees REINSURANCE TAX OF $44 A YEAR, $3.67 PER MONTH, PER EMPLOYEE PATIENT CENTER RESEARCH INSTITUTE FEE OF $2 PLUS MEDICAL INFLATION FOR 2015 AND SCHEDULED TO END WITH PLAN YEARS ENDING INSURANCE COMPANIES PAY ALSO, FEES BASED ON PREMIUM

Wellness Programs  Participatory Programs - available to all  Health Contingent Programs - 5 guidelines  …reward every year  …up to 30%, 50% for tobacco, of employee rate  …promote health or prevent disease  …alternates, either activity or outcome based  …disclose alternates  Tobacco use can offset employer 9.5%

Enforcement  IRS will enforce  Penalties for employers calculated monthly  Penalties for individuals on their tax return  Penalties are not tax-deductible

Control Groups  Five or fewer people in the group collectively own 80% or more of the equity in two separate trades or businesses  Own 50% or more in each of the two or more  **** Source is BakerHostetler law firm from Employee Benefit Advisors, June 2014

Employer Shared Responbility  Depending on which is is………  Is the Mandate Going to Remain  Is the Mandate Going to Be Repealed  Is the Mandate Going to Be Replaced  ****Many think it will be amended to 8% of payroll taxes

Employer Shared Responsibility for ALE’s (Applicable Large Employer’s)  60% of AV…($6600/$13,200, family, out-of-pocket)  9.5% of income for lowest cost plan, employee cost 3 safe harbor’s…FPL, EE W-2, or Rate of Pay x 130  Penalty (some call it a tax) of $2000 per EE if not offered…..credit of 80 for 2015, 30 in 2016  Penalty (some call it a tax) of $3000 per full-time enrolling in exchange & subsidy  Penalties for large groups, calculated monthly  Controlled groups counted as one  Can use any consecutive 6 months of 2014 for 2015 to determine ALE status & 12 months stability

ESR and ALE, continued  ALE has 50 Full Time Equivalent Employees or more, example:  hours a week, or 96 monthly 20 x 96/120, or 1920/120 = 16  If you had 35 full-time employees, the total is 51 and are an ALE  Full time employee, 30 hours/week or 130 hours/month, for measurement period  Most hours per month for non-full time is 120…and divide total hours by 120  Volunteers, work study program, those outside US do not apply  FTE’s for purpose of ALE determination only  Seasonal workers not full time EE’s  6 months or less, and employment begins at the same time  If you are over 50 for fewer than 120 days, and those taking you over are seasonal for that time, then not ALE  And, get transition relief in 2015

Eligibility Guidelines for Employers  Measurement period 12 months….monthly or, look back for eligibility…..for 2015 can be any consecutive 6 months instead of 12  Administration period….90 days + partial month maximum  Stabilization period, can be 12 months with any 6 month consecutive look back for 2015  30 hours a week or 130 hours a month  Must make a good faith determination of full time status at hiring  Seasonal and variable employment

Section 6055 Reporting for 2015  To IRS, (2.28 is a Sunday) or 3.31 if Electronic  Name, Address, EIN…Insurers often report, or Plan Sponsors of a Self-Insured Plan  Name, Address, TIN (dob if N/A) for all covered  Any other specified information on the form  To Employees By each year, as 1.31 is a Sunday, in Year MEC Provided  Contact Info and Policy Number of Reporter  Can Send with W-2  Waiting for 1094, 1095, & Codes  Employers 250 or More….Electronic Required

Section 6056 Reporting for 2015  For ALE’s Play or Pay and Tax-Credit Status  Due to IRS  Paper (2.28 is a Sunday)  Electronic submission  All Plans, even if renewing mid-year  With 6055 if Self-Insured & 3 rd Parties Allowed  To IRS  Name, Address, EIN, Year, Contact info, If MEC and month there was MEC, Offered MEC and by month, number of full-time employees either by month or payroll basis, months that MEC was offered to each full-time employee, employees shared of lowest cost MEC plan, name..address..TIN for each full-time employee, not dependents, eligible for MEC by month…other as required

Section 6056 Reporting (continued)  Reporting with codes…being developed  Coverage was MEC and offered to dependents, total employees by month, effect of waiting period, if no ee’s for a month, if the ALE is part of controlled group and the name, address, ein for each employer in the aggregated group, if designated gov’t group contact..their info, multi-employer group responsibility, 3 rd party info, if MEC was offered to ee and dependents, cover not offered will it be play or pay penalty, or the ee was not full-time or not employed, coverage offered and not full- time for that month, ee was covered under the plan.  To Employee…  If electronic, best guide is corresponds to W-2, with employees consent, no website, or can mail with W-2 by  Employer’s name, address, EIN and the information shown on the 6056 return with respect to that specific full-time employee

Discrimination Guidelines  Postponed with no target date provided  Guidelines not given…projections  Non-discrimination rules 105 (h)  Avoid favoring top 25%  All pay the same for the same coverage  Projected penalty is $100 per employee affected per month

Auto Enrollment  (Delayed, projected effective date unavailable)  More than 200 Full-Time Employees

Disclaimer  This presentation is for informational purposes only and not compliance, tax, or legal advice  It is not intended to be a complete and total review of the entire legislation, and based on the information current at time of preparation.  It is also virtually impossible to project the all differing needs and scenarios facing employers in a single presentation.  For specific needs for your company, please contact the specialists necessary for accurate evaluations.