7. Other Plan Design Changes
2011
• Emergency Services
– Must be covered without pre‐authorization
– Must be covered in or out‐of‐network
• OB/GYN may be designated as PCP
• Preventive Care must be fully covered
– No cost sharing
8. Consumer Driven Plan Changes
• January 2011
– OTC meds no longer qualified expenses
• FSA, HRA, HSA
– Can get doctor’s order
– OTC supplies still eligible
– Switchover will vary by merchant (IIAS)
– Penalty for non-qualified use of HSA funds
increased from 10% to 20%
• January 2013
– FSA plan year contributions capped at $2500
9. Wellness Incentives
2011
• $200 billion in grants available over 5 years for
employers who
• Have fewer than 100 employers who work more than 25 hours a
week and did not have a workplace wellness program as of
3/23/2010
• Employers may create up to 20% incentive for completion of
wellness program
– Programs must meet minimum criteria established by
HHS.
2014
• Incentives of 30% (or up to 50% with HHS approval)
11. Small Employer Tax Credits
2010 – 2013
• Up to 35% tax credit for employer contribution
– Small businesses with 25 or fewer EEs and avg. wages of
$50,000 or less (full credit for 10 EE s and less)
– Who pay at least 50% of health insurance costs
2014
• Increase to 50% for businesses who buy through
Exchange (for up to two years.)
• CBO estimates 12% of small business will qualify
17. Subsidy Payment & Reconciliation
Carrier A Carrier B Carrier C Carrier D
S P E
Individual Exchange The
Exchange Reporting
Preferred Model
(Carriers could bill and collect.)
S
E (S) Determine Subsidy
I Eligibility/Amount
P
(E) Plan Selection, Enrollment
( I) Premium Invoice
(P) Non-Subsidy Premium Payment
18. Carrier A Carrier B Carrier C Carrier D Carrier E
E E E
E
P E P P
P P
ti on
The
on cilia
Exchange r Rec
Carrie
(P) Group Premium Payment
(E) Plan Selection, Enrollment
E I P
( I) Premium Invoice
Tax Credit Mechanism
Employer
19. Precious Metal Plans
• All plans must meet HSA OOP limits
• Bronze – covers 60% of benefit costs
• Silver – 70%
• Gold – 80%
• Platinum – 90%
• Catastrophic Plan for Young Invincibles
– Up to age 30
– Or exempted from mandates
• Carriers only have to offer silver and gold
22. Employer Penalty – No Plan
• Effective January 2014
• 50 or more EEs
• If you do not offer “minimum essential
coverage” AND
• At least one full‐time employee receives
subsidy through the Exchange
– $2000 penalty per employee
– Excluding first 30 EEs
23. Real Cost of Dropping Coverage
Number of Employees 10,000
Less 30 exempted 9,970
Premium $ 8,863
EE Contribution (25%) $ 2,216
Employer Contribution (75%) $ 6,647
Penalty (non-deductible)
($2000 per EE less 30 Ees) $ 1,994
Loss of Deduction $ 798
Net Cost $ 2,792
Employee Compensation Increase
(90% of employer contribution) $ 3,324
Tax Gross Up (30%) $ 997
Total Comp Expense $ 4,321
Total Employer Cost $ 7,112
24. Free Rider Penalty
Effective 2014
• 50 or more EEs
• Even if you offer coverage, subject to penalty if:
• Coverage is unaffordable because EE must contribute
more than 9.5% of household income
• Or if plan covers less than 60% of covered health expenses
• And one or more full‐time EEs receives a subsidy.
• Lesser of:
• Penalty of $250 per month ($3,000) annually per subsidized EE
– $2.000 multiplied by all full‐time employees, less 30 EEs
25. Free Choice Voucher
• Applies to employees within 400% of the
FPL
– If their contribution cost is between 8% and 9.8
of their income
– And they want to buy coverage through the
Exchange
• Employer must provide EE with a voucher
equal to employer contribution to buy
insurance through Exchange
• No penalty to employer who offers voucher
27. Creative Design Mix
Wellness Education Leave
Incentives Management
$3050 deductible Fixed
POP Plan
HSA-qualified insurance plan Cost
$1850 HRA for Employees Variable
$3050 (Buy down deductible to $1200)
Cost
1040
Deduction HSA
FSA for Employees
for Owners (Covers 1st $1200)
Voluntary
Dependent Care - $5000