The document provides a summary of the top 10 things employers should know about health care reform. It outlines provisions such as the establishment of state-run health insurance exchanges in 2014 that will allow small businesses to pool resources. It also discusses an upcoming pay-or-play mandate requiring employers with over 50 employees to provide minimum health coverage or pay penalties, changes to FSAs and HSAs, and the availability of tax credits for small businesses that establish wellness programs. The summary emphasizes the importance for employers to stay informed as implementation details are still being determined.

1. HEALTH CARE REFORM:
Top Ten Things Every
Employer Should Know
presented by:
Robyn Rusignuolo / Modern Business Associates
September 30, 2010

2. DISCLAIMER
This seminar is not intended to provide
tax, insurance or legal advice. No
action should be taken in reliance upon
information provided.
Legal counsel should be consulted prior
to making significant tax, health care-
or benefits-related decisions.

3. • The Patient Protection & Affordable Care Act and the Health Care
& Education Affordability Reconciliation Act of 2010 were (barely)
signed into law in March 2010.
• Since 1999, employment-based health insurance premiums have
increased 120%, compared to inflation of 44% and wage growth
of 29% during the same period.
• Small businesses on average pay 18% more than big businesses
for the same health insurance policies.
• Employer-sponsored plans cover 159 million people (52% of
Americans).
• Most of the provisions do not take place until 2014, but….

4. Who Said That?
“All of you exercise freaks, you’re
the ones putting stress on the
health care system…”

5. 10. www.healthcare.gov
• As part of the reforms mandated by health care legislation,
the federal government launched healthcare.gov in July
2010.
• Focuses on explaining health care reform, giving advice, and
providing various health insurance options.
• Biggest single resource for employers and employees.
• Specific link for employers, and also for small businesses.
• Provides a comprehensive timeline and detailed explanation
of provisions.
• First central database of coverage options—it even provides
links for you to access state-specific information.
• Consumers can compare plan prices.

6. 9.
www.healthcare.gov

7. 9. The September 23, 2010
Enactments
• Recently enacted provisions include significant
limitations on insurance companies and new rights for
consumers.
• Elimination of lifetime limits.
• Phase-out of annual limits.
• Young adults can stay on their parents’ plan until age 26.
• Children with pre-existing conditions cannot be denied
coverage.
• Insurance companies cannot rescind or cancel coverage
if you get sick, except in limited circumstances.

8. 9. The September 23, 2010
Enactments
• Consumers receive certain free preventive care
(immunizations, mammograms, preventative tests,
blood pressure screenings, etc.).
• Easier and guaranteed appeals process for denied
claims.
• Easier access for OB/GYN services and when
choosing primary care doctors.
• No penalties for using out-of-network ERs in the
event of an emergency.
• If your plan year starts January 1, that is when the
these changes take effect.

9. 8. Small Business Tax
Credit
• The Small Business Health Care Tax Credit took effect
immediately upon the passage of health care reform.
• Approximately 4 million small businesses can take
advantage of the credit.
• Specifically targeted for employers with low- to moderate-
income workers.
• Can be applied to health, dental and vision benefit
premiums.

10. 8. Small Business Tax
Credit
• Limited to employers with fewer than 25 full-time workers and
average annual wages of less than $50,000. (Two part-time
workers count as one full-time worker.)
• Applies to employers that pay for at least 50% of single
insurance coverage for their employees.
• Worth up to 35% of premium costs, and up to 50% by 2014.
• Determine whether and to what extent you are eligible at
http://www.irs.gov/pub/irs-utl/3_simple_steps.pdf.

11. Who Said That?
"It may not happen in my lifetime, or Dick
Cheney's, but hopefully by Easter..."
(On March 20, 2010, regarding whether Democrats
could actually pass health care reform. Easter was
on April 4th.)

12. 7. Implementation of the Law
Is Still Under Development
• Pass now, ask questions later.
• Interpretation and specifics of the majority of provisions are
unknown.
• Various government agencies have been tasked with
drafting rules and regulations (Department of Labor,
Department of Health and Human Services, etc.).
• New rules and regulations are constantly being released.
• The burden is on employers to remain informed.
• Remember…healthcare.gov is a great resource for
employers.

13. 6. Employee Wellness
Program Reform
• Serious shift favoring the creation and promotion of wellness programs.
• Research shows wellness programs have various workplace benefits,
including decreasing health care costs, increasing employee morale and
productivity, and reducing illness and absenteeism.
• Substantial small business wellness grants are available to employers.
• $200 million has been designated to award grants to employers with under 100
employees who establish new comprehensive workplace wellness programs
between 2011 and 2015. (Employers with existing wellness programs as of
March 23, 2010 are not eligible.)
• The Department of Health and Human Services is developing criteria for the
programs, but the program must include components such as health
awareness initiatives, initiatives to change unhealthy behaviors and lifestyles,
and workplace policies to encourage healthy eating, increased physical
activity, etc.

14. 6. Employee Wellness
Program Reform
• Larger health plan premium discounts are available for employee
participation in wellness programs.
• For plan years beginning on or after January 1, 2014, employers can
offer discounts of up to 30% of the cost of premiums under the plan to
employees who participate in wellness programs that require the
employee to satisfy a specific health standard. (Discount may be
increased to 50%.)
• No later than March 23, 2012, and on a regular basis thereafter, the
Center for Disease Control must conduct a national survey to assess
employer-based health policies and wellness programs and then
submit reports to Congress with recommendations for the
implementation of effective employer-based health policies and
programs.

15. 5. Break Times and Locations
Required for Nursing Mothers
• New law enforced by the Department of Labor.
• Employers must provide employees with the ability to take
breaks for a “reasonable” amount of time, and as frequently as
needed, for the purpose of expressing milk for nursing infants
up to one year old.
• Unpaid breaks are required for non-exempt employees only;
however, exempt employees may be entitled to breaks under
state law.
• Employers must provide a private area for this purpose that is
shielded from and free from intrusion by coworkers (bathrooms
are specifically excluded).

16. 5. Break Times and Locations
Required for Nursing Mothers
• Employers with less than 50 employees are excluded from
the new requirements only if they can demonstrate that
compliance would create an “undue hardship” by causing
significant difficulty or expense when considered in relation to
the employer’s size, financial resources, nature or physical
structure.
• The DOL is expected to issue guidelines that define what
constitutes a “reasonable” break time.
• Compliance is encouraged to the greatest extent possible.
• It only takes one DOL complaint to open a Pandora’s Box…

17. 4. Pay-or-Play
• Automatic Enrollment Mandate: Beginning March 1, 2013, employers
with more than 200 employees must automatically enroll employees in
their group health plan. Employees can opt out or pay a penalty.
• Employer-provided coverage mandate: Employers with 50 or more
full-time employees must provide “minimum essential coverage” to
employees working over 30 hours a week.
– Minimum essential coverage not yet defined, but employers must provide
at least 60% of such coverage.
– Employee cost cannot exceed 9.5% of an employee’s household income.
• Beginning on January 1, 2014, any employer who fails to provide
required coverage will be assessed tax penalties of up to $2,000 per
full-time employee.

18. 4. Pay-or-Play
• Free Rider Penalties: If any employee’s cost of coverage exceeds
9.5% of household income, and an employee purchases through a
state exchange, the employer will be subject to a “Free Rider Penalty.”
– Must pay lesser of $3,000 per employee purchasing through an exchange
or $2,000 per employee.
• Free Choice Voucher: If an employee’s income is below 400% of the
poverty level (around $88,000 for a family of four) and the cost of
coverage exceeds 8% of household income, the employer must offer
a “free choice voucher.”
– The voucher will purchase coverage through a state exchange offering
the amount the employer would have paid to cover that employee under
the most generous option in the employer-provided plan.
– If cheaper, the employer must pay the exchange and the employee will
retain excess funds.

19. Who Said That?
“The health care bill was introduced
yesterday. It's 1,990 pages long and
costs $894 billion dollars. Or $2.2
million per word. That makes them
the most expensive words to come
out of Washington...’”

20. 3. FSA, HSA and HRA Changes
• Starting in 2013, Flexible Spending Account (FSA)
contributions will be capped at $2,500.
• Taxes on non-medical withdrawals from Health Savings
Accounts (HSAs) will be increased to 20% (from 10%)
beginning January 1, 2011.
• For tax years beginning on or after January 1, 2011,
employees cannot purchase over-the-counter,
nonprescription drugs on a pre-tax basis.
• Reimbursements under a FSA or Health Reimbursement
Agreement (HRA) are permitted for health care expenses
of children until the end of the year in which a child turns
26.

21. 2. Statewide Health Insurance
Exchanges
• For companies with up to 100 employees.
• Starting in 2014, eligible companies can pool
buying power and purchase insurance through a
state exchange (no national exchanges).
• Provides more choice, lowers prices, and
increases small business bargaining power.
• Employers with employees nationwide must buy
separate policies from separate state exchanges
or participate with a “Health Care Choice
Compact” (beginning in 2016).

22. 1. Don’t Go It Alone…
• Get an insurance agent working for you and your
business (after all, that is what their commission is for!).
– An agent can keep you advised of developments and may help
you remain in complaint.
– An agent will likely be able to keep your costs down and assist
with size- and industry-specific plans and initiatives.
• Be proactive, not reactive.
– In addition to healthcare.gov, there are numerous other
resources (the IFA, SBA, trade organizations, websites, etc.) to
keep you up-to-date.
– Keep your employees informed.

23. Health Care Reform:
BONUS!
• A specific provision was created to address corporate
transparency.
• Designed to increase consumer confidence.
• Insurance companies must post financial data,
including balance sheets.
• Executive compensation must also be publicly
disclosed.

24. ANY QUESTIONS?