Presentation on the Patient Protection Affordable Health Care Act given to Independent NAPA Auto Care Center Owners at the Detroit Area Conference on September 14, 2013 by Gary Wheeler

1. Patient Protection Affordable Health Care Compliance
Gary Wheeler
HR Manager for Small Business

2. Reform Related Taxes & Fees
What When Who Pays How Much
Comparative Effectiveness
Research Fee
Plan/policy years ending 10/1/2012 Insurers of fully insured plans;
sponsors/administrators of self-insured
plans
$1 per person per year; adjusted for
subsequent years
Reinsurance
Assessment
1/1/2014 Issuers of fully insured plans Estimated at $5.25 per person per month
Tax on high
earners
Tax year beginning 1/1/2013 Individuals .9% increase on Medicare, in excess of
$200k single/$250k married
Tax on unearned
income
Tax year beginning 1/1/2013 Individuals 3.8% on unearned income in excess of
$200k single/$250k married
Insurer Fees Tax year beginning 1/1/2014 Issuers of fully insured plans Estimated at 2.46% of premium, plus
state fee
High-cost
insurance tax
Tax year beginning 1/1/2018 Insurers of fully insured plans;
sponsors/administrators of self-insured
plan
40% on plan costs exceeding “Cadillac”
thresholds

3. Obama Care
 Everyone must have coverage by 2014
 Individuals must purchase health insurance
for themselves (if not in 50+ plus)
- “Individual Mandate”
 Entrepreneurs must purchase health
insurance for themselves
- “Individual Mandate”
 Organizations with 50 or more full-time
equivalents must purchase health insurance
for their employees (delayed by Obama 2015)

4. Business Owners Must Understand The Options
 Understand employee options
 Understand business under 50-employee options
 Understand business over 50-employee options
 Become the authority to be able to point your employees in the right direction

5. Individual Mandate
 What are employee options?
1. Employer-sponsored coverage
2. Individual coverage
 Individual market exchange
 „Off „ exchange
3. No coverage – pay the penalty

6. The Public Exchange/Marketplace
 Individuals who buy a policy from the public exchange may be eligible for credits and subsidies
- Income range from 133% to 400% Federal Poverty Level (FPL)
 Individual: $14,856 to $44,680
 Family of four: $30,6565 to $92,200
- Employer coverage does not meet minimum coverage or no employer coverage
- Credits – for any level plan
- Cost-Sharing Subsidies – Silver Plan only
 Public exchange plan opening enrollment begins 10/1/13

7. No Coverage – Penalties for Individuals
 2014
- Greater of $95 or 1% of taxable income
- $95 + $47.50 per child – cap $285 per family
- Employee making $35,000 per year will pay $350
 2015
- Greater of $325 or 2% of taxable income
- Employee making $35,000 per year will pay
 2016
- Greater of $695 or 2.5% of taxable income
- Employee making $35,000 per year will pay
 2017 and beyond
- Annual adjustments

8. Subsidy
 Single and income is between $11,500 – 46,000
 Family of four (4) and income is between $23,550 – $94,200
 Out of pocket health care costs possible assistance
- Single $28,725
- Family of four (4) $58,875

9. Essential Health Benefits
 Ambulatory patient services
 Emergency services
 Hospitalization
 Laboratory services
 Maternity & newborn care
 Mental health & substance abuse disorder services
 Pediatric services, including oral & vision care
 Prescription drugs
 Preventive & wellness services and chronic disease management
 Rehabilitative and habilitative services and devices

10. Small Businesses Options
Employers who have less than 50 employees:
 Offer a fully insured plan through either:
- SHOP Exchange (delayed to 2015)
- Non-exchange market
 Offer an ASO (administrative services only)
- Self-funded
 Stop offering coverage
- Employees go to exchange
 Offer “non-affordable” coverage
- Employees go to exchange

11. Under 25 Tax Credits
 Small Business Health Care Tax Credits
 The small business Health Care Tax Credit helps small employers afford the cost of health
care coverage for their employees and is specifically targeted for those employers with low-
and moderate-income workers.
 The credit is designed to encourage small employers to offer health insurance coverage for
the first time or maintain coverage they already have.
 Since 2010, businesses that have fewer than 25 full-time equivalent employees (FTEs), pay
average annual wages below $50,000, and that contribute 50% or more toward employees‟
self-only health insurance premiums may qualify for a small business tax credit of up to 35%
to help offset the costs of insurance.

12. Tax Credits cont.
 Small Business Health Care Tax Credits
 In 2014, this tax credit goes up to 50% and is available to qualified small employers that
participate in the Small Business Health Options Program (SHOP).
 Eligible small employers can claim the current credit through 2013, and the enhanced credit
can be claimed for any two consecutive taxable years beginning in 2014 through the SHOP.
 Currently the shop is not available – but TALK WITH YOUR CPA – there may be options.

13. Under 25 Health Options
 Starting in 2014 (delayed 2015), small employers with generally up to 50 employees will
have access to the new health care insurance marketplaces through the Small Business
Health Options Program (SHOP).
 Currently, small businesses may pay on average 18% more than big businesses for health
insurance because of administrative costs.
 SHOP will offer small employers increased purchasing power to obtain a better choice of
high-quality coverage at a lower cost.
 Costs are lowered because small employers can pool their risk.

14. Under 25 Health Options cont.
 To enroll, eligible employers must have an office within the service area of the SHOP and
offer SHOP coverage to all full-time employees.
 In 2016, employers with up to 100 employees will be able to participate in SHOP.
 Health and Human Services recently launched a new Call Center specifically to serve small
businesses with 50 or fewer employees interested in the SHOP Marketplace.
 For more information, call 1-800-706-7893 (TTY users: 1-800-706-7915) from Monday
through Friday, 9 a.m. to 5 p.m. EST.

15. Workplace Wellness Programs
 The Affordable Care Act creates new incentives to promote employer wellness programs
and encourage employers to take more opportunities to support healthier workplaces.
 Health-contingent wellness programs generally require individuals to meet a specific
standard related to their health to obtain a reward, such as programs that provide a reward
to employees who don‟t use, or decrease their use of, tobacco, and programs that reward
employees who achieve a specified level or lower cholesterol.
 Under final rules that take effect on January 1, 2014, the maximum reward to employers
using a health-contingent wellness program will increase from 20 percent to 30 percent of
the cost of health coverage.

16. Workplace Wellness Programs cont.
 Additionally, the maximum reward for programs designed to prevent or reduce tobacco use
will be as much as 50 percent.
 The final rules also allow for flexibility in the types of wellness programs employers can offer.
For more information and to view the final rules, visit www.dol.gov/ebsa.

17. Flex Spending Accounts
 For plan years beginning on or after January 2013, the maximum amount an employee may
elect to contribute to health care flexible spending arrangements (FSAs) for any year will be
capped at $2500, subject to cost-of-living adjustments.
 Note that the limit only applies to elective employee contributions and does not extend to
employer contributions.

18. LARGE BUSINESS (OVER 50)
 Effective January 1, 2014, (Now 2015) any business with 50 or more
employees will have to offer health care or pay penalty
- Penalty starts at $40,000
- Increases $2000 for each additional worker over 50

19. Plan Requirements
 Plan must cover 60% of health care expenses
 Must cost employee less than 9.5% of his/her family salary
 If coverage deemed substandard, penalty goes to $3,000/employee

20. MINIMUM ESSENTIAL PENALTY
 If a “large” employer does not offer “minimum essential” health benefits to their full-time
employees, they may be required to pay a penalty
 If a plan is offered, but it does not meet the coverage levels required, they may be required to
pay a penalty
 If a plan is offered, but “unaffordable”, they may be required to pay a penalty

21. Over 50 Notice to Employees
 Under the Affordable Care Act, employers covered by the Fair Labor Standards Act
(generally, those firms that have at least one employee and at least $500,000 in annual
dollar volume of business):
 Must provide notification to their employees about the new Health Insurance Marketplace;
inform employees that they may be eligible for a premium tax credit if they purchase
coverage through the Marketplace;
 Advise employees that if they employee purchase a plan through the Marketplace, they may
lose the employer contribution (if any) to any health benefits plan offered by the employer.

22. Over 50 FTE’s (Considered Large Employer)
 Calculating the number of full-time and full-time equivalent employees (FTE‟s)
- Example: 40 full-time and 20 part-time equates to 50 FTE‟s
- New stuff! – full-time with respect to Obama Care is 30-hours per week
- Businesses are making adjustments to ensure part-time employees not exceed 29.5 hours per week
- Recommend part-time equate to 20 to 25-hours per week
 If you have multiple corporations/LLC‟s, companies, etc.
- Take the aggregation of common ownership

23. Employer “Play or Pay” Mandate
 Employers with 50+ employees who DO NOT offer coverage:
- At least 1 employee obtains subsidized coverage from health insurance exchange
 Fee equal to $2,000 X the number of full-time employees minus the first 30 employee
- Employers with 50+ employees who DO offer coverage, but coverage is not “affordable”
 Assessment of $3,000 X the number of employees receiving subsidized coverage
 “Affordable” defined as employee‟s share of the premium is greater than 9.5% of income for
employee only coverage

24. Large Employer Considerations
 Calculating the number of full-time and full-time equivalent employees (FTEs)
 Aggregation of common ownership
 Automatic Enrollment for employers with 200+ FTEs – delayed for 2014
 Minimum essential coverage
- Plan coverage must provide minimum value at least 60% of the total allowed cost of
benefits that are expected to be incurred under the plan
- HHS/IRS will provide a calculator to determine minimum value

25. Required Employee Communication
 Under the Affordable Care Act, employers covered by the Fair Labor Standards Act
(generally, those firms that have at least one employee and at least $500,000 in annual
dollar volume of business), must provide notification to their employees about the new
Health Insurance Marketplace;
 Inform employees that they may be eligible for a premium tax credit if they purchase
coverage through the Marketplace;
 And advise employees that if they employee purchase a plan through the Marketplace, they
may lose the employer contribution (if any) to any health benefits plan offered by the
employer.

26. Required Employee Communication cont.
 Employers are required to provide this notice to all current employees by October 1, 2013,
and to each new employee at the time of hire beginning October 1, 2013, regardless of plan
enrollment status (if applicable) or of part-time or full-time status.
 The Department of Labor has provided employers with two sample notices they may use to
comply with this rule.

27. QUESTIONS?

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33. Gary Wheeler
gary@thevirtualhrdirector.com
678-997-0017
http://www.thevirtualhrdirector.com
Questions