1. Kennebec Valley Chamber of Commerce
Wednesday, February 20, 2013
The Affordable Care Act
And Your Business
Mitchell Stein, Policy Director
Consumers for Affordable Health Care
“Advocating the right to health care for every
man, woman, and child”
1-800-838-0388 www.mainecahc.org

2. Agenda
• Introduction to Consumers for Affordable
Health Care
• The Affordable Care Act: The Basics
• Implementing the ACA: What Your Business
Needs to Know
www.mainecahc.org 2

3. Introduction to Consumers for
Affordable Health Care
www.mainecahc.org 3

4. MISSION STATEMENT
Consumers for Affordable Health Care is a Maine advocacy organization that
strives to ensure a strong consumer voice in decision making at all levels and
in all forums in order to advocate for a consumer-oriented health system in
Maine and the United States. Since 1988, Consumers for Affordable Health
Care has provided leadership and support to consumers, businesses,
organizations, and policymakers to specifically advocate for:
 Access to health care for all Maine residents including preventive,
acute, chronic and long-term care that is assured through health care
coverage
 Affordable health care coverage that is guaranteed for all Maine
residents, taking into account an individual’s ability to pay
 An individual's right to freely choose her or his provider and method
of care within the confines of quality care that is based on objective PO Box 2490
standards and supported by publicly available data on individual Augusta, ME 04338-2490
providers and hospitals
 Financing coverage from a broad variety of government and private
sources www.mainecahc.org
 Controlling rising costs while preserving quality care
Consumers for Affordable Health Care provides resources to educate Helpline
consumers and assist them in navigating the existing system.
1-800-965-7476
Consumers for Affordable Health Care works with other organizations to
educate them and to advocate our mission before legislative and regulatory
bodies.
www.mainecahc.org 4

5. About Consumers for Affordable
Health Care (CAHC)
 Non-profit, non-partisan mission driven
advocacy organization since 1988
 Consumer Assistance Program
 Policy Research and Advocacy
 Mission: To advocate the right to quality,
affordable health care for every man,
woman, and child in Maine.
www.mainecahc.org 5

6. Consumer Assistance Program
 HelpLine 1-800-965-7476
 Our statewide, toll-free Consumer HelpLine assists people who
need insurance or have been denied care
 Provides help finding programs to help with health care and drug
costs
 Help with Coverage Disputes
 Understanding your coverage and rights
 Help with denials, appeals or complaints
 On-line health care guide
 Workshops and presentations
 Train service professionals on MaineCare eligibility, private
insurance and non-insurance programs that can help people
www.mainecahc.org 6

7. Policy Advocacy
 Monitor Statehouse and Washington activities
 Speak on behalf of consumers at state level
 Represent consumers in rate review hearings
(and help consumers to represent themselves)
 Info we get thru our Helpline and Outreach
informs our policy and advocacy work; we often
are able to spot harmful trends
 Founding member of the Health Care for Maine
Alliance (HC4ME)
www.mainecahc.org 7

8. The Affordable Care Act:
The Basics
www.mainecahc.org 8

9. The ACA – Law of the Land
Supreme Court ruled:
 Individual Mandate is a constitutional exercise of
Congress’ power to tax
 Medicaid expansion violates Congress’ spending clause
power as unconstitutionally coercive of states
 Results in Medicaid Expansion being an option for each state instead of
mandatory for all states
www.mainecahc.org 9

10. What does the ACA do?
 Universal access to health coverage
 32 million uninsured Americans (est. by 2019)
 Expansions to public programs
 New Options for Individuals and Small Businesses
 Insurance Reform at the Federal Level
 Patients’ Bill of Rights
 Holding Insurance Companies Accountable
 Workforce Expansion and Quality Improvement
Provisions
10

11. What’s happened so far
 Young adult dependent coverage until age 26
 No pre-existing condition exclusions for children
 Interim coverage available for adults with pre-existing conditions
 New consumer protections (e.g. appeal rights, etc.)
 Medicare prescription drug coverage donut hole being plugged in
phases
 Small employer tax credits
 No cost preventive services
 End to recisions
 Ban on lifetime limits
 Phasing out of annual limit
 Standardized disclosure forms (SBC)
 And more…
11

12. And coming in 2014
 Minimum Credible Coverage Requirement: Mandate for Individuals
 Mandate for large employers (50 or more employees)
 Expanded Medicaid eligibility - incomes up to 133% FPL (dependent
on State participation)
 Health Insurance Marketplaces (Exchanges)
 Individual subsidies toward Premiums and Cost Sharing
 Additional Small Employer Tax Credits (through the Marketplace)
 Limits on Out-of-pocket spending
 One-stop shopping: consumer-friendly
 Navigators/Assisters
 Plan reforms
 Essential Health Benefits (both Marketplace and non-Marketplace plans)
 Rate Review
 Risk Adjustment Programs
 No more pre-existing condition exclusions for adults
 And more…
www.mainecahc.org 12

13. Marketplaces (Exchanges)
Supreme Court decision left Exchanges untouched
 An Exchange is a marketplace that provides a way to
compare and review choices in a consumer-friendly
format (now called marketplace)
 Marketplaces will offer a variety of plans for individuals
and small businesses
 Enrollment begins October 1, 2013!
 Coverage will begin for all new enrollees on January 1,
2014
 Enrollment annually or at “qualifying event”
www.mainecahc.org 13

14. Marketplaces (cont.)
 Maine will have a Federally-facilitated
Marketplace
 Two Marketplaces
 Individual Marketplace
 Small Business Health Options Program
(SHOP )
www.mainecahc.org 14

15. Marketplaces (cont.)
Individual subsidies will only be available through the
Marketplace. Who can get a subsidy?
 If NO access to employer coverage:
 Household income between 100 and 400% FPL
 If YES access to employer coverage:
 At or below 133% FPL and employer plan coverage less
than 60% of average expenses
 At or below 400% FPL and employer plan costs more than
9.5% of income
 Subsidy for individual coverage offered through Marketplace
Sample 2013 FPLs:
100% Single - $11,490, Family of 4 - $23,550
400% Single - $45,960, Family of 4 - $94,200
www.mainecahc.org 15

16. Marketplaces (cont.)
Who can help?
 Navigators
 Specific responsibilities outlined in law, including facilitating
enrollment in qualified health plans
 Must be at least two, one of which must be a nonprofit
 May target specific groups “most likely” to be in Marketplace
 Assistors (may not be available in all states)
 More flexibility in duties
 Not limited to type
 Can be used to reach any groups
 Brokers
 Awaiting further Federal regulations as well as clarification of state
regulation of Navigators
www.mainecahc.org 16

17. Essential Health Benefits (EHB)
 EHB is the minimum benefits all (insured) plans must cover (inside OR
outside the Marketplace)
 Each state had the ability to define their own EHB (at least for 2014 and
2015) from one of 10 possible benchmark plans
 10 Mandatory Categories of Coverage:
 Ambulatory patient services
 Emergency services
 Hospitalization
 Maternity and newborn care
 Mental health and substance use disorder services, including behavioral health treatment
 Prescription drugs
 Rehabilitative and habilitative services and devices
 Laboratory services
 Preventive and wellness services and chronic disease management, and
 Pediatric services, including oral and vision care
www.mainecahc.org 17

18. Implementing the ACA:
What Your Business
Needs to Know
www.mainecahc.org 18

19. Employer Specifics
I do want to caution that I’m not a broker, not an accountant
and not a lawyer – I’m a policy guy who can talk at a high
level about what’s coming. I will provide background
information but I am not able to suggest to you your best
option. I would strongly encourage you to talk to others
(broker, accountant and/or attorney) before making any
decisions.
www.mainecahc.org 19

20. Employer Specifics
Tax Credits
Two programs:
Currently available and available through the Marketplace in 2014
 For tax years 2010 through 2013, the maximum credit is 35 percent for small
business employers and 25 percent for small tax-exempt employers such as charities
 On Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively
(available only if you purchase coverage through the Marketplace)
 If you are a small business employer who did not owe tax during the year, you can
carry the credit back or forward to other tax years. Also, since the amount of the
health insurance premium payments are more than the total credit, eligible small
businesses can still claim a business expense deduction for the premiums in excess
of the credit
 For tax-exempt employers note that the credit is refundable, so even if you have no
taxable income, you may be eligible to receive the credit as a refund so long as it
does not exceed your income tax withholding and Medicare tax liability.
www.mainecahc.org 20

21. Employer Specifics
Tax Credits (cont.)
Can you claim the credit?
 To be eligible, you must cover at least 50 percent of the cost of single (not family)
health care coverage for each of your employees. You must also have fewer than 25
full-time equivalent employees (FTEs). Those employees must have average wages
of less than $50,000 a year
 What is a full-time equivalent employee?
 Calculate the number of full-time equivalents by dividing the total annual hours of
part-time employees by 2080
 What are average wages? If you pay total wages of $200,000 and have 10 FTEs.
 To figure average wages you divide $200,000 by 10 – the number of FTEs – and
the result is your average wage. The average wage would be $20,000
 The amount of the credit you receive works on a sliding scale. The smaller the
business or charity, the bigger the credit. So if you have more than 10 FTEs or if the
average wage is more than $25,000, the amount of the credit you receive will be less
http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers
www.mainecahc.org 21

22. Employer Specifics
Employer Responsibility
Employer responsibility for offering coverage to full-time
employees if have 50+ full time equivalent employees
 Full-time is defined as 30+hours a week
 Equivalents are determined based on total number of
hours by part-time employees each month and dividing
by 120
 Paid hours include paid vacation days, sick days, etc.
 Employers use 2013 data to determine 2014
responsibility
www.mainecahc.org 22

23. Employer Specifics
Employer Responsibility (cont.)
 Transitional relief – may use any consecutive 6 month
period in 2013 to determine 50+ status
 Seasonal employees don’t count
 Guidance does not define seasonal – for at least 2014
employers may use any reasonable good-faith interpretation of
that term (this represents a positive change in Maine where the
proposed definition of 120 days did not cover our tourist
“season”)
 Can use proposed rules to make decisions, won’t be
penalized in 2014 if final rules are different
www.mainecahc.org 23

24. Employer Specifics
Employer Responsibility (cont.)
 If have 50+ full time equivalents, penalty if:
 Does not offer coverage to full-time employees
 Coverage offered is not sufficient: Less than 60% actuarial value
 Coverage is unaffordable: EE responsibility 9.5% income or
more for individual coverage
 Companies with common owners or are otherwise
related must be combined for determining 50+ full time
equivalents
 If state elects to participate in Medicaid (MaineCare)
Expansion and employee enrolls there is no penalty
www.mainecahc.org 24

25. Employer Specifics
Additional Items
 Medical Loss Ratio (MLR) Rebates
 First ones mailed in July 2012, distribution depends
on who pay the premium (employer or employee)
 Summary of Benefits and Coverage (SBC)
 For insured plans should be created by insurer and
given to ER to distribute
 Applies to all individual and group plans (no exception
for grandfathered plans)
www.mainecahc.org 25

26. Employer Specifics
Additional Items (cont.)
 New hire waiting period cannot exceed 90 days (all
plans, grandfathered or not)
 W2 disclosure of benefit costs beginning January 2013
(for 2012 year)
 If issued less than 250 W2s in January 2012, exempt
in 2013
 Note this is NOT taxable income. For informational
purposes only
www.mainecahc.org 26

27. Employer Specifics
Additional Items (cont.)
 Flexible Spending Account (FSA) limit of $2,500
including Health and Dependent Care FSAs. HRA and
HSA not impacted by new limit (begins in 2013)
 Medicare Tax Increase for income over $200,000 for
individuals and $250,000 for joint filers
 Patient Centered Outcomes Research Institute Fee (First
annual fee payable by July 2013 )
 First year, $1 per covered life, second year $2 per
covered life, thereafter the $2 is indexed for Medical
Inflation
www.mainecahc.org 27

28. Employer Specifics
Additional Items (cont.)
 Notice of Marketplace Options (originally scheduled for
March 2013 but delayed until late summer early fall to
correspond with publicity around Marketplace enrollment
period)
 Simple Cafeteria Plans (2014 plan year)
 Congress amended the Internal Revenue Code to
allow eligible employers' cafeteria plans to qualify as
simple cafeteria plans. Simple cafeteria plans are
treated as meeting certain nondiscrimination
requirements and benefits for cafeteria plans making
the process simpler.
www.mainecahc.org 28

29. Employer Specifics
To offer or not to offer, that is the question
A few things to consider when deciding whether or not to offer health coverage:
 Employer’s cost
 The coverage offered is tax deductible to the employer
 The penalty paid is not tax deductible to the employer
 Potential need to increase salary to compensate for the reduction in total compensation
 Employee’s cost
 The cost of individual coverage is NOT tax deductible to the employee (as opposed to their contribution to
employer coverage which is tax deductible)
 Coverage might be more expensive than their employer coverage is now, especially if they are not eligible
for subsidies
 What is the competition doing
 Impact of decision in attracting and retaining employees
www.mainecahc.org 29

30. For More Information:
Consumers for Affordable Health Care:
http://www.mainecahc.org/ACA/updates.htm
HealthCare.Gov: http://www.healthcare.gov/
Department of Labor FAQs: http://www.dol.gov/ebsa/faqs/
IRS: http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions
Kaiser Family Foundation: http://healthreform.kff.org/
www.mainecahc.org 30

31. Questions?
Consumers for Affordable Health Care
Ph: 1-800-838-0388
HelpLine: 1-800-965-7476
Web: http://www.mainecahc.org
“Like” us on Facebook
Read our blog: http://mecahc.blogspot.com/
Follow us on Twitter: @MAINECAHC
www.mainecahc.org 31

32. Thank You!
www.mainecahc.org 32