2. Turn on the Light
Health Care Reform
Agenda
Welcome
Health care reform fundamentals
Small business credit and retiree subsidy
Coverage mandates – all plans
Coverage mandates – non-grandfathered plans
Administrative requirements
Taxation and revenue
Enforcement
We will not address many issues, such as those
relating to Medicare and Medicaid.
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3. Health Care Reform
The PPACA and the HCERA
The Patient Protection and Affordable Care Act (“PPACA” -
HR 3590)
signed by President Obama on March 23, 2010
The Health Care and Education Reconciliation Act of 2010
(“HCERA” - HR 4872):
signed by President Obama on March 30, 2010
General provisions:
individual responsibility for obtaining health coverage
employer penalties for failing to provide and contribute to
the cost of coverage for employees.
Employers are prohibited from discriminating against or
terminating employees who receive subsidized coverage.
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4. Health Care Reform
Fundamentals
Large employer:
During the prior year, had an average of 50 or more full-
time employees, as determined on a controlled group
basis, based on full-time equivalents (FTE).
Full-time equivalents are calculated by adding the total
hours worked in a month by employees, other than full-
time employees, and dividing by 120.
Seasonal workers may be excluded under certain
circumstances for some requirements.
Full-time employees:
Employees who perform, on average, at least 30 hours of
service per week.
A different definition applies for the small employer credit.
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5. Health Care Reform
Fundamentals
Grandfathered plan:
A plan in effect on March 23, 2010
Includes all new employees and family members who
enroll in the plan regardless of date-of-hire
Uncertain what would cause loss of status
Collectively-bargained plans are grandfathered until the
date of which the last agreement relating to the grand-
fathered coverage terminates.
A grandfathered plan is:
permanently exempt from some but not all coverage
mandates but
is not exempt from the law’s new taxes and IRS reporting
requirements.
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6. Health Care Reform
Fundamentals – Compliance by January 1, 2014
Each State will also be required to establish an American
Health Benefit Exchange (‘‘Exchange’’) to:
facilitate the purchase of qualified health plans;
establish a Small Business Health Options Program
(‘‘SHOP Exchange’’) to assist small employers in the
enrollment of employees in small group health plans;
meet requirements, such as for:
rating, certifying and providing qualified health plans;
providing toll-free telephone hotlines and a website
certifying exemptions from individual mandate taxation.
Employers must give notices to employees by 3/1/2013:
to provide information about the state Exchanges;
notify if the health plan’s benefits is less than 60%;
availability of a tax credit and free choice vouchers.
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7. Health Care Reform
Fundamentals – Compliance by January 1, 2014
States must establish a SHOP Exchanges by 2014:
Small businesses will be businesses with 100 or fewer
employees, although states may limit pools to companies
with 50 or fewer employees through 2016.
Small businesses will be able to pool together to buy
health insurance.
The SHOP Exchange will assist qualified small employers
in enrolling employees in qualified health plans;
Companies that grow beyond the size limit will also be
grandfathered.
The CBO predicts that the SHOP Exchanges will:
reduce premiums between 1% and 4% and
increase coverage by up to 3%.
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8. Health Care Reform
Fundamentals
Essential health benefits package is a health plan that:
1. provides coverage for medical services typically covered
in a group health plan;
2. limits cost-sharing and deductibles to specified amounts;
3. provides a bronze, silver, gold or platinum level of
coverage as defined by the Act (“determined by the
actuarially equivalent percentages of the full actuarial
value of the benefits provided”).
Coverage under a group or individual health plan:
will satisfy requirements for individuals to be covered for
purposes of the “Individual Mandate” but
employers must satisfy additional requirements for
group health plan to qualify as minimum essential
coverage to avoid a “Free Rider” excise tax.
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9. Turn on the light
Compliance
2010 Small employer tax credit
and
Early retiree subsidy
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10. Health Care Reform
Small employer tax credit
Small employers that contribute health coverage premiums
for employees may be entitled to a tax credit:
from 2010 through 2013 with
an “enhanced” version of the credit beginning in 2014.
To qualify, an employer must:
have fewer than 25 full-time employees (FTE) for the tax
year (50 half-time employees will satisfy requirement);
pay average annual wages below $50,000; and
pay a uniform percentage of employee-only premiums (at
least 50%) for all employees (a “qualifying arrangement”).
Tax-exempt organizations are also entitled to the credit,
subject to special rules for calculating the credit.
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11. Health Care Reform
Small employer tax credit
To determine the number of full-time employees (“FTE”):
add the total number of hours of all full and part-time
employees (but not more than 2,080 hours per employee);
divide by 2,080; and
round down to the next whole number.
Average wages:
divide the total amount of wages (as defined for FICA
purposes) during the tax year by
the number of FTEs and
round down to the nearest $1,000
Do not include:
hours worked by owners or their family members or
seasonal workers who worked during 120 days or less.
Count all employees of a controlled group of companies.
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12. Health Care Reform
Small employer tax credit
Maximum Credit:
35% of the premium paid by a small business
increasing to 50% on January 1, 2014, but
the premium paid may not exceed the average small
group market premium in the state as published by HHS.
For tax-exempt organizations
25% of the premium paid
increasing to 35% on January 1, 2014, but
capped by the total amount of income and Medicare tax
withheld from employees’ wages and the employer’s
share of Medicare taxes.
The credit phases out proportionately for employers with
average wages between $25,000 and $50,000 and for
companies with between 10 and 25 FTEs.
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13. Health Care Reform
Small employer tax credit - Examples
Employer 1:
has 10 employees and pays total wages during the 2010
tax year of $250,000 ($25,000 per worker)
pays $70,000 in health insurance premiums for employees
Tax credit is $24,500:
35% of $70,000
Employer 2 (phase out for more than 10 FTEs):
32 half-time employees (the equivalent of 16 FTEs) and
pays total wages of $400,000 ($25,000 per FTE) in 2010
pays $192,000 in employee health insurance premiums
Tax Credit is $40,320:
$192,000 x 35% = $67,200. Credit reduction is 6/15 = 40%
(FTEs over 10 divided by 15) times $67,200 = $26,880.
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14. Health Care Reform
Small employer tax credit
The tax credit is claimed on the employer’s tax return:
no credit without taxable income (unless tax-exempt);
quarterly estimated tax payments may consider the credit;
deductions for health insurance premiums must be
reduced by the amount of the tax credit; and
the employer may not reduce withheld income tax and
FICA in anticipation of the credit.
Anticipated transition relief for tax year beginning in 2010:
1. the requirement of paying a uniform percentage of the
premium for all employees will not be enforced if
2. the employer pays at least 50% of the employee-only
coverage even if the employee is actually receiving two-
party or family coverage.
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15. Health Care Reform
Temporary early retiree reinsurance
Temporary $5 billion early retiree health coverage subsidy:
Reimburses participating employers for portion of health
insurance cost for retirees age 55/older. Reimbursement:
may offset employer’s or retiree’s costs
is 80% of claims between $15,000 and $90,000 (indexed)
excludible from gross income of participating employer
Definition of “claims” for this purpose is uncertain.
Employers should apply to participate as soon as the
application process is announced by HHS:
sunsets in 2014 or when appropriation is exhausted, if
earlier
The program is required to open not later than 90 days after
March 23, 2010.
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16. Turn on the light
Group health plans
Coverage mandates
Grandfathered and non-grandfathered
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17. Coverage mandates - First plan year after 9/23/10
All plans - grandfathered and non-grandfathered
Prohibits maximum lifetime benefit:
Lifetime limits will be prohibited on the dollar value of
“essential health benefits” for any participant or
beneficiary.
“Essential health benefits” will be defined by HHS.
Wellness plans:
may not require or collect information about the
presence of firearms and
may not base premiums, discounts, rebates or rewards
on the basis of ownership of firearms or ammunition.
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18. Coverage mandates - First plan year after 9/23/10
All plans - grandfathered and non-grandfathered
Rescission of coverage:
is prohibited except for fraud or intentional
misrepresentation of a material fact but
is permitted for nonpayment of premium or termination of
the plan but only upon prior notice.
Internal and external claims and appeals:
Currently required for ERISA plans.
Plan must establish external review process that complies
with state law for insured plans or DOL regulations for
self-funded plans.
Employees must be given a notice of review processes and
the availability of appeals assistance through insurance
divisions and an ombudsman’s office.
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19. Coverage mandates - First plan year after 9/23/10
All plans - grandfathered and non-grandfathered
Emergency services:
Must be covered by plan without prior authorization even
for treatment from a non-participating provider, and
Benefits must be subject to the same cost-sharing
provisions as in-network services.
Preexisting condition exclusions and limitations are
prohibited:
First plan year after 9/23/10 for children under age 19 in
non-grandfathered and grandfathered plans.
First plan year in 2014 for grandfathered plans.
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20. Coverage mandates - First plan year after 9/23/10
All plans - grandfathered and non-grandfathered
Coverage must be made available to participant’s children
until age 26, even if married:
Applies only if the plan offers dependent coverage.
Not clear if child must be financially “dependent” on
participant — HHS will provide regulations.
Coverage not required for a grandchild or the spouse of a
child.
Effective dates:
First plan year after 9/23/10 for non-grandfathered and
grandfathered plans for children who are not eligible to
enroll in another employer-provided plan.
First plan year in 2014 for grandfathered plans.
Fair market value of adult child’s coverage is not taxed to
employee if child is age 26 or under at year’s end.
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21. Coverage mandates - First plan year in 2011
All plans - grandfathered and non-grandfathered
Reimbursements through Health FSAs, Health Savings
Accounts and health reimbursement arrangements:
will be prohibited for non-prescription, over-the-counter
drugs and medicines unless prescribed.
The excise tax for non-qualified withdrawals from an HSA:
will increase from 10% to 20%
Archer MSAs: will increase from 15% to 20%
Adoption assistance:
The adoption tax credit has been extended until the end of
2011 and
increased $1,000 to $13,170 for adoptions occurring
retroactive to January 1, 2010.
The credit is refundable.
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22. Coverage mandates - First plan year in 2013
All plans - grandfathered and non-grandfathered
Health FSA elections:
will be capped at $2,500, indexed to CPI
cap will apply in the aggregate to all cafeteria plans
offered by employer
Cap does not apply to HRA or FSA that is not part of a
salary reduction arrangement under a cafeteria plan
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23. Coverage mandates - First plan year in 2014
All plans - grandfathered and non-grandfathered
Annual limits will be prohibited:
will be prohibited on “essential health benefits”
HHS will specify permitted annual limits on dollar value of
coverage for “non-essential health benefits”
HHS will set “restricted limits” to ensure that access to
needed services is made available with a limited impact
on premiums.
Wellness plans:
The maximum annual award in wellness plans
will be increased from 20% to 30% of the cost of coverage
with the Secretary’s discretion to increase to 50%.
Prohibits waiting periods greater than 90 days.
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24. Coverage mandates - First plan year after 9/23/10
Applicable only for non-grandfathered plans
Selection of primary care provider:
Participant may designate any available PCP
including a pediatrician for a child or an Ob-Gyn for a
female participant.
Direct access to Ob-Gyn without preauthorization or
referral is required.
Plans must provide preventive care with no cost-sharing:
services recommended by US Preventive Services;
immunizations recommended by CDC;
preventive care and screenings (e.g., breast cancer
screening, mammography) recommended by Health
Resources and Services Administration.
HHS may provide additional recommendations.
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25. Coverage mandates - First plan year after 9/23/10
Applicable only for non-grandfathered plans
IRC §105(h) nondiscrimination will apply to insured plans:
Current rules for self-funded plans inhibit favoring highly-
paid employees as to eligibility or benefits
Penalty for violation will be $100/day/participant.
Plans must establish internal and external appeals process:
to provide notice to enrollees of internal and external
appeals processes and availability of health insurance
consumer or ombudsman assistance; and
to allow enrollees to review their file, present evidence
and testimony and receive coverage during appeals.
Plans must establish an external review process:
in compliance with state law for insured plans or
DOL regulations for self-funded plans.
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26. Coverage mandates - First plan year after 1/1/2014
Applicable only for non-grandfathered plans
Endorses HIPAA’s rules:
prohibiting discrimination based on health status and
for wellness plans.
Prohibits employee cost-sharing requirements:
that exceed the limits for high deductible health plans in
2014.
These limits will be raised annually.
Participating providers:
prohibits discrimination against any health provider who
wishes to be a participating provider
so long as the provider is acting within the scope of the
provider’s license or certification under state law.
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27. Turn on the light
Group health plans
Administrative requirements
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28. Health Care Reform – Uncertain effective date
Administrative requirements
Automatic enrollment under The Fair Labor Standards Act:
Employers with more than 200 FTEs must:
automatically enroll new FTEs
subject to permitted waiting periods
Employers must provide notice and opt-out opportunity.
State payroll laws preempted to permit auto-enrollment.
Applies to grandfathered plans.
Regulations explaining this requirement will be published.
Note regarding optional Long Term Care program:
Effective 1/12011 the “CLASS” program, which stands for
“Community Living Assistance and Supports”, will begin.
Employers who choose to participate must automatically
enroll employees and administer payroll deductions.
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29. Health Care Reform – First plan year after 9/23/10
Administrative requirements
Transparency Reporting - Group health plans must report:
claims payment policies and practices;
periodic financial disclosures including rating practices,
enrollment and disenrollment data and claim denials
cost-sharing data for out-of-network coverage
information on Health Care Reform participants’ rights
and other information required by the regulators.
The information must be provided:
to Health and Human Services;
state insurance commissioners; and
must be made available to the public.
The GAO may also require data to assist its study of
coverage denials and reversals of denials.
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30. Health Care Reform – Probably effective in 2012
Administrative requirements
Quality of Care reports to improve health outcomes:
Group health plans will be required to make annual
quality-assurance reports to HHS and participants during
open enrollment
describing their criteria for:
improving outcomes,
reducing hospital readmissions,
reducing medical error,
designing and implementing wellness programs.
Group health plans will also be required to submit annual
reports to HHS describing the success of their criteria.
Compliance required after HHS publishes regulations which
are expected within two years from March 23, 2010.
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31. Health Care Reform – Probably effective in 2012
Administrative requirements
Explanation of Coverage – HHS will develop standards:
for group health plan and health insurer notices;
to provide information in notices according to standards
for terminology, language and content.
EOCs are in addition to Summary Plan Descriptions:
a summary of the coverage, cost-sharing and exclusions;
insurer or administrator obligations and requirements;
renewability and continuation provisions;
whether or not the plan provides minimum essential
coverage and covers at least 60% of covered services;
examples of common benefit scenarios; and
consumer assistance information.
Compliance required within 24 months from 3/23/2010.
Penalty for noncompliance - $1,000/participant.
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32. Health Care Reform – Probably effective in 2012
Administrative requirements
Notice of upcoming “material modification” in coverage:
must be provided to participants not later than 60 days
before effective date of modification
required in addition to Summary of Material Modification
Effective date and penalties for noncompliance apparently
the same as for “Uniform Explanation of Coverage”.
Government report is due within one year from 3/23/2010:
about costs, overhead, efficiency, claim denials and
limited benefit packages;
economic plan fluctuations; and
potential employer-enrollee conflicts of interest
Self-funded health plans will be probably be required to
provide information to the DOL and HHS.
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33. Turn on the light
Group health plans
Taxation and revenue
requirements and changes
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34. Health Care Reform
Taxation and revenue effective in 2010
Medicare Part D subsidy accounting adjustment:
employers who provide retiree prescription benefits that
are actuarially-equivalent to Medicare Part D coverage
have been entitled to receive 28% of covered charges
between $250 and $5,000 per Medicare-eligible participant.
Previously, the subsidy amount was deductible.
However, the deduction is being eliminated in 2013, so
employers must probably amend financial statements.
$500,000 cap on business expense tax deduction for health
insurance company employee salaries:
effective the first plan year after 12/31/2012
and for deferred compensation received on/after 1/1/2010
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35. Health Care Reform
Taxation and revenue effective in 2010
Non-taxable employer-provided Adoption Assistance:
Increases nontaxable maximum adoption assistance in
2010 to $13,170 (a $1,000 increase), but
after 2011, the adoption assistance exclusion will only be
a $6,000 credit for special-needs children with no income
exclusion.
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36. Health Care Reform – Effective in 2011
Tax and revenue requirements
W-2s:
Employers must report the aggregate cost of coverage
provided by the employer on W-2s.
This is intended to inform employees of the value of their
coverage.
1099s:
Currently only required for non-corporate service
providers.
Employers will be required provide a form 1099 for all
corporate service providers paid more than $600 per year.
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37. Health Care Reform - Effective in 2012
Taxation and revenue requirements
Temporary Fee for each Participant will be assessed:
on insured plans and sponsors of self-funded plans
to fund Patient Centered Outcomes Research Trust Fund
for study of comparative effectiveness.
The fee will be:
$1 in the plan year ending in 2013
$2 in the plan year ending in 2014 and
indexed after 2014 (under a complex formula)
The fee:
does not apply to coverage for accident, disability and
limited scope vision and dental and
will not apply for plan years ending after 9/30/2019.
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38. Health Care Reform - Effective in 2013
Taxation and revenue requirements
High-Income employees Medicare tax:
The employee portion of the hospital insurance tax part of
FICA increases from 1.45% to 2.35% of wages over:
$200,000 for single filers and
$250,000 for a joint return or surviving spouse
An additional tax of 3.8% will be imposed on unearned
income of high-income employees
such as interest, dividends, royalties, annuities and rent
and for some investment income for estates and trust.
This tax does not apply:
to the employer portion of the Medicare tax
non-resident aliens or
a tax-exempt charitable trusts.
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39. Health Care Reform - Effective in 2013
Taxation and revenue requirements
Medical expense itemized deductions:
The threshold for the itemized deduction for
unreimbursed medical expenses will increase from 7.5%
of adjusted gross income to 10% of AGI for regular
income tax purposes.
Exception for seniors:
if either the taxpayer or the taxpayer’s spouse turns 65
during the tax years of 2013 through 2016,
the threshold will remain at 7.5% for the tax years in which
they turn 65 through 2016.
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40. Health Care Reform - Effective in 2014
Taxation and revenue requirements
Premium Assistance Credit - Individuals (single or joint) are
eligible for a credit under the new IRC §36B if:
their household incomes are between 100% and 400% of
the federal poverty level (FPL) as of the tax year ending
two years prior to the enrollment period and
they do not receive health insurance through an employer
or a spouse’s employer.
The credits:
may be used to help purchase health insurance through a
state health benefit exchange and
are based on the percentages of income the cost of
premiums represents, from 2% of income for those at
100% of FPL to 9.5% of income for those at 400% of FPL.
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41. Health Care Reform – Takes effect in 2014
Individual coverage mandate and excise tax
Excise Tax on Uninsured Individuals (“Individual Mandate”):
U.S. citizens and legal residents must have minimum
amounts of qualifying health insurance coverage.
Noncompliance not be subject to liens, seizures or criminal
penalties.
Failure to maintain minimum essential coverage subject to a
phased-in penalty from $95 in 2014 to $695 in 2016 up to a
maximum of $2,085 (family) or 2.5% of income.
One-half penalty for uninsured individuals under 18.
After 2016, the penalty will be indexed for inflation.
Exemptions will be granted for financial hardship, religious
objections, native Americans, periods of non-coverage of
less than 3 months, some immigrants and the incarcerated.
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42. Health Care Reform – Takes effect in 2014
Individual coverage mandate and excise tax
Large employers must file a return to report information to
HHS to assist in enforcing the individual mandate:
the employer’s name, date and EIN
whether employees were offered coverage, length of
waiting period, lowest cost option, actuarial value, etc.
certification that the employer offers group health
coverage to full-time employees and dependents plus:
waiting period
the monthly premium for the lowest cost option
the employer’s share of the total costs of benefits
the number of full-time employees for each month
during the calendar year,
each full-time employee’s name, address, and TIN.
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43. Health Care Reform – Takes effect in 2014
Individual coverage mandate and excise tax
The employer must give a written statement to individuals
listed on the return to provide the following information :
the name and address or the employer and the telephone
number of the employer’s contact person, and
the information that was reported.
The written statement must be provided to the employee by
January 31 of the following year in which the information
was reported.
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44. Health Care Reform - Effective in 2014
Taxation and revenue requirements
Free Rider tax penalty assessed on large employers (no
exemption for seasonal employees) who:
do not offer group health coverage for FTEs,
offer unaffordable minimum essential coverage, or
offer minimum essential coverage in which the plan’s
share of total allowed cost of benefits is less than 60%
who have at least one full-time employee who is
certified as enrolled for coverage in an Exchange and
eligible for IRC §36B tax credit or cost-sharing reduction
Eligibility for §36B tax credit or a cost-sharing reduction:
a. individual’s household income is less than 400% of
federal poverty line (FPL) for “cost sharing reduction”, or
b. is eligible for trade adjustment assistance or meets
certain other requirements for “IRC §36B tax credit”
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45. Health Care Reform - Effective in 2014
Taxation and revenue requirements
The Free Rider tax penalty will be assessed on the
employer:
If the employer offers group health coverage to an
individual with a family income up to 400% of FPL and
the actuarial value is less than the 60% threshold or
any employee’s required premium is greater than 9.5% of
the employee’s household income (thus entitling the
employee to a tax credit)
The Free Rider tax penalty will be a monthly penalty which
is the lesser of:
$2,000 per FTE/year excluding the first 30 employees or
$3,000 times the number of employees receiving the tax
credit
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46. Health Care Reform - Effective in 2014
Taxation and revenue requirements
Free Choice vouchers must be provided by employers
who provide and contribute to employee health coverage:
if an employee’s contribution for coverage is between 8%
and 9.8% of the employee’s household income (indexed);
the employee’s household income is less than 400% of the
Federal Poverty Level; and
the employee does not enroll in the employer’s health plan.
Employees may use the vouchers to purchase health
coverage through the Exchange:
Employers will pay amounts directly to the Exchange.
The voucher amount must be for the amount the employer
would have paid for the employee’s tier of coverage.
If the cost of the Exchange coverage costs less than the
voucher, the difference will be paid to the employee.
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47. Health Care Reform - Effective in 2014
Taxation and revenue requirements
Free Choice vouchers (cont.):
The cost of the plan is to be determined under rules
similar to COBRA, except:
they will be adjusted for age and
enrollment tier (e.g., single party, two-party and family)
in accordance with expected regulations.
Amounts paid toward the cost of coverage under the
Exchange are excluded from the employee’s income.
The employer receives a tax deduction for the amount of
the voucher.
A free rider penalty will not be imposed with respect to
employees who receive vouchers.
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48. Health Care Reform - Effective in 2014
Taxation and revenue requirements
Health insurers will be taxed:
Beginning January 1, 2014: $8 billion
Phased up to $14.3 billion in 2018
Tax will be indexed based upon premium growth
The Tax:
will be prorated for each insurer by market share
Tax will apply to reinsurance.
The following benefit plans are exempt from this tax:
disability and accident,
specific disease, such as cancer coverage; and
hospital indemnity coverage, such as those that pay a
fixed benefit for each day of hospitalization.
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49. Health Care Reform - Effective in 2014
Taxation and revenue requirements
Cafeteria plan
New Code § 125(f)(3) provides that a “qualified benefit”
under a cafeteria plan does not include qualified health
plan offered through an Exchange (with exception for
certain small employers)
Rule applies even in 2017 and thereafter, when employers
with more than 100 employees may be permitted by
States to offer health coverage through an Exchange (see
below)
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50. Health Care Reform – Cadillac Tax
Taxation requirements effective in 2018
Cadillac plan taxation - A nondeductible 40% excise tax will
be imposed:
on the aggregate value of coverage per covered employee
that exceeds (for 2018):
$10,200 per individual (adjusted as below) or
$27,500 family (adjusted as below)
The 2018 thresholds:
will be calculated monthly;
may be adjusted to reflect excess of actual growth in US
health care costs over expected growth.
are indexed to reflect age and gender-based cost of an
employer’s workforce.
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51. Health Care Reform – Cadillac Tax
Taxation requirements effective in 2018
Cadillac plan taxation (cont.):
2018 thresholds for retirees age 55 and older until
Medicare-eligible and employees in high risk professions
are increased to:
$1,650 for individual coverage
$3,450 for family coverage
The Cadillac tax will be paid by:
Insurers for insured coverage;
Employers or plan administrators for other employer-
sponsored coverage.
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52. Health Care Reform – Cadillac Tax
Taxation requirements effective in 2018
The value of coverage:
will be the cost of medical coverage (COBRA method)
will include all employer-sponsored health coverage:
medical,
Health FSA, HRA and contributions to an HSA, employee
after tax premiums, reimbursements from or Archer
MSA, and other supplementary health coverage.
Excluded from the calculation are:
employer coverage for long term care
non-health benefits such as accident, specific illness,
hospital, other fixed indemnity coverage if paid by
employee after tax premium
separately-provided (insured?) dental or vision coverage
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53. Turn on the light
Enforcement
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54. Health Care Reform
Enforcement
Violations of the new coverage mandates:
are subject to a HIPAA-like tax penalty under IRC §4980D
of $100 per day for each affected participant, from the
date of failure to the date of correction.
for unintentional failures, the penalty is capped at the
lesser of $500,000, or 10% of the employer’s health plan
costs.
These mandates are also subject to ERISA, but the $100-
per-day penalty does not apply to a retiree-only plan.
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55. Turn on the light
Thank you!
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