1. Health Care Reform (PPACA)
Summary for Today & Tomorrow
Presented by Raphy Timour
Pontrelli, Timour & Associates, Inc. Insurance Services
&
Amanda Kench, Benefits Administrator
Total HR

2. Today’s Agenda
• Brief History of the Preferred Protection &
Affordable Care Act.
• Provisions that have already been
implemented.
• Future Provisions.
• Employer Compliance Issues
• What it all means & how Total HR will help
• Where do we go from here

3. History of PPACA
• Signed into Law on March 23, 2010
• Numerous Court Challenges
• June 28th, 2012 Upheld by the United States Supreme
Court.
• Individual mandate is constitutional under
the power of Congress to “lay and collect”
taxes
• Some limits on the power of Congress to
withhold Medicaid funding
• Provisions that affect employers remain intact

4. Goal of PPACA
• Decrease the number of uninsured.
• Reduce the overall cost of Health Care.
• Improve healthcare outcomes.
• Streamline delivery.
• Initial Bill 2400 pages
• Expected to be over 200,000 pages once
complete.

5. Provisions Enacted in 2010
• Child Dependents Covered up to age 26
• No Lifetime or Annual Dollar Maximum Limits
• No Pre-existing Condition Exclusions for
anyone under the age of 19.
• Tax Credits for Small Employers.
• Preventative Services Covered at no Cost.

6. Provisions Enacted in 2011
• Medical Loss Ratios - Insurers must spend at
least .80 or .85 cents of every premium dollar
on health costs and claims (Depends on the
size of the group)
• Cannot purchase over-the-counter drugs using
money from an FSA, HSA, or HRA, unless
prescribed.

7. Provisions for 2012
• Employers must report the annual cost of eligible
benefits on Employees W2.
– Waived this year for those companies who generated less
than 250 W2’s last year. Total HR has audited their client
base to make sure they are reporting this information and
added the information for many clients.
– Currently waiting for IRS regulations as to when all sized
companies will be required to report employer
contributions on W2’s.
• SBC (Summary of Benefits and Coverage)
– Establishes guidelines and uniformity to Health Plan
Benefit Descriptions

8. Summary of Benefits and Coverage
• For any sized company that renews on or after September
23rd, 2012. This will affect Total HR clients on our benefit
plans effective May 1, 2013.
• A shorter, new summary document provided by carriers
– Intended to help people easily compare one
benefit plan to another
– A four-page, two-sided document with very
specific layout and information format is provided by
the Dept. of Labor
• Must be provided to each participant or beneficiary for each
benefit package offered that the participant or beneficiary
is eligible for. Total HR will make sure these summaries are
up to date and handed out to client employees.

9. SBC’s Continued
• Must include several pieces of information
including, but not limited to:
– Uniform standard definitions of medical and
health coverage terms
– Description of the coverage including the
cost sharing requirements such as
deductibles, coinsurance, and co-
payments,
– Information regarding any exceptions,
reductions, or limitations under the
coverage
– Renewability and continuation provisions

10. SBC’s Continued
• Must be uniform and easy to understand
• Very stringent formatting requirements
– 12 point font
– All shading, bolding and symbols must be
replicated exactly
– Can’t exceed four double-sided pages in
length

11. SBC’s Continued
• Can be distributed electronically by a plan sponsor to participants
who are eligible but not enrolled if:
– The format is readily accessible (such as in an html, MS Word,
or pdf format);
– The SBC is provided in paper form free of charge upon request;
and
– If the SBC is provided via an Internet posting address the
employees must have internet access at the workplace.
Total HR will be taking a multi-dimensional approach that will be
customized to each client which will ensure our client’s employees
are receiving this information. The options will include online access
via email or an online enrollment tool, mailings to employee’s home
addresses and paper packages on site at each client location.

13. Medical Loss Ratio Rebates
• PPACA guidelines state that in Small Group, which is 2-
100 employees, at least 80% of all insurance premiums
must be used on actual medical related costs. (For
companies with over 100 employees, .85 cents of every
dollar)
• Any spending below these thresholds will result in a
rebate to policy holders. Plan sponsors or fiduciaries
must act impartially, prudently, and solely in the
interest of the plan participants and beneficiaries.
• Calculations can become challenging. Total HR will be
responsible for doing all rebate calculations for our
clients and employees.

14. Provisions for 2013
• Flexible Spending Accounts (FSA) reduces the
amount one may contribute towards Health
contributions to $2,500.00
• This will impact clients on Total HR FSA plans
effective May 1, 2013.

15. Provisions for 2014
• Individual Mandate – Most individuals must
acquire health insurance or face a fine.
• Employer Mandate to provide health insurance
for those who employ more than 50 Full Time or
Full Time equivalent employees.
• Waiting period cannot exceed 90 days.
• Auto Enrollment for large employers over 200
employees.(Pending final rulings)
• Discrimination Testing.(Pending final rulings)
• Establish Health Insurance Exchanges

16. Play or Pay Mandate
• Any employer with 50 or more full-time/equivalent employees must
provide insurance to all eligible employees. Full time is considered anyone
who works 30 hours or more a week. Total HR will determine which clients
will be impacted.
• Must be offered to all eligible employees and their dependents.
• Must be affordable. Total HR will do the affordability calculations for our
clients and share the results with them.
• Must offer a plan that meets the Minimum Essential Coverage
requirement. Total HR & PTA will advise which plans meet the coverage
requirements and will advise our clients ahead of time if they will need to
change their plan offerings.
• Not providing appropriate, affordable coverage to eligible employees
would result in a fine. Total HR will determine if it would be cost effective
for each client to “play” by meeting all of these requirements or if it would
make more financial sense to “pay” the fines. Total HR will provide these
calculations for each client which will assist you in your final decision.

17. Play or Pay
Who is eligible?
• How do you determine who is eligible?
– Establish a “Look back or Measurement period”
• Not less than 3 months, but not more than 12 consecutive
months.
• Anyone that averages 30 hours or more per week is
considered eligible.
– Employers may use reasonable and good faith
interpretation of “Seasonal” employees to help
determine eligibility.
• Definition: Anyone who works less than 120 days
• Seasonal employees are not eligible.
Total HR will figure this all out for you this is just so you
understand how we are coming up with the calculations!

18. Play or Pay
When Would a Penalty Apply?
• When it is determined that you have over 50 full-time
employees and do not offer coverage to your eligible
employees and their dependents.
– Penalty: $166.67 per month, per eligible employee, minus
the first 30 employees.
• If you offer coverage, but an employee is expected to
spend more than 9.5% of his W2 earnings on his or her
health coverage only.(Final employer contribution
guidelines are still not established)
– Penalty: $250 per month, per eligible employee who
receives a premium credit for coverage purchased through
the exchange.

19. Employer Size Calculations
A. Number of full time employees in the last year. 45
B. Total hours worked by a part timer in a month. 96
C. Total number of part timers used in B. 15
D. Multiply B times C. 1440
E. Divide (D) by 120. 12
F. Add (A) and (E). 57
– The company has 57 full time equivalent employees.
The company would be mandated to offer health
insurance to its eligible employees

20. Challenges Facing Employers
• Need will remain to recruit and retain quality
employees.
• Benefits will continue to be a significant factor in
overall employee compensation and company
culture
• Compliance will be an ongoing issue and
challenge for many employers.
• Total HR will be here to guide and assist you
throughout these changes. We will ensure that
you are meeting the compliance requirements.

21. Where do we go from here
• Healthcare Reform is still a “moving target”…
• Possibility of legislative changes
• Ongoing regulatory efforts—
• Federal level—
• IRS
• DOL
• HHS
• State level changes
• Total HR & PTA will continue to monitor these changes
and keep our client informed and up to date on how
Health Care Reform will impact them.

22. Questions?
Call James Harwood
or Amanda Kench
818-248-0049