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© 2009 Averill Anderson, LLC. All rights reserved. Maxine on Healthcare Let me get this straight. We're going to be "gifted" with a health care plan we are forced to purchase and fined if we don't, written by a committee whose chairman says he doesn't understand it, passed by a Congress that hasn't read it but exempts themselves from it, to be signed by a president who also smokes, with funding administered by a treasury chief who didn't pay his taxes, to be overseen by a surgeon general who is obese, and financed by a country that's broke. What the hell could possibly go wrong? Amen & God help us... !!!!!! ( oops, can we still say “God” ???? )
© 2009 Averill Anderson, LLC. All rights reserved. Wisconsin Grocers Association Comprehending Obamacare Presented by : Randy Averill Averill Anderson, LLC Mark Anderson Averill Anderson, LLC Brian Smith Rogers Benefit Group, Inc.
© 2009 Averill Anderson, LLC. All rights reserved. Patient Protection and Affordable Care Act (PPACA)
4 © 2009 Averill Anderson, LLC. All rights reserved. 4 I’m from the government And I’m here to help you!
5 © 2009 Averill Anderson, LLC. All rights reserved PAGES +30 PAGES OF REGULATIONS for each of those pages OVER 80,000 PAGES! Store-front is in place, but there are a lot of empty shelves!
6 © 2009 Averill Anderson, LLC. All rights reserved. 6 How The Government Insured Squeeze Medicine Hospital Payments-to-cost Ratios for Medicare, Medicaid & Private Payers
7 © 2009 Averill Anderson, LLC. All rights reserved. 7 The Uninsured: Who are They? “46.3M Uninsured at the end of 2008”
8 © 2009 Averill Anderson, LLC. All rights reserved. Overall Approach Starting 1/1/2014, all US Citizens must have “Minimum Essential Coverage” –Individual –Employer-sponsored –Government programs Create state-based insurance exchanges Expand Medicaid and offer cost-sharing subsidies Require employers to play or pay Impose new regulation and reporting requirements Establish government long term care benefits Roll out –1 st Wave March 23, 2010 to 2013 –2 nd Wave 2014
9 © 2009 Averill Anderson, LLC. All rights reserved. 0% to 133% of Federal Poverty Level = 23.3% of population or about 71 million Americans. IRS is the collector! Will be given access to Medicaid (free coverage) current Medicaid population ~ 45 million people. IRS is the collector! 134% to 400% of Federal Poverty Level = 66.9% of population or about 204 million Americans. IRS is the collector! Will be able to purchase health insurance with federal subsidies on state exchanges (if employer does not offer FQHBP-level coverage). IRS is the collector! The Core of Reform: Expand Coverage Inflation Adjusted Dollars, 2009/2010 FPL guidelines
10 © 2009 Averill Anderson, LLC. All rights reserved. Medicaid or Voucher Eligibility 2014 Family Size Federal Poverty Level Medicaid Threshold (133% FPL) 400% FPL Eligible for Exchange Single$10,836$14,412$43,344 Family of 2$14,580$19,391$58,320 Family of 3$18,312$24,355$73,248 Family of 4$22,056$29,334$88,224 Family of 5$25,800$34,314$103,200 Family of 6$29,532$39,278$118,128 Family of 7$33,276$44,257$133,104 Family of 8$37,020$49,237$148,080
11 © 2009 Averill Anderson, LLC. All rights reserved. True Cost of Health Reform What the Democrats call the “first 10 years” (2010 – 2019) The true first 10 years (2014 – 2023) The true first 10 year costs: $1.8 Trillion Percentage of “10 year” costs that hit in the first 4 years: 1% Chart produced by: Jeffrey H. Anderson, Senior Fellow, Pacific Research Institute
12 © 2009 Averill Anderson, LLC. All rights reserved. Individual Mandate Starting 1/1/2014, all U.S. citizens must have “minimum essential coverage” Cannot consist of only excepted benefits – e.g. limited scope dental, vision, health FSA Plans should use “good faith effort” to comply with a “reasonable interpretation” Individual non-compliance penalties start at $95 in 2014, phase to $695 per adult in 2017 (1/2 for child) Massachusetts “The Connector” individual penalty began < $100, today $1,
13 © 2009 Averill Anderson, LLC. All rights reserved. Premium Assistance Tax Credits Designed to guarantee that qualified individual’s medical insurance cost is limited to a specified percentage of their household income. Household Income Maximum % of Income Up to 133% % - 150% % - 200% % - 250% % - 300% % - 400%9.5
14 © 2009 Averill Anderson, LLC. All rights reserved. Exchanges Available in 2014 for individuals and companies with less than 100 employees Assist consumers in shopping for medical insurance State government sponsors, reviews and approves Insurance companies submit policy, coverage and premiums State-run co-op plan option 2014
15 © 2009 Averill Anderson, LLC. All rights reserved. Employer Responsibility No employer mandate Federal government incentives/disincentives to employers to provide minimum essential coverage –Based on # of FTE Employees –Tax Credit –Penalties... A few empty shelves 2014
16 © 2009 Averill Anderson, LLC. All rights reserved. Full Time Equivalent (FTE) Used to determine which rules apply to specific businesses Example –40 employees working 30 hours or more per week –Part-Time employees worked 3,200 hours during the previous month Full Time Employees25 Part Time Aggregate: Hours Worked Last Month3200 ÷ Full Time Hours/Month Total # of FTE52
17 © 2009 Averill Anderson, LLC. All rights reserved. Employer Incentives / Disincentives Small Employer Tax Credit 2010 –Eligibility –25 FTE or less –Average Annual Salary <$50,000 –Employer pays at least 50% of Premium Average Wage Firm SizeUp to $25,000Up to $35,000Up to $45,000 Up to 1035%21%7% 1523%9%0% 2012%0% 250% 2010 Small business tax credit calculator powered by H&R Block:
18 © 2009 Averill Anderson, LLC. All rights reserved. Shared Responsibility Surcharge – No Employer Coverage Employers with at least 50 FTE not offering coverage (minimum essential benefits) If one employee receives a tax subsidy to buy insurance through an “Exchange” then this applies Penalty$2,000 # of FTE52 # Penalty Doesn’t Apply to first Penalty$44,
19 © 2009 Averill Anderson, LLC. All rights reserved. Shared Responsibility Surcharge – Employer Coverage Employers with more than 50 FTE offering coverage Employee buys through an Exchange and receives premium assistance credit Must pay the lessor of $3,000 for each “employee receiving a premium credit” or $2,000/FTE (minus 30) 2014
20 © 2009 Averill Anderson, LLC. All rights reserved. Vouchers: Employer offering minimum essential coverage and pays any portion of cost must provide Free Choice Voucher to a qualified employee 1.Qualified Employee –EE Required contribution between 8-9.8% of household income –Household income < 400% FPL –Waives Participation 2.Voucher value based on plan in which “employer pays the largest portion of the cost of the plan” 3.Employee uses voucher to purchase exchange coverage 4.Excess value of voucher kept by employee 2014
21 © 2009 Averill Anderson, LLC. All rights reserved. CLASS Community Living Assistance Services & Supports Act Effective January 1, 2011 Creates a voluntary federal long-term care plan 5-year waiting period before benefits are payable Secretary of HHS –must publish details by October 1, 2010 Premiums$240/mo CMS actuary Vesting period Benefit triggers Cash Benefit$50 - $290 / day 2010
22 © 2009 Averill Anderson, LLC. All rights reserved. Starting July 1, 2010, imposes a 10% tax on tanning services. Beginning in 2011, the pharmaceutical industry will pay annual industry fees. The fee will be phased in and will hold steady at $2.8 billion a year after A new 3.8% tax will be added on income from interest, dividends, annuities, royalties and rents for those individuals who make more than $200,000 and couples that make more than $250,000 annually. Beginning October 1, 2012, insurers charged a $1 to $2 Comparative Effectiveness Research fee per covered life Revenue (TAX) Raising Provisions
23 © 2009 Averill Anderson, LLC. All rights reserved. Beginning in 2013, manufacturers of medical devices will pay a 2.3% excise tax on sales of medical devices. Beginning in 2013, the Medicare payroll tax rate increase by 0.9% for individuals who make more than $200,000 and couples that make more than $250,000 annually. Beginning in 2014, Health Insurance Sector Tax, a non-deductible premium tax imposed on insurers and TPA’s –$8.0 Billion Excise Tax –$11.3 Billion in 2015, 2016 –$14.3 Billion in 2018 Revenue (TAX) Raising Provisions
24 © 2009 Averill Anderson, LLC. All rights reserved. Health Reform Implementation Timeline Effective plan years beginning on or after March 23, 2010 –Small employer health insurance credit –Wellness rewards increased 20% to 30% –Executive medical plans offered to HCE only discriminatory –Grandfathered Plan Option
25 © 2009 Averill Anderson, LLC. All rights reserved. Health Reform Implementation Timeline 2011 –No reimbursement for OTC drugs unless prescribed. –Form W-2 Reporting Effective for coverage January 1, 2011 Report value of employer sponsored health coverage Does not include FSA Contributions, LTC, accident or disability, disease specific hospital or fixed indemnity insurance Generally COBRA rates –CLASS may begin
26 © 2009 Averill Anderson, LLC. All rights reserved. Health Reform Implementation Timeline 2012 –Uniform explanation of coverage –4-page pre-enrollment coverage document sent outlining benefits and exclusions –60-Day notice in Advance of Material Modifications –“FSA maximum contribution - $2,500”
27 © 2009 Averill Anderson, LLC. All rights reserved. Wisconsin Grocers Association Comprehending Obamacare Presented by : Randy Averill Averill Anderson, LLC Mark Anderson Averill Anderson, LLC Brian Smith Rogers Benefit Group, Inc.
© 2009 Averill Anderson, LLC. All rights reserved. Grandfather Status Health plans in force March 23, 2010 are considered a “grandfathered” plan are exempt from some of the changes. To remain grandfathered, you cannot make benefit changes that increase employees cost.
© 2009 Averill Anderson, LLC. All rights reserved. Grandfather Status – The following benefit changes will not cause loss of grandfathered status: Adding employees to your plan Complying with federal or state law Increasing employee contributions by 5 percent or less Voluntarily changing benefits to comply with healthcare reform
© 2009 Averill Anderson, LLC. All rights reserved. Grandfather Status – Examples of changes that will cause a plan to lose grandfathered status: Obtaining a new policy, certified, or contract of insurance sold after March 23, 2010 Eliminating benefits for a particular condition Adding or decreasing overall annual dollar limit Increasing coinsurance percentage Increasing deductible or out-of-pocket maximum by more than medical inflation, plus on-time-only 15 percent increase Increasing copayments for any service by more than the annual rate of medical inflation, plus a one-time-only 15 percent or $5 increase, whichever is greater Decreasing employer contribution rate by more than 5 percent Changing carriers (fully-insured plans only)
© 2009 Averill Anderson, LLC. All rights reserved. Benefit Changes – Plans sold or renewed with an effective date on or after Sept 23, 2010, will experience the following benefit changes: Lifetime maximum. Plans will have an unlimited maximum Annual dollar limits. No annual dollar limits on covered essential health benefits including: - Prescription drugs - Emergency services - Hospitalization - Maternity and newborn care - Mental and substance use disorder, including behavioral health treatment - Ambulatory patient services - Rehabilitation and facilitative services and devices - Laboratory services - Preventative and wellness services and chronic disease management - Pediatric services, including dental and vision care Emergency care. Plans will cover services for emergency medical care administered in a hospital’s emergency facility at the in-network benefit level.
© 2009 Averill Anderson, LLC. All rights reserved. Benefit Changes – New groups or plans no longer grandfathered on or after Sept. 23, 2010, will also include: Preventive services. Plans will cover in-network preventive care services at 100 percent. Members will not pay a copayment, coinsurance, or deducible. Some preventive services covered by the regulation include: - Immunizations - Blood pressure screenings - Cholesterol screenings - Mammograms - Colonoscopies - Obesity screenings - Type 2 diabetes screenings - Diet counseling - Obesity screenings and counseling - Tobacco-use screenings
© 2009 Averill Anderson, LLC. All rights reserved. Pre-existing conditions Pre-existing condition limitations will not apply to a covered person under age 19. This provision will apply to your benefit plan at your next renewal after Sept. 23, 2010, unless otherwise specified.
© 2009 Averill Anderson, LLC. All rights reserved. Early Retiree Reinsurance Program The regulations create a new $5 billion reinsurance program for employers that provide health insurance coverage to early retirees who are over age 55 but are not eligible for Medicare. This program began June 21, 2010, and continues until insurance exchanges become available on Jan. 1, 2014 or funding for the new program runs out.
© 2009 Averill Anderson, LLC. All rights reserved. Primary care physicians and Gynecological and obstetric services If a plan requires designation of a primary care physician who specializes in pediatrics may be selected as the primary care physician for a covered dependent child. If a plan provides coverage for gynecological or obstetric care, authorizations or referrals for such care are no longer required for such care, as long as the provider remains in your network.
© 2009 Averill Anderson, LLC. All rights reserved. Non-discrimination rules Groups may no longer restrict membership in a benefits program that favors highly compensated individuals, as defined by the federal government. The only exception for this provision is if the health plan has retained its grandfather status.
© 2009 Averill Anderson, LLC. All rights reserved. Minimum Loss Ration 85% Large Group 80% Small Group
© 2009 Averill Anderson, LLC. All rights reserved. Exchanges State based for individuals and group employees Operational by January of 2014 Community rated with 5 benefit categories; Bronze, Silver, Gold, Platinum, Catastrophic Required to maintain a call center, enroll individuals and determine tax credits. Carriers participating in the exchange will pay a fee, must meet marketing requirements and be accredited.
39 © 2009 Averill Anderson, LLC. All rights reserved. Healthcare Reform = Change Employee Health Benefit Options –Employer Plan –Government health plans –Exchange –Guaranteed coverage on demand Cost –Employer plan contribution –Tax credit subsidy –Value of free choice Voucher –Cost of non-employer plans –Pay penalty
40 © 2009 Averill Anderson, LLC. All rights reserved. Healthcare Reform = Change Employer Attract and retain the best employees by offering high value benefit plans while minimizing costs Budget FTE – Subsidy / Penalty situation Private insurance plan design Alternative sources for health benefits –Government programs – Medicaid, Medicare, BadgerCare, etc –Exchange plan options and individual premium Value of Voucher Employee Contribution Employee Household income Compliance with rules and regulations
41 © 2009 Averill Anderson, LLC. All rights reserved. Thank you! Have questions? A VERILL A NDERSON, LLC - employer benefit solutions- (800)
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