Agenda Affordable Care Act (Obamacare) How ACA effects large businesses What is New York State Small Business Health Exchange or “Marketplace” How the Marketplace will affect plan designs offered to Individuals as well as businesses How small business tax credits and subsidies will help pay for coverage
Notice of Exchange Employers must notify new and current employees of Exchange information − New employees beginning Oct. 1, 2013 (within 2 weeks) − Current employees no later than Oct. 1, 2013 Notice must include 3 elements: − Existence of health benefit Exchange and services provided − Potential eligibility for subsidy under Exchange − Risk of losing employer contribution if employee buys coverage through an Exchange Model notice available through IGP website or DOL (Cobra notice must be updated as well) Notice can be provided by mail or electronically (if DOL requirements met) Applies to Large and Small Employers!!
Health Care Reform Small Business -Under 50 employees -Not Subject to PPACA compliance -Not subject to offering employees coverage - Small Business Employer groups are eligible to obtain coverage from exchange Large Business -Over 50 employees -Subject to PPACA compliance -Subject to offering employees coverage -Large Business (over 100) not eligible for exchanges until 2017 Individua l -Individuals must obtain coverage or pay tax. -Individuals are eligible to obtain coverage from exchange
Large Employer Responsibilities & Penalties ( Delayed Until 2015) Employers must offer coverage to all full time employees: must cover 60% of out of pocket costs (minimum value) for a single person Cost less than 9.5% of their household income Penalties for Non-Compliance, meaning the plan does not meet minimum value or is deemed not affordable $3000 for each employee who receives subsidized coverage through the exchange Maximum total penalty of $2000 per employee minus the first 30. 100 ee company who did not offer coverage would pay $140,000. 100-30 = a penalty of 70 ee times $2000 per employee. Or $140,000 Penalty is NON DEDUCTIBLE!
Individual Mandate Effective Jan. 1, 2014: Individuals must enroll in health coverage or pay a penalty Penalty amount: Greater of a flat dollar amount or a percent of income − 2014 = $95 or 1% − 2015 = $325 or 2% − 2016 = $695 or 2.5% Some exceptions apply
Small Business Health Insurance Exchanges Health insurance Exchanges were established in each state (by the state or the federal government) State action: − 17 (and D.C.) declared state-based Exchange including New York − 7 planning Partnership Exchange − 26 default to federal Exchange Deadlines − Open enrollment: 10/1/13 − Fully operational: 1/1/14
New York State of Health “The Marketplace” Individuals and small employers can purchase coverage through the Marketplace Small Business Health Option Program (SHOP) − Small employers = 50 or less In 2017, states can allow employers of any size to purchase coverage through Exchange New plans coming into the commercial marketplace can be “on exchange or off exchange”
New Plan Levels Platinum Plan- Covers 90% of Out of Pocket Costs Gold Plan-Covers 80% of Out of Pocket Costs Silver Plan-Covers 70% of Out of Pocket Costs Bronze Plan-Covers 60% of Out of Pocket Costs Catastrophic Plan- High Deductible only for those under 30
What Insurance Companies will provide coverage Individual Marketplace Affinity Health Plans HIP Empire Blue Cross Blue Shield Fidelis Health Republic Healthfirst North Shore LIJ Oscar United Healthcare Small Business Marketplace North Shore LIJ Health Republic Oxford Blue Cross (Off Exchange Only) Emblem (Off Exchange Only)
Individual (Tax Credits) Citizens and legal residents in families with incomes between 100% and 400% of poverty who purchase coverage through a health insurance exchange are eligible for a tax credit to reduce the cost of coverage. Tax Credits are applied directly to the premium Only available through the individual exchanges Tax credits will be adjusted at the end of the year based on estimated earning and vs actual earnings. Good Luck IRS!
Examples of Tax Credits for Individual & Families Husband Wife with two Children under19. Salary of $75,000 is 237.42% of the Federal Poverty Level Premium Credit $572 HIP Plan Cost $950 Health Republic $707 North Shore $846 Single Person Salary of $24,000 is 208.88% of Federal Poverty Level Premium Credit 233.60 HIP Plan Cost $396 Health Republic $282 North Shore $334
Small Business Small Business tax credit is available for eligible small businesses. How Does it Work: − Fewer than 25 full-time employees − Or a combination of full-time and part-time staff − The average annual wages of employees must be less than $50K − The employer must pay at least 50% of the insurance premiums − The maximum tax credit of 35% increases to 50% in 2014 − Eligible employer can claim the credit for up to six years
Examples of Tax Credits for Businesses Small business with 12 full time employees. Average salary is $36,000. Company contributes $300 monthly per EE. Tax Credit for: 2013-$6451 2014-$9216 which comes out to $64 per month per EE. Small business with 22 full time employees. Average salary is $38,000. Company contributes $300 monthly per EE. Tax Credit for: 2013-$0 2014-$0
Reasons to Continue Employer Sponsored Coverage Insurance is seen as a tremendous employee benefit Employer coverage continues to be deductible for the employer Employee contributions continue to be pre tax Tax Credits for small businesses are offered (however only on the exchange) Individuals who are not sponsored by the company may be better off on the Individual market
Reasons Why a Broker is More Important Today Than Ever The role of a broker is becoming more consultative in choosing which plans and marketplaces are appropriate. Tax considerations now take center stage! The broker needs to help the employer navigate compliance issues more than ever. Employees will need more help choosing a plan that fits their needs. Platinum, Gold, Silver, Bronze. Group or Individual Plan Employees will need more help navigating the new networks with the new carriers. (Blue Cross: Pathways) Brokers provide an essential role as you employee advocate especially with new plans and new companies as well as the exchange.