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MINNESOTA HEALTH ACTION GROUP: 6 TH ANNUAL EMPLOYER LEADERSHIP SUMMIT ON RAMPS OR EXIT RAMPS? RAMPING UP FOR YOUR 2014 HEALTH CARE STRATEGIES February.

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Presentation on theme: "MINNESOTA HEALTH ACTION GROUP: 6 TH ANNUAL EMPLOYER LEADERSHIP SUMMIT ON RAMPS OR EXIT RAMPS? RAMPING UP FOR YOUR 2014 HEALTH CARE STRATEGIES February."— Presentation transcript:

1 MINNESOTA HEALTH ACTION GROUP: 6 TH ANNUAL EMPLOYER LEADERSHIP SUMMIT ON RAMPS OR EXIT RAMPS? RAMPING UP FOR YOUR 2014 HEALTH CARE STRATEGIES February 21, 2013 1

2 Copyright 2013 National Business Coalition on Health Federal requirements and compliance issues for employers The Affordable Care Act

3 Copyright 2013 National Business Coalition on Health The Affordable Care Act  Five “buckets” of employer requirements 1. Fees 2. Shared responsibility 3. Market reforms 4. Reporting requirements 5. Plan design

4 Copyright 2013 National Business Coalition on Health 1. Fees  Transitional Reinsurance Program  Health insurance issuers, and TPAs on behalf of group health plans, must make payments to HHS pool to help stabilize government health insurance exchanges $10 billion in 2014 $6 billion in 2015 $4 billion in 2016  2014 amount: $5.25 per covered life per month ($63 annually)

5 Copyright 2013 National Business Coalition on Health 1. Fees  Patient Centered Outcomes Research Trust Fund  Per covered life fee on health insurance carriers and self- insured health plans to fund the Patient-Centered Outcomes Research Institute (PCORI) New non-profit quasi-governmental entity to conduct comparative effectiveness research ½ of budget comes from appropriation, other ½ from trust fund created by employer fee  $2 per covered life per plan year through 2019 $1 per covered life only for plan years beginning in 2013

6 Copyright 2013 National Business Coalition on Health 2. Shared responsibility  Responsibility is shared between large employers and individuals  Employer responsibility – “Pay or play”  Individual responsibility – individual mandate  Large employers = on average 50 or more full-time equivalent employees (FTEs)  Full time = on average 30 or more hours per week  Special rules for seasonal and variable hour employees

7 Copyright 2013 National Business Coalition on Health 2. Shared responsibility  Two different penalties for two different situations  Large employers that do not offer coverage are subject to a penalty of $2,000 per employee per year Fee calculated based on number of full time employees, regardless of who receives a tax credit on the exchange  Large employers that offer coverage, but that is not minimum essential coverage are subject to a penalty of $3,000 per employee per year Fee calculated based on the number of full time employees that actually receive a tax credit on the exchange PENALTIES ARE TRIGGERED IF, AND ONLY IF, AN EMPLOYEE SEEKS AND RECEIVES A TAX CREDIT ON A GOVERNMENT EXCHANGE

8 Copyright 2013 National Business Coalition on Health 2. Shared responsibility  Minimum essential coverage is coverage that is affordable and provides minimum actuarial value  Affordability test – Cost of self-only policy does not exceed 9.5% of employee’s annual household income Safe harbors based on employee earnings So-called “family penalty” – employers must offer coverage to dependents, but affordability based on cost of self-only  Minimum actuarial value – Plan must cover at least 60% of the allowed charges for services covered under the plan NOT the same as essential health benefits (EHB)

9 Copyright 2013 National Business Coalition on Health 2. Shared responsibility  ACA requires employers to provide written notice to employees informing them: (1) of the existence of the exchange in their state, including website and contact information (2) whether the current employer-sponsored plan (lowest cost option if more than one) meets the 60% actuarial value test, and (3) that purchasing coverage through an exchange may disqualify the employee from the employer plan  Original effective date was March 1, 2013, but recent guidance indicates late summer or early fall to coincide with exchange open enrollment

10 Copyright 2013 National Business Coalition on Health 3. Market reforms  No lifetime or annual limits on EHB  Self-insured plans not required to abide by EHB requirements, but to the extent EHB are covered, they are subject to this requirement  Limits on cost sharing requirements for EHB  $5,000 annually for self-only coverage  $10,000 annually for family coverage  No cost-sharing requirements for preventive health services, such as screenings and immunizations  Dependent coverage for adult children of enrollees up to age 26

11 Copyright 2013 National Business Coalition on Health 3. Market reforms  Guaranteed availability and renewal of coverage  Prohibition on pre-existing condition exclusions and other discrimination based on health status  Prohibition on enrollment waiting periods longer than 90 days  Automatic enrollment of employees for employers with more than 200 full-time employees  Must provide adequate notice and opportunity to opt-out

12 Copyright 2013 National Business Coalition on Health 4. Reporting requirements  Summary of Benefits and Coverage (SBC)  Employers subject to shared responsibility requirements must make return to IRS describing compliance with mandate  Inclusion of cost of employer-sponsored health coverage on employees’ W-2s  Elimination of employer deduction for Medicare Part D subsidy  Additional 0.9% income tax (1.35% total) on employees earning more than $200,000

13 Copyright 2013 National Business Coalition on Health 5. Plan design  Employer plans may not discriminate in favor of (i.e. offer more generous benefits to) highly-compensated employees  One of 5 highest-paid officers, shareholder who owns more than 10% of stock, or among highest-paid 25% of all employees  Employer plans may not discriminate against any provider acting within the scope of his/her license  Plans are allowed to vary reimbursement rates based on quality measures

14 Copyright 2013 National Business Coalition on Health 5. Plan design  Wellness program incentives  Increases maximum premium differential to 30% (from 20%) for employees who successfully complete health- contingent wellness program (50% differential allowed for smoking cessation) Reasonable alternative standard requirements  Limitation on flexible spending accounts  Employees may not elect to have salary reductions for contributions to flexible spending accounts in excess of $2,500 for any year

15 Copyright 2013 National Business Coalition on Health 5. Plan design  Excise tax on high-cost coverage (“Cadillac tax”)  Plan sponsors must pay a 40% tax on the difference between $10,200 (self-only coverage) or $27,500 (family coverage) and the actual cost of any employer- sponsored insurance Dollar amounts increase, indexed to inflation Includes total cost of coverage (both employer AND employee share of premium) Not in effect until 2018, but many employers starting to think about and prepare plan design changes now

16 Copyright 2013 National Business Coalition on Health Conclusion  Questions? Comments? Colleen Bruce, Esq. Director of Value Based Purchasing and Public Policy (202) 775-9300 ext. 14 cbruce@nbch.org


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