NAVIGATING THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA) Key Provisions Impacting Small Business

What is PPACA?  This presentation is focused on companies with less than 50 employees  Became law March 23, 2010; some provisions already in effect  Employer rules vary by company size:  Self Employed  25 Employees or less  Employees  50 + Employees  Employees

Key Benefit Mandates  Most carriers have/are modifying the plans they offer to conform to these requirements  Guaranteed Issue: waives pre-existing condition exclusions for persons younger than 19 ; on Jan 1, 2014, this benefit applies to ALL ages  Community Rating elements  Removal of annual and lifetime dollar limits  Coverage for dependents to age 26  100% coverage for certain preventive services  Additional participant claim and appeal rights  90-day maximum wait for coverage

Three New Terms  Health insurance exchanges – where “pools” of qualified insurance policies became available for purchase beginning on Oct 1, 2013  Employer mandate – employers of 50 or more must provide insurance or pay a penalty. (Penalty delayed to Jan 1, 2015 due ostensibly to employer terminations and restructuring to 29-hour jobs)  Individual mandate – individuals must have health insurance that meets new federal requirements, or pay a penalty

Insurance Exchanges  Setup required by 2014, but 32 states have refused to fund, passing baton to the US gov’t  Congress mandated continuation of individual and group coverage outside the exchanges  Insurance companies offer coverage “pools” through “portals of access”  Regulatory bodies – regulate carriers and policies  Subsidy administration – IRS  Enrollment portals – online “SHOP”  Information portals – internet-based

Individual Coverage  Annual penalty per family member the greater of (max 3 per family):  $ 95 or 1% of individual’s taxable income  $ 325 or 2%  $ 695 or 2.5%, then indexed for inflation  Enforced as tax liability on federal income tax  Exchange will subsidize premiums for individuals earning less than $46,000  Required to have Minimum Essential Health Coverage (MEC) starting January 1, 2014

Main Impacts on Employers  Employees can elect the exchange, impacting its 75% participation rate, but if the employer offers a plan, no subsidy is available to the employee  Employer plans unchanged since Mar. 23, 2010 can be “grandfathered” indefinitely  By 1/1/2014 – employer plan must conform to mandated benefits – plan renewal before end of 2013 will buy another year of noncompliance  But.. the exchange is operating the first year on “honor-system;” employee can claim no employer coverage – no way to verify

Employer Administrivia  Provide employees with current Benefits and Coverage (SBC) disclosure summary from insurer – at renewal or effective date after 9/23/13  Employee FSA contributions reduced to $2500; OTC meds disallowed for HSAs  H&HS supposedly approves >10% rate increases  Medical Loss Ratio (MLR) rebates started 2012; insurer must spend 85% of group premiums on claims  Notify employees of the existence of the exchange

Taxes and Fees  Employer credit: up to 35% of 2013 premiums  Four new fees added starting 2014 to insurance premiums:  HIIF – 2.3%+ to offset PPACA cost-generating provisions  REA - $5.25/mo/insured to cover high cost patients  PCORI – funds comparative treatment research  FFEUF – pays for access to federally-facilitated exchanges  0.9% Medicare payroll tax of income over $200,000  3.8% tax on investment income in effect for some

Where is PPACA taking us?  Insurance premiums will continue to rise.  Privacy will evaporate – in 2014, health records will go to a centralized federal database.  Other Americans will wait longer for service, especially on exchanges, which docs will avoid.  Fewer doctors will take Medicare; Independent Payment Advisory Board will ration services, condemning seniors to 2 nd -class medical care.  Coverage choices and flexibility will diminish.

Towards a Single-Payer System  10 million uninsured individuals without employer coverage are being forced to enroll in health insurance  By 2015, so many workers will be trapped in the exchanges that there will be no going back to private plans  Community organizers have infested public places to sign up live bodies for the exchanges  Delay in business penalties accelerates the transition from employer-based insurance to the Single Payer System; it also transfers $60 billion in expense from business to taxpayers  Applicants can receive a “liar’s subsidy”

Recommendations  If you want to keep control of a group of 5 or more employees, look into partial self-funding  Support efforts in Congress to defund PPACA;  Consider treatment outside the U.S.  Find an independent physician or hospital  Take charge of your health Democrats and unions are jumping ship

For More Information     Wayne Peterson … (800)