1. [ www.kiesling.com ] 1 Iowa Telecommunications Association Health Reform Update

2. [ www.kiesling.com ] 2 WELLNESS IN THE WORKPLACE How can it save you? Lindsay Guenther, HR Generalist

3. [ www.kiesling.com ] 3 Back to Health Class Question: Even when resting, what muscles work twice as hard as the leg muscles of a person sprinting? Answer: The human heart.

4. [ www.kiesling.com ] 4 Back to Health Class Question: Approximately how many gallons of blood is pumped through your body by your heart each day? Answer: 2,000 gallons

5. [ www.kiesling.com ] 5 Back to Health Class Question: During the average lifetime, how many times will the human heart beat? Answer: 2.5 billion times

6. [ www.kiesling.com ] 6..And the cold reality Question: What percentage of deaths in the U.S. are from heart disease? Answer: 25% (1 in every 4 deaths)

7. [ www.kiesling.com ] 7 The Cost of Poor Health In 2010, the cost of cardiovascular disease in the U.S. was about $444 billion. –Heart conditions –Stroke –Peripheral artery disease –High blood pressure $1 of every $6 spent on healthcare was spent on the above conditions

8. [ www.kiesling.com ] 8 The Cost of Poor Health (to your business) Increased number of sick days/employee absenteeism Turnover Presenteeism Increased healthcare costs

9. [ www.kiesling.com ] 9 The Rise of Costs 8% Single 9% Family Overall inflation was 2%.

10. [ www.kiesling.com ] 10 The Rise of Costs Six causes of increased healthcare costs 1.Hospital Visits 2.Doctor Visits 3.New Medical Technologies 4.Lab Tests 5.Drugs 6.Health Plan Administrators

11. [ www.kiesling.com ] 11 Back to Class Question: What is our controllable action in lowering the costs of healthcare? Answer: Education about being a smarter health consumer and wellness programs.

12. [ www.kiesling.com ] 12 Who Even Participates? 52% Wellness programs give them more energy and productivity. 41% Wellness programs encourages them to work harder and better. 40% Wellness programs would drive retention. In a 2011 study conducted by Principal Financial Group, thousands of employees of companies who offered wellness programs said…

13. [ www.kiesling.com ] 13 Creating a Wellness Program Organizational Culture and Leadership –Develop a “Human Centered Culture” –Demonstrate leadership –Encourage mid-level management

14. [ www.kiesling.com ] 14 Creating a Wellness Program Program Design –Establish clear principles –Integrate relevant systems –Eliminate recognized occupational hazards –Be consistent –Promote employee participation

15. [ www.kiesling.com ] 15 Creating a Wellness Program Program Design (continued) –Tailor programs to the specific workplace –Consider incentives and rewards –Find and use the right tools –Adjust the program as needed –Make sure the program lasts –Ensure confidentiality

16. [ www.kiesling.com ] 16 Creating a Wellness Program Program Implementation and Resources –Be willing to start small and scale up –Provide adequate resources –Communicate strategically –Build accountability

17. [ www.kiesling.com ] 17 Creating a Wellness Program Program Evaluation –Measure and analyze –Learn from experience

18. [ www.kiesling.com ] 18 One Last Question Question: Although we can’t fully stop the rise of healthcare costs in the U.S., who can help create awareness around better lifestyles and healthy choices related to their employees? Answer: You.

19. [ www.kiesling.com ] 19 Sources Iowa Public Television http://www.pbs.org Cleveland Clinic http://my.clevelandclinic.org/ Center for Disease Control and Prevention http://www.cdc.gov/niosh/TWH/essentials.html Kaiser Family Foundation http://kff.org/ WebMD http://www.webmd.com/healthy-aging/features/heart-disease-medical-costs CNN Money http://money.cnn.com/ Principal Financial Group http://www.principal.com/wellbeing/2011/wbwellness-4q2011-data.pdf National Institute for Occupational Safety and Health http://www.cdc.gov/niosh/

20. [ www.kiesling.com ] 20 Questions? Lindsay Guenther, HR Generalist Kiesling Associates LLP lguenther@kiesling.com (515)221-4647 West Des Moines, IA Thank you!

21. [ www.kiesling.com ] 21 TAX CONSIDERATIONS

22. [ www.kiesling.com ] 22 Upcoming Changes –Individual mandates –Employer play or pay – Employer mandates (2015) –Large employer auto enroll requirement –Insurance exchanges for individuals and small businesses –Guaranteed issue, renewability and rating variation requirements –Annual limits –Limit on waiting periods –Wellness incentives –Preexisting condition exclusions –Comprehensive health insurance coverage –Limits on cost sharing and deductibles

23. [ www.kiesling.com ] 23 Major Changes Insurance Exchanges –Under the law, states will create insurance exchanges that will be operational by 2014 –Open to both eligible individuals and some employers Before 2017, open to employers with 50 or fewer employees only Starting 2017, each state will be allowed to open up the exchange to larger employers

24. [ www.kiesling.com ] 24 Individuals The Shared Responsibility Provision –Effective January 1, 2014 –Certain exemptions, some of which need to be certified You are not required to file a tax return Coverage is more than 8% of household income –Penalties apply if exceptions do not apply

25. [ www.kiesling.com ] 25 Premium Tax Credit Insurance is through the exchange Are not eligible through employer plan Are within certain income limits If married you must file joint Cannot be claimed as a dependent

26. [ www.kiesling.com ] 26 Income Limits Individuals – Up to $45,960 Family of two – Up to $62,040 Family of four – Up to $94,200

27. [ www.kiesling.com ] 27 Credit Limitations Income Relative to FPL Floor Premium Responsibility Ceiling Premium Responsibility Up to 133%2.0% 133% to 150%3.0%4.0% 150% to 200%4.0%6.3% 200% to 250%6.3%8.05% 250% to 300%8.05%9.5% 300% to 400%9.5%

28. [ www.kiesling.com ] 28 Credit Calculation Household Income$60,000 Family Size4 FPL255% Estimated health insurance$7,128 Credit limitation8.19% Out of pocket$4,914 Premium credit$2,214

29. [ www.kiesling.com ] 29 Penalty Calculation The Lesser of:Flat DollarExceeds Income 2014$951.0% 2015$3252.0% 2016 +$6952.5%

30. [ www.kiesling.com ] 30 Available 2014 if participating in exchange Phase-outs –10 to 25 full time equivalents –$25,000 to $50,000 in wages 50% of employer’s non-elective contributions Credit is netted against deduction Business Health Insurance Credit 30

31. [ www.kiesling.com ] 31 Exclusions –Self-employed –2% shareholders in an S-Corp –5% shareholders of C-Corp Health Insurance Credit 31

32. [ www.kiesling.com ] 32 Health Insurance Exchange Credit Available in 2014 Credit equal to 50% of costs purchased through state exchange Available for only 2 consecutive years Additional exchange information available in October 2013

33. [ www.kiesling.com ] 33 Manager$62,000 Asst Manager41,000 Accountant40,000 Customer Service 138,000 Customer Service 229,000 Total Wages$210,000 Health Insurance Credit 33

34. [ www.kiesling.com ] 34 Full time employees5 Part time employees1 Total annual hours worked by PTE1,040 Full time equivalents(FTE)- Total employees5 Total annual wages$210,000 Average annual wage$42,000 Health Insurance Credit 34

35. [ www.kiesling.com ] 35 Health insurance premiums$55,000 Maximum credit(50%)$27,500 FTE exceeding 10- AAW exceeding $25,000$17,000 AAW credit reduction$18,700 Net credit$8,800 Health Insurance Credit 35

36. [ www.kiesling.com ] 36 Requirement to Provide Insurance Deferred Until 2015

37. [ www.kiesling.com ] 37 Employer Responsibilities Employers with more than 50 Ees to pay 2k per employee if no health insurance coverage is offered and 1 EE is receiving premium assistance –First 30 employees are excluded from calculation of penalty –Full time employees only are used in calculation

38. [ www.kiesling.com ] 38 Minimum Essential Coverage The employee’s share must not exceed 9.5% of household income The employer’s share must be at least 60% of the actuarial value of the total plan

39. [ www.kiesling.com ] 39 Full Time Equivalent (FTE) Employed on average 30 hours in a week Employed 130 hours in a month Part time hours are divided by 120 per month Seasonal workers excluded if 4 months or less

40. [ www.kiesling.com ] 40 Counting Employees Full time employees for each month + FTE for each month = Divide by 12

41. [ www.kiesling.com ] 41 Monthly Calculation

42. [ www.kiesling.com ] 42 Annual Calculation

43. [ www.kiesling.com ] 43 Annual Calculation

44. [ www.kiesling.com ] 44 Employer Costs

45. [ www.kiesling.com ] 45 Wellness Program Limited to 30% of employee coverage and 50% for smoking. May increase premium or provide credit Can be a –Participatory Wellness Program –Contingent Health Program

46. [ www.kiesling.com ] 46 Participatory Wellness Program Providing incentives for –Health club memberships –Smoking cessation classes –Preventive care

47. [ www.kiesling.com ] 47 Contingent Health Program Increasing employee rates for –Smoking –Body Mass Index –Blood Pressure –Cholesterol Levels

48. [ www.kiesling.com ] 48 W-2 Reporting of Health Costs If <250 W2 filed in prior year exemption for 2012 forms and 2013 until further guidance issued Reporting done in box 12, code DD Reporting is for information purposes only

49. [ www.kiesling.com ] 49 W-2 Reporting of Health Costs Exemptions –Long term care insurance –Worker compensation –Supplemental liability

50. [ www.kiesling.com ] 50 Resources Kaiser Family Foundation – www.kff.orgwww.kff.org www.healthcare.gov http://www.cms.gov/cciio/index.html http://www.irs.gov/uac/Affordable-Care- Act-Tax-Provisions-Homehttp://www.irs.gov/uac/Affordable-Care- Act-Tax-Provisions-Home

51. [ www.kiesling.com ] 51 Questions? Todd Thorson, Partner Kiesling Associates LLP tthorson@kiesling.com (515)221-4623 West Des Moines, IA Thank you!