healthcare reform - between the marketplace and the employer shared responsibility
DESCRIPTION
Healthcare Reform - Between the Marketplace and the Employer Shared Responsibility. Brad Wethington, CLU, ChFC, LUTCF Vice President – TPA Services. Friday, May 16, 2014. Agenda. Update on FFM and SBM 2014 Mid-year Enrollment Individual Mandate Employer Shared Responsibility Q&A. - PowerPoint PPT PresentationTRANSCRIPT
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Brad Wethington, CLU, ChFC, LUTCFVice President – TPA Services
Healthcare Reform - Between the Marketplace and the Employer Shared Responsibility
Friday, May 16, 2014
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Agenda
Update on FFM and SBM2014 Mid-year EnrollmentIndividual MandateEmployer Shared ResponsibilityQ&A
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2014 Open Enrollment
8 million enrollees 2.2M young adults (28 percent) 2.7M between 0 and 34 (34 percent)
85 percent qualified for subsidyIndiana: 132,423Last-minute surge:
3.8M; 1.2M 47 percent of total and 52 percent of young adults Young adult enrollment doubled
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2014 Open Enrollment
98M website visits33M calls to call centersAll States but One (Washington, DC) with State Exchange
failed to meet Youth goal of 39 percent (considered minimum to keep premiums low)
Wide variation by State, Ethnicity California highest percentage of people (43 percent) eligible for
marketplace enrollment Top 12 states enrolled at least 30 percent of their eligible
populations; bottom 17 states 20 percent or fewer Only 400,000 Latinos of 10.2 million eligible
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Results
Total enrollment on Exchange, through brokers & Medicaid expansion = 17.8M
No data on how many were already insuredPercentage of adults without insurance reduced from 18
percent of the adult population (40M uninsured) to 15 percent (33M uninsured) – a reduction of 7.26M
7.26M new insureds result in Q12014 health spending growth of 9.9 percent – fastest in over thirty years: Increase in elective surgeries Increase in costly medications
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Open Enrollment Still Open
Birth or adoption of a child Marriage, divorce Losing eligibility on parent’s health plan upon turning 26 Moving to a new area Special Enrollment Period (i.e., through July 1) for COBRA eligible Individuals whose individual market plans are renewing outside of
open enrollment have 60 days from the renewal date to select QHP
60-day Special Enrollment period beginning 5/1 for those currently in a high-risk pool who have not purchased coverage through marketplace
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Enrollment Costs & Plans For 2015
Cost per uninsured enrollee between $5.42 and $25,000State exchanges must be financially sustainable by end of
2015 when federal funding endsFFM States Contemplating SBM:
New Mexico Idaho
SBM States Contemplating FFM: Oregon and Maryland – already announced Minnesota, Nevada, Massachusetts - considering
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Individual Mandate
2014 $95 per adult; $47.50 per child (up to $285 for family) or 1 percent of
income, whichever is greater First $10,000 exempt; $20,000 for family Penalty pro-rated by the number of months without coverage No penalty for single gap of less than 3 months Hardship exemption for purchases made on or off exchange through
5/12015
$325 per adult; $162.50 per child (up to $975 for family) or 2 percent of income, whichever is greater
Same rules apply as 2014 except (maybe) the hardship exemption
Employer Shared Responsibility Rules
AKA Employer MandateFinal Rules Released February 10th
Rules Generally Take Effect 1/1/15
Important Changes from Rules Issued December, 2012
Phase in employer requirements for smaller employers (i.e., <100 FT equivalent employees) until 1/1/16
<50 FTE equivalent still exemptTo be eligible, employer will have to go through a
certification process
Certification Process
During period beginning on 2/9/14, and ending on December 31, 2014, employer certifies they did not reduce the size of their workforce or the overall hours of service of its employees in order to satisfy the workforce size condition
Employees of entities that are part of controlled group still aggregated when determining if mandate enforcement applies
Employee Count
Employer establishes 6 mo period in 2014 to count employees for 2015
If ER uses last few months as measurement period, Er will not have to have compliant plan in place until 4/1/15
Employer Shared Responsibility
Penalties not assessed if offer coverage to at least 70 percent of FTE (increases to 95 percent in 2016)
Employer may still be subject to the “b” penalty of $3,000 per individual employee if an otherwise eligible employee who was not offered coverage does seek and obtain subsidized coverage through exchange
Choice to exclude certain classes of workers in order to fall under 70% coverage may be deliberate for 2014, as this transition relief was intended to make the transition to the 30 hours/week standard of offering coverage easier for employers
Additional Rules
Non-calendar plans not required to comply until first renewal on-or-after 1/1/15 (applies to ERISA plan year defined in SPD)
No penalties to ER’s not offering coverage to dependents in ‘15 as long as they’re taking steps to offer in ‘16
Exempt Employees
Service hours of certain types of individuals not taken into consideration even if receiving some compensation (e.g., expense reimbursements): Bona fide volunteer Students participating in federal work-study program Individuals who work for religious organizations who have taken vow of
povertyRule provides detailed guidance on counting hours:
Adjunct faculty People with on-call duty responsibility (e.g., medical personnel, people
with layover hours like airline employees, commissioned sales people)
For More Information
NAHU: http://newsmanager.commpartners.com/nahuw/issues/2014-02-11/index.html
IRS: http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act
US Treasury Department:http://www.treasury.gov/press-center/press-releases/Documents/Fact%20Sheet%20021014.pdf
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Premium Subsidies
Premium and Cost-Sharing Subsidies Under Health Reform[2]
Income Required Premium Contribution Actuarial
value of coveragePercentage of
poverty line Percentage of income
100 - 133% 2% 94%
133 - 150% 3-4% 94%
150 - 200% 4-6.3% 87%
200 - 250% 6.3-8.1% 73%
250 - 300% 8.1-9.5% 70%
300 - 350% 9.50% 70%
350 - 400% 9.50% 70%
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Cost-Sharing Subsidy
Household Income (as percentage of Federal Poverty Line (FPL)
Reduction in Out-of-Pocket Liability
Single Family
100-200% Two-thirds of the maximum $2,114.55 $ 4,229.10 200-300% One-half of the maximum $3,175.00 $ 6,350.00 300-400% One-third of the maximum $4,233.29 $ 8,466.58 >400% Maximum $6,350.00 $12,700.00
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Maximum Liability
<200% of FPL $600
200% to 300% $1,500
300% to 400% $2,500
>400% Unlimited
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Questions