How ObamaCare Affects My Business

04/10/2023Copywrite 2013 TAG Employer Services 2

The Mandates Compliance & Reporting The New Market Preparing for 2014

What We Will Cover

04/10/2023Copywrite 2013 TAG Employer Services 3

Regulations not yet released Oklahoma case Feds not ready to start exchanges

***Check with your attorney

Times are still a changin’

04/10/2023Copywrite 2013 TAG Employer Services 4

Most States Opting Out

04/10/2023Copywrite 2013 TAG Employer Services 5

Mandates

04/10/2023Copywrite 2013 TAG Employer Services 6

Applies to Individual & all dependents Minimum coverage (60% of AV), exemption, or penalty

2014 $95 PP or 1% of Household Income (HI) 2015 $325 PP or 2% of HI 2016 $685 PP or 2.5% of HI

Exemption financial hardship, religious, earning below tax (12,500 / 19,500 in 2012)

0.9% Medicare withholding on wages over 200k (2013) 3.8% on Investment Income individuals over 200k /

250k

Individual Mandates

04/10/2023Copywrite 2013 TAG Employer Services 7

Small Business Credit - Under 25 EEs with less than $50,000 avg salary (35% maximum credit)

Individual Credit – Minimum coverage > 9.5% of HI 133%-400% of federal poverty level (43,320 / 88,200)

Can be applied directly to premium though exchange or on tax form

Tax Credits

04/10/2023Copywrite 2013 TAG Employer Services 8

No mgt carve-outs, separate waiting periods/contributions Penalty - $100 /day per incident up to

$500,000 per year Max 90 day waiting period – Can offer FOM 60

days Significant reporting 50+ FTEEs (small group

exempt for now) Over 200 FTEs must auto-enroll (on hold pending final

guidance)

Employers over 50 FTEEs Must Offer Coverage

Employer Mandates

04/10/2023Copywrite 2013 TAG Employer Services 9

Provide “affordable” insurance or pay 1 of 2 penalties

Employers over 50 FTEs Takes effect 1/1/14 (fiscal plan ok as long as 1/3rd

offered)

Mandates “Large Employers”

04/10/2023Copywrite 2013 TAG Employer Services 10

Over 50 FTE EEs Exclude seasonal working less than 4

months Employee common law definition…

maybe PEO, 1099, & Long Term Staffing

Common ownership follows section 414 Generally 50- 80% (including spouses, children, parents, siblings)

Are You A Large Employer?

04/10/2023Copywrite 2013 TAG Employer Services 11

EEs expected to have 30 hrs/wk or (130 hrs/mth) service Vacation, Accrued PTO, FMLA,

disability Seasonal still counts (good faith)

1 year look-back (6 or 12 moths in 2014) 12 months in 2015+

When is an employee eligible? No more than 90 days

Who do you have to offer coverage?

04/10/2023Copywrite 2013 TAG Employer Services 12

4980(h) “A” vs. “B” (“pay or play”)

A. Not Offering Minimum Essential Coverage to EE (& Children) $2,000/ yr per every FT EE over 30 EEs 100 EE company 70 x $2,000 =$140,000

Or B. Coverage not “Affordable”

Lowest Plan Employee Only Deduction > 9.5% of HI* Can use W2, Pay Rate, or 100-133% of poverty (11k / 22k)

$3,000/ yr per FT EE receiving a tax credit 100 EE company 10 x $3,000 = 30,000

Pick your Penalty

04/10/2023Copywrite 2013 TAG Employer Services 13

Reporting & Compliance

04/10/2023Copywrite 2013 TAG Employer Services 14

“5500 type” report - Discrimination Testing W2 - ER Cost of Medical, Rx, Clinic, Medicare, EAP &

Standalone Dental / Vision Summary of Benefit & Coverage (SBC) – all dependents

30 days prior or with 7 days on request Includes separated spouses and college students Penalty $1,000 per incident

Notice of material changes – 60 days prior Exchange notifications Summary Plan Document Grandfathered Plan Status

Reporting

04/10/2023Copywrite 2013 TAG Employer Services 15

What the Market Will Look Like

04/10/2023Copywrite 2013 TAG Employer Services 16

Rating based on Age (3 to 1 max), Geographic, Family Size, & Tobacco (1.5 to 1)

No medical underwriting or re-underwriting Rate increases are subject to review by

HHS Rates likely to increase because of “death

spiral”

Pricing

04/10/2023Copywrite 2013 TAG Employer Services 17

10 Essential Coverages (Med, Rx, Ambulatory, Preventative…)

Minimum Value / Affordability No more mini-med Max deductible $2,000 / $4,000 (may lose 100% plans) Max Out of Pocket follows HSA OOP limits ($6,250 /

$12,500) No more HSA/HDHP over 30 (maybe) No lifetime max Must cover clinical trials 80-85% claims usage or MLR Rebates Carriers supposed to release initial plans mid march

Product

04/10/2023Copywrite 2013 TAG Employer Services 18

Individual and Group offered in and out of exchanges

No big difference in AZ yet Potential tax credit Age banded

The Exchanges

04/10/2023Copywrite 2013 TAG Employer Services 19

If you like your plan you probably can’t keep it Same plan since March 21, 2010 – any change

disallows: EE contribution increase of 5% or more (based on

2010) Ded. or OOP max change of 15% or more Any change to coinsurance even if it is to better it Increase in copays more than $5 or 15% Eliminates any benefit

Does the carrier still offer it?

Grandfathered plans

04/10/2023Copywrite 2013 TAG Employer Services 20

(Partial) Self Insurance(High Deductible for the Employer)

Still Required No lifetime limits No copay

preventative Children up to 26 No rescission of

coverage except for fraud

Not Required Minimum Essential Coverage

High Deductibles & HSAs Medical Loss Ratio Limits Rate limitations (3-1 age

limit, medical underwriting…) Annual Insurance Fee Guaranteed Issue &

Renewability

04/10/2023Copywrite 2013 TAG Employer Services 21

Preparing for 2014

04/10/2023Copywrite 2013 TAG Employer Services 22

Partially self insured plans (healthier companies)

Service groups (check with attorney) Dual option plans Dropping Coverage (not generally

recommended) Managing size or hours (before July 2013) Targeted affordability Strategy must have valid business reason

Options Companies are Considering

04/10/2023Copywrite 2013 TAG Employer Services 23

Discrimination Results SBC Data Integrity (1 student address missing)

Notice Of Material Changes Sent

Expected March Health Costs: $4,324 Expected Affordability Penalties:

John Smith - Avg Weekly Hours 29.3 Frank Jones – Wages above threshold Steve Sanders – Qualifies for Credit $250

Total Health Costs $4,574

Sample Report

04/10/2023Copywrite 2013 TAG Employer Services 24

Product and Program Design Do you currently offer / can afford to offer

coverage? ROI on choices (self insurance, penalty choices, managing size…)

Employee Monitoring Compliance Testing & Reporting Tax Credit Calculation Education Updates

TAG HCR Compliance(Preventative ObamaCare)