Download - Healthcare Reform
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Healthcare ReformPutting the Pieces Together for
Employers and Employees
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Healthcare and Small Business
• Without reform small business will spend approximately $2.4 trillion on healthcare for their employees in the next decade
• Reform could save small business an approximate $885 billion
• 80% of those not offering benefits is due to high cost
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What is a SHOP Marketplace• Small Business Health Option Program =
SHOP
• Designed especially for small business and small non-profits
• A Marketplace is a competitive market place where insurers can offer their products if they meet specified criteria
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Navigating the Marketplace
• Navigators will assist all enrollees through the process in and outside the SHOP
• There are two types of helpers, Navigators and Certified Application Councilors (CAC)
• You can find them listed and EnrollMichigan.com
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In Michigan• Michigan is divided into 10
regions
• Each region will have a “lead Navigator” and many supporting entities
• Information is available at Enroll Michigan www.enrollmichigan.com
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What Plans will be Available in the Marketplace?
• The “Marketplace will offer 4 levels of coverage:• Bronze- Covers 60% of healthcare cost• Silver- Covers 70% of healthcare cost• Gold – Covers 80% of healthcare cost• Platinum – Covers 90% of healthcare cost
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Enrolling with or without Navigator Assistance
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Enroll Michigan
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Marketplace Support• Marketplaces are mandated to be user friendly
and offer support other than internet
• Language specific access
• Live phone support for those unable to utilize internet or lack computer access
• No wrong door for enrollment
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Common QuestionsDo I have to change companies and policies
No!**
Can I still use an agent or broker?
Yes!
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What is a business? • By federal definition:
• Must have employees• Must not be immediate family
members
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Question?• Do employers have to provide insurance
coverage for their employees?
• Answer: There is no mandate for businesses under 50 full time equivalent employees (FTE’s) to provide coverage, but you may be able to qualify for tax credits if you do
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Facts• 85.1 % of Michigan Small Business
would qualify for a tax credit
• 39.1% of those could qualify for the maximum tax credit
• There are 266 small businesses for every large business in Michigan
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Self Employed• Must conform to the individual mandate• Can use the individual Marketplace• Can use an agent or broker• Has a broad choice for coverage options• Do qualify for income-based tax credits
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Self-Employed Tax Credits• To receive tax credits, policies must be
purchased through the Marketplace• Policy premiums will be designed to keep
cost between 2-9.5% of annual income• Cost based on reported income tax filings• Credits can be pre-paid
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Small Business
• Business under 50 FTE’s are not required to provide benefits
• Will be able to access Navigators• Do not have to change coverage**• Medicaid – Medicare enrolled
employees are not counted towards your FTE’s
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Small Business Tax Credits
• Available to businesses of 25 or less• Must pay at least 50% of premium cost
(individual)• Credit is based on business income tax • IRS form 8941 to file for your credit
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What are the Credits?• = or < 10 employees (FTE’s)• Pay at least 50% of the individual policy
premium• Average wage of < $25,000• Qualify for 35% from years 2010-2013• Qualify for 50% from 2014 forward for
any two years
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Business Credits Continued
• Businesses 11-25 employees• Pays at least 50% of premium cost
(individual)• Qualifies for credits on a sliding scale• Available for tax years 2010-2013• 2014 forward for any two years
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Firm Size $25,000 $30,000 $35,000 $40,000 $45,000 $50,000
10 25% 20% 15% 10% 5% 0%
11 23% 18% 13% 8% 3% 0%
12 22% 17% 12% 7% 2% 0%
13 20% 15% 10% 5% 0% 0%
14 18% 13% 8% 3% 0% 0%
15 17% 12% 7% 2% 0% 0%
16 15% 10% 5% 0% 0% 0%
17 13% 8% 3% 0% 0% 0%
18 12% 7% 2% 0% 0% 0%
19 10% 5% 0% 0% 0% 0%
20 8% 3% 0% 0% 0% 0%
21 7% 2% 0% 0% 0% 0%
22 5% 0% 0% 0% 0% 0%
23 3% 0% 0% 0% 0% 0%
24 2% 0% 0% 0% 0% 0%
25 0% 0% 0% 0% 0% 0%
Non-Profit tax credits 2010-2013
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Firm Size 2010-13 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000
10 35% 28% 21% 14% 7% 0%
11 33% 26% 19% 12% 5% 0%
12 30% 23% 16% 9% 2% 0%
13 28% 21% 14% 7% 0% 0%
14 26% 19% 12% 5% 0% 0%
15 23% 16% 9% 2% 0% 0%
16 21% 14% 7% 0% 0% 0%
17 19% 12% 5% 0% 0% 0%
18 16% 9% 2% 0% 0% 0%
19 14% 7% 0% 0% 0% 0%
20 12% 5% 0% 0% 0% 0%
21 9% 2% 0% 0% 0% 0%
22 7% 0% 0% 0% 0% 0%
23 5% 0% 0% 0% 0% 0%
24 2% 0% 0% 0% 0% 0%
25 0% 0% 0% 0% 0% 0%
For-Profit tax credits 2010-2013
Non-profitYears
2014 Forward
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For-Profit tax credits 2014 forward for any two years
Firm Size 2014 + $25,000 $30,000 $35,000 $40,000 $45,000 $50,000
10 50% 40% 30% 20% 10% 0%
11 47% 37% 27% 17% 7% 0%
12 43% 33% 23% 13% 3% 0%
13 40% 30% 20% 10% 0% 0%
14 37% 27% 17% 7% 0% 0%
15 33% 23% 13% 3% 0% 0%
16 30% 20% 10% 0% 0% 0%
17 27% 17% 7% 0% 0% 0%
18 23% 13% 3% 0% 0% 0%
19 20% 10% 0% 0% 0% 0%
20 17% 7% 0% 0% 0% 0%
21 13% 3% 0% 0% 0% 0%
22 10% 0% 0% 0% 0% 0%
23 7% 0% 0% 0% 0% 0%
24 3% 0% 0% 0% 0% 0%
25 0% 0% 0% 0% 0% 0%
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Benefit ExplanationsUnder IRC section 105 and 106
• Employee provided health benefits are generally excluded from income of employees
• If a plan discriminates in the favor of a highly compensated employee, that could be considered as a taxable income
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ACA Employee Notifications• Employee notification must include:
• Coverage options available in the new health insurance marketplaces
• Must provide its employees with written notice of the existence of a Marketplace
• Contact information for the Marketplace
• The services provided by a Marketplace
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Notifications Continued
• That the employee may be eligible for a premium tax credit if the employee purchases coverage through a Marketplace
• That the employee may lose any employer contribution to a health benefit plan, if offered by that employer
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Where can I get these forms
• Two forms are available from DOL
• One for companies who provide benefits
• One for those who do not offer benefits
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Impact of ACA Depends on Business Size
Large Employers (50+ workers)◦Access to SHOP Exchange (employers with
more than 100 employees, will be eligible after 2016)
◦Employer Assessment
◦Coverage requirements
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Large Business
• Under the PPACA a large business is 50 and larger FTE’s
• Mandates will be in effect 1/01/15• Assessments are calculated and
enforced by the IRS• Must provide a level of coverage that
meets value and cost
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What Are the Requirements?
• Required to provide minimum value coverage for full-time (more than 30 hrs./week)
• The plan must pay 60% of “expected” health care costs
• Must be “affordable” for full-time staff – no more than 9.5% of employee income (reported in box 1 of form W-2)
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How do I know if my plan meets these thresholds?
• You can use the value calculator
• Navigators can help you
• For conversation, bronze level coverage
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How do I count employees?Calculation – Total number of hours worked by PT
employees, divided by 120◦Organization has 35 FTE, plus an additional 20 part-
time who all work 24 hours/week (96 hrs/month)◦1920/120 = 16 part-time staff. 16 +35 = 51
◦Equation: 20 employees working 24 per week = 96 hours per employee per month. 96 times 20 equals 1920 hours of part time labor per month. Divide 1920 by 120 (30 hours per week, 4 weeks per month) will equal your FTE’s. (16 in this case)
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Important to Calculations
• It is very important to understand that calculations are rounded down
• 49.999 FTE’s equal 49
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Assessment equals number of full-time employees, minus 30, times $2,000 divided by 12
Example:50 employees-30 employees = 2020 X $2000 = $40,000$40,000 divided by 12 = $3333.34 per month
Calculations Continued
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Employer Assessment
• Example• What happens if an Employer does not
offer health insurance, and one or more employees purchases coverage on the Marketplace and receives a tax credit?
An assessment may be levied
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How will I know if I owe an Employer Shared Responsibility payment?
• The IRS will contact employers on potential liability
• Provide them with the opportunity to respond before any assessment is levied
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Proposed Rules and GuidanceEmployee contributions
• If my employee is obligated to pay his/her contribution other than by payroll deduction and is late, am I required to still provide benefits for that month?
• Not for that month
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Proposed Rules and Guidance
• If my employee has “elective deferrals” must the 9.5% affordability standard be met after these are calculated?
NO• Calculations are done prior to elective
deferrals
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Questions