Update on Health Care ReformScott Gibbs

Senior Vice President

September 18, 2014

Guidance and interpretations relating to these matters are being released on a regular basis. BB&T Insurance Services is not providing legal or tax advice. To ensure compliance with requirements imposed by the IRS, any discussion of U.S. tax matters contained in this communication (including any attachments) is not intended and cannot be used by anyone to avoid IRS penalties. This material is for informational purposes only.

Disclaimer

• Before we get started – September, 2014

• Our presentations provide general information. This is not legal advice.

• Guidance on many provisions of the Patient Protection and Affordable Care Act (PPACA or ACA) are outstanding. New guidance may be issued regarding PPACA, or more generally, changes to statutes, rules, or regulations may be forthcoming that change the content of this presentation or alter the answers to some questions.

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What We Will Cover Today

• ACA –The Ever Changing Landscape

• What’s New – What are We Watching?

• Employer Shared Responsibility

• Employer Reporting Concerns & Next Steps

• Marketplace Updates

• Q & A

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2014 – Changing Landscape

Changes to the Changes – ACA

• Employer Mandate Delays

• Complex Transitional Relief & Safe Harbors

• Repealed– 1099 requirement April 2011– Employer Vouchers April 2011– CLASS ACT January 2013– Small employer deductible cap April 2014

• Delay – Unknown Start Date– Auto enrollment– Nondiscrimination rules– Contraceptive coverage closely held/non-profits as result of objections and

court cases

4

2014 – What We Are Watching

Halbig v. Burwell

• US District Court of Appeals in DC Circuit on 7/22/ 2014 2-1 held that the IRS regulation authorizing tax credits in FFM was invalid.– “Section 36B plainly makes subsidies available

in the Exchanges established by states," wrote Senior Circuit Judge Raymond Randolph in his majority opinion, where he was joined by Judge Thomas Griffith. "We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly." In his dissent, Judge Harry Edwards wrote that the judgment of the majority “portends disastrous consequences.”

– Expect to be appealed, potential for 5 million some exchange consumers (86% of enrollees in marketplace) to lose their subsidies and possibly find themselves without insurance – impacts 34-36 states

5

2014 – What We Are Watching

Halbig v. Burwell

• “In other words, the court reaffirmed the principle that the law is what Congress enacts — the text of the statute itself — and not the unexpressed intentions or hopes of legislators or a bill’s proponents.” – Washington Post, July 22, 2014

• “The IRS Rule, has the opposite effect: by allowing credits in such states, it exposes employers there to penalties and thereby gives the employer mandate broader reach.” – p9, Halbig v. Burwell

• On the same day, hours later, the 4th Circuit Court of Appeals in Richmond, VA, upheld the IRS rule permitting subsidies.

• The conflicting rulings raise the possibility that the dispute will ultimately be resolved by the Supreme Court. Source: Halbig v Burwell, CIAB Council Alert

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2014 – What We Are Watching

• Burwell v. Hobby Lobby Stores -

June 30, 2014 Supreme Court ruling

• 5-4 ruling held that HHS preventive care mandates regarding contraceptive coverage under ACA violates the Religious Freedom and Restoration ACT (RFRA)

• Closely held companies may claim exemptions from the HHS contraceptive coverage mandate. Hobby Lobby wanted to exclude 4 of 20 contraceptive methods required by HHS regulations

• New accommodations made by HHS but still controversial

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2014 – What We Are Watching

• Section 6056 new Employer reporting – S 2176 Commonsense Reporting Act of 2014 –modify and simplify

• HR 2725 Save American Workers Act –change 30 hour work week back to 40

• S 2546 – Auto Enroll Repeal Act – Employers with over 200 FTE auto enroll new employees

• Further Delays of Employer Penalty ??

• Marketplace Special Enrollment & Open Enrollment

• Reinsurance Fee Filings

• Cadillac tax

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Source: EY Washington Council

2014 – What We Are Watching

• 2 million people who signed up for Obamacare have “data discrepancies” – which could affect their subsidy eligibility. – Associated Press, June 4, 2014

• Over 300,000 discrepancies are related to citizenship, have not responded to inquires by HHS, and have until Sept 5 to respond. – New York Times, Aug. 13, 2014

• “Sick Drawn to New Coverage”: Among enrollees in the marketplace, around 27% have significant health issues such as diabetes, psychiatric conditions, asthma, heart problems or cancer. – Wall Street Journal, June 25, 2014

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Timetable of Top 5 Taxes in PPACA

Year Tax Takes Effect Tax Total Revenue 2013-2022

2013 Increased HI portion of payroll tax from 2.9% to 3.8%; increased tax applied to investment income for the first time

$317.7 Billion

2014 Health Insurance Tax (HIT) on fully insured plans based on carriers’ share of the marketplace

$101.7 Billion

2014 Tax on individuals who do not purchase health insurance

$55.0 Billion

2015 (delayed)

Penalty paid by employers that do not offer coverage

$106.0 Billion

2018 40% excise tax on “Cadillac” plans costing more than $10,200/$27,500

$111.0 Billion

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Source: Zywave

Checklist for Employers – News Clips Aug. 15, 2014

• July 31, 2014 – PCORI filing (self funded, form 720, $2 per participant)

• Sept 22, 2014 – HIPAA Business Associate Agreement updated

• eligibility, test affordability and minimum value

• Oct 14, 2014 – Medicare Part D Notice of Creditable Coverage

• SBC – Open enrollment – first day of OE

• Nov 5, 2014 – HPID (health plan identifier) number obtained

• Nov 14, 2014 – Submit enrollment info to HHS for reinsurance fee

• Dec 31, 2014 – deadline to amend FSA to $2,500 and adopt carryover

• Annual Notices – CHIP, Women’s Health and Cancer Right Act Notice

• Exchange Notice and COBRA Notices- make sure updated with recent changes

• Jan 31, 2015 – W2 reporting, box 12 Code DD – if over 250 forms

• January – first installment reinsurance fees

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Source: McDermott, Will & Emery 7/31

Employer Shared Responsibility

Employer Mandate Delay until 2015

• The employer mandate has been delayed until Jan. 1, 2015, for employers with

100 or more full-time (FT) employees.

• Employers subject to the mandate in

2015 must offer to at least 70% (not 95%) of employees and dependents to avoid penalty.

• Non-calendar-year plans – will begin compliance with employer responsibility at the start of their plan year in 2015, rather than on Jan. 1, 2015

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An ALE Meets Employer Shared Responsibility Mandate If:

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• Coverage is offered to:– At least 70% in 2015 of full-time employees and their children under

age 26 – phasing up to 95% in 2016. Spouses are not dependents.

9.56%

60%

• An employer’s coverage is affordable if:– The employee’s share of the premium for self-only coverage is 9.56% or

less of household income– Safe harbor affordability computations can be:

1. 9.56 (2015) percent of the employee’s W-2 wages2. The employee rate of pay per month (hourly rate x 130 or monthly

salary), or 3. FPL = Federal Poverty Level for a single individual

• An employer offers coverage with minimum value if:– The proportion of cost of covered services paid by the plan is at least

60% of the expected cost for a standard population

95%in 2016

70% in 2015

* Penalties are calculated and assessed monthly ($2,000 will be $166.67/month, $3,000 is $250/month). The maximum penalty is the lesser of the two penalties. Penalties are expected to increase each year by the growth in insurance premiums.

Employer Mandate – Pay or Play 2015 (100+)

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PAY

Does the insurance pay more than 60% of covered health care

expenses? AND Do all full-time employees pay less than 9.56% of income for

coverage? And offer to 100% of all FT

employees

Does the employer offer MEC coverage to 70% of all full-time employees in 2015?

95% in 2016?

Do any full-time employees obtain

subsidized coverage on an Exchange?

No penaltyfor

smallemployers

YES

YES

YES

Do any full-time employees obtain

subsidized coverage on an Exchange

NO

$3,000PENALTY

“unaffordable”

YES

Start

RecheckMonthly

$2,000PENALTY “No offer” coverage

Does the employer have at least 100 full-

time equivalent employees in 2015?

50 in 2016

Total Penalty* = $2,000 x (full-time EE count - 30)

2015 only - 80

Total Penalty* = $3,000 x each full-time employee receiving

subsidized Exchange coverage

YES

Full-time = 30 or more hours/weekFull-time equivalents =

full-time employees + (all part-time hours/120)

No penaltyas affordable

coverage is offered

NO

RecheckMonthly

NO

P L AYIRC §4980H(a) IRC §4980H(b)

Source:, Employer Shared Responsibility Provisions under ACA, Department of the Treasury, Feb. 10, 2014

Non-Calendar-Year Plans

• Employers who offer non-calendar-year plans and who have met certain requirements are not required to comply with section 4980H until the start of their ERISA plan years in 2015, rather than on Jan. 1, 2015.

• The rules for eligible plans are very similar to the conditions for transition relief in the final rule and begin on page 107 in the final rule.

• Major Conditions– Maintained non-calendar-year plan before Dec. 27, 2012

– Did not modify plan year after Dec. 27, 2012

– Did not change eligibility rules after Feb. 9, 2014

IMPORTANT NOTE: This provision applies to the ERISA plan year stipulated in the group’s plan documents, not their plan contract renewal date ,and these dates may differ.! If a group doesn’t have legal ERISA plan documents, the contract renewal date is the default date, but you need to

create plan documents for DOL enforcement! If a group has appropriate plan documents, they may want to modify their ERISA plan year to conform with the plan renewal date for ease of

administration, but they can only do that if the ERISA renewal date is later in the year than the plan contract renewal. If the ERISA date comes first, the plan needs to have all changes in effect on the

date of the ERISA plan anniversary!

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Non Calendar Year Transition Relief Conditions

Pre-2015 Eligibility

• Applies for employees who would be eligible for coverage on the first day of the 2015 plan year

• Under the eligibility terms in effect on Feb. 9, 2014

Significant % of ALL Employees

• Must have covered at least ¼ of employees as of any date in the 12-month period ending Feb. 9, 2014 OR

• Must have offered coverage to at least 1/3 of employees during the most recent open enrollment period before Feb. 9, 2014

Significant % of FT Employees

• Must have covered at least 1/3 of full-time employees as of any date in the 12-month period ending Feb. 9, 2014 OR

• Must have offered coverage to at least ½ of full-time employees during the most recent open enrollment period before Feb. 9, 2014

Source: Zywave

Identification of Full-Time Employees

• Final Regulations provide two measurement methods

– Monthly Measurement Method: Counting the employee’s hours of service for each month. This is a new method – month-to-month, 130 hours/month.

– Look-Back Measurement Method: Employer may determine the status of an employee as full-time during a future period (stability period) based on the hours of service in a prior period (measurement period). Full-time is average of 30 hours of service per week or 130 per calendar month.

• In general, an employer must use the same measurement period for all employees

– For example, if you have hourly employees, you cannot use the monthly measurement method for predictable hours of service of hourly employees and the look-back measurement method for variable-hour employees

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Safe Harbor for Variable-Hour/Seasonal Employees

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Stability PeriodCoverage provided (or not) – length depends on type of employee and whether full-time or not

Must be at least 6 months or same length as Measurement Period

Administrative PeriodTime for enrollment/disenrollment (up to 90 days)

Measurement Period

Counting hours of service (3-12 months) – because variable or otherwise uncertain hours – Look-Back

Optional for Employers: NEW = Initial MP; Ongoing = Standard MP

Source: Zywave

Full-Time Calculations

Final rules like the proposed differentiate between hourly and salaried workers

Hourly: Employer would be required to directly track the hours determined by full-time status

Salaried: Three different calculation methods1. Tracking hours

2. Utilization of “days worked” = a day would be deemed as 8 hours

3. Utilization of “weeks worked” = each week worked would be deemed as 40 hours

Can you use different methods for different salaried classifications?Must ensure the method does not substantially understate an employee’s hours of service.

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Know Which Employees You Have

What kind of employee is each worker?

• Full-Time Benefit-Eligible = 30 hours of service

• Variable-Hour: Not reasonably expected to work on average at least 30 hours per week, uncertain or fluctuating hours

• Seasonal: For six months or less

– Ski instructors

– Golf course workers

– Resort and hospitality

• Part-Time – Less than 30 hours, set/certain hours (e.g., will only ever work 25 hours)

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Full-Time Status Determination

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If YES,then

If YES, then

If unknown,

or cannot bereasonably

determined,then…

If NO, then

NEWemployee

is hired

Offer coverage to employee within 90

days of hire

Start the Initial Measurement Period (IMP) to determine if the

employee averages 30

or more hours per week

Did the employee average 30 hours in

the IMP?

Offer coverage for stability period or potentiallypay a penalty

No offer of coverage is required

Is employee expected to be full-

time?(30 hours of service per

week/130 hours service per month)

Hourly: Must calculate actual hours of service for hours recorded as worked, and hours for which payment is due for:

Vacation, holidays, illness, incapacity (including disability), layoff, jury duty, military duty, and leave of absence

Source:, Employer Shared Responsibility Provisions under ACA, Department of the Treasury, Feb. 10, 2014

Variable Hour Employees

2013 2014 2015

Measurement PeriodOctober 15, 2013– October 14, 2014

Stability PeriodJanuary 1, 2015 –

December 31, 2015

Administrative PeriodOctober 15, 2014 –December 31, 2014

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When calculating hours for purposes of the measurement period, the total hours of service are used

• For example, some weeks may the employee may have zero hours and other weeks the employee may have 70 hours.

Admin. Period

2015 Transitional Relief

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2013 2014 2015

A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

2015 Transitional MPApril 15, 2014 – Oct. 14, 2014

Admin. Period

2015 Stability PeriodJan. 1, 2015 through Dec. 31, 2015

2016 Measurement PeriodOct. 15, 2014– Oct. 14, 2015

Transition Measurement Period:• Is shorter than 12 months, but not less than 6 months;

and• Begins no later than July 1, 2014, and ends no earlier

than 90 days before the first day of the plan year beginning on or after Jan. 1, 2015

2015 TRANSITIONAL RELIEF: Employers can use six consecutive months in 2014 to determine 2015

stability period

2015 Transitional MPApril 15, 2014-Oct. 14, 2014

Measurement Periods

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Various Employee Categories

Regulations Address Final Treatment of:

• Volunteers

• Educational Employees, Student Work Study

• Seasonal Employees = 6 months or less

• Adjunct Faculty – 2¼ hrs. service

• Real Estate – Section 3508

• H2A and H2B Visa

• Foreign Employees

• Temp Staffing

• On-Call

• Rehire Rules = 13 consecutive weeks, except education, 26 weeks

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Special Cases – Hours of Service Guidance

• The rules provide that the service hours of certain types of individuals are not taken into consideration, even if these individuals receive some form of compensation (such as expense reimbursements).

• You don’t have to count:– Hours worked by individuals who meet a definition of a bona fide volunteer if

they aren’t receiving wages for that time.– Students participating in the federal work study program or a similar state-

based program. – Individuals who work for religious organizations and have taken a vow of

poverty.

• Regular student workers and paid interns do have to be counted, but you can apply variable hour rules and a standard measurement period to these employees.

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Rehire Rules for Variable Hour Employees

• For employees that are rehired within measurement periods:

– After a period of at least 26 13 Consecutive Weeks with no credited hours of service, the employer can restart the tracking calendar.

– After a period of less than 26 13 Consecutive Weeks with no credited hours of service, the rules of parity apply:

• Parity = employee is treated as a new employee if the period with no credited hours is at least 4 weeks long and is longer than the employee’s period of employment immediately before the period with no credited hours of service.

– Employers will need to compare the number of weeks the person is not employed versus the number of hours of service to determine if rehired employee is owed a credit of hours.

– This break-in-service period applies for both the look-back measurement method and the monthly measurement method.

– Educational Employees = 26 weeks

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Employer Checklist

Estimate whether the mandate is likely to be enforced for the group in 2015

Review eligibility for transition relief for non-calendar-year plans

Review plan to see who is offered coverage now, and the types of coverage offered, and if changes need to be made for 2016 to avoid penalties

Determine if you need to track variable-hour workers and how best to use measurement and stability periods to your advantage

Make decisions as to whom to offer health care coverage

Determine what IT changes and reporting/tracking automation available

Take steps to minimize penalties and cost of providing health care

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Employer Reporting Requirements

Key Dates

• July 31, 2014 – PCORI for plan year that ended in 2013

• November 5, 2014 – HPID Request for Large self Insured Plans

• November 15, 2014 – Reinsurance Form for 2014 plan

• January 1, 2015 – Employer Shared Responsibility

• January 1, 2015 – Collection of Data for 6055 & 6056

• January 15 – Reinsurance Payment (1 of 2) for 2014 plan

• November 15, 2015 – Reinsurance Payment (2 of 2) for 2014 plan

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HPID – Health Plan Identifier

• November 5, 2014 - Compliance Date for obtaining HPID … ten digit code used to identify health plans when using standard electronic transactions

• Covered entities include all HIPAA covered health plans

• Self funded plans and HRAs ---must file for own #

• Small plans (annual receipts of less than $5 million ) have a delay – Nov. 5, 2015

• Applying for and securing plans HPID is through the CMS.gov website.

• http://cms.gov/site-search/search-results.html?q=HPID

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Transitional Reinsurance Fee

• CMS series webinars this summer, Employers can Register on Pay.gov

• Access the ACA Transitional Reinsurance Program Annual Enrollment and Submission Form

• Enter information and form will auto-calculate the contribution amount

• Optional – employer can make one payment in January rather than split up

• 2014 Fees based on annual national contribution rate– 2014: $5.25/month ($63/year) x average number of covered lives

• $52.50 filed November 15, payable in January 15, 2015 for reinsurance and administrative expenses

• $10.50 invoiced in the fourth quarter of 2015, payable late fourth quarter 2015 to U.S. Treasury

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Contribution Submission Process Overview

• A reporting entity completes all of the following steps:

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In Pay.gov

Collect Data, Calculate Annual Enrollment Count

and Prepare Supporting

Documentation

Register in pay.gov Enter Payment Information

Upload Supporting

Documentation

Complete Contribution Form

1 2 3 4

Source: Centers for Medicare & Medicaid Services https://www.regtap.info/

Pay.Gov

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Source: Centers for Medicare & Medicaid Services https://www.regtap.info/

IRC 6055 and 6056 Reporting

– The IRS has issued final regulations on the health care reform law’s requirement that employers report health coverage information starting in 2015.

– This reporting will provide the government with information to administer ACA mandates, such as the large employer shared responsibility penalty and the individual mandate.

– Although the reporting remains extensive, at least plan sponsors have certainty now that the rules are finalized and can move forward with setting up the data collection and interfaces with IRS and their workforces needed to comply.

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ACA Reporting

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6055 IRS Return – Employee Fines• Used to determine if employees will be fined for not having coverage

• Includes employee and all dependent information

• Shows if employee is covered (enrolled or not enrolled), by month

• For fully-insured plans, carriers will file this, self-insured can combine with 6056 IRS Return

• Employee must receive all information on an annual statement 1095-B

• Forms 1094-B and 1095-B

6056 IRS Return – Employer Fines• Used to determine penalties the employer may be subject to for not offering coverage

• Self-insured and fully-insured employers need to file this

• To report on all ACA-deemed “Full-Time” employees for each month Was coverage available?

Was EE covered?

What was the EE Contribution amount for the lowest cost plan that month?

Who was offered coverage (EE only, EE & Dependents, etc.)?

If no coverage offered, is the employer subject to penalties (or why not)?

Was affordability safe harbor met (could the employee afford the lowest cost EE-only plan offered)?

• Employee must receive all information on an annual statement 1095-C

• Forms 1094-C and 1095-C Self Insured, 1095-C Section III “Covered Individuals” to be completed instead of the 1095-B return

Employer Reporting --Section 6055 & 6056

• New -- Draft version released and Draft instructions.

• Employers must furnish a written statement to each full time employee on or before January 31, 2016 for the 2015 calendar year. Indicate that coverage was offered for all 12 months of the calendar year or the specific months for which coverage was offered

• Can combine with W2 mailings. Only the SS# of the FT EE is reported

• Self Funded plans (and Insurers) need to make “reasonable attempts” of outreach ( defined as three) to obtain SSN/TIN of each employee or subscriber or their dependents whose SSN/TIN you don’t have. If you still don’t have after three attempts, you may use date of birth for any of those covered individuals

• Employers consider IT and system upgrades

Source: Zywave

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1094-B Transmittal of Health Coverage Information Returns

39

1095-B Health Coverage (6055 reporting – self funded, carriers)

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1094-C Transmittal (6056 Employer reporting)

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1094-C cont.

Codes for Section 4980H Transition Relief Indicator -- Form 1094-C Part III, Column (e)

A. 50-99 Transition Relief (ALEs with fewer than 100 full-time employees)

B.100 or more Transition Relief (ALEs with 100 or more full-time employees)

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1095-C – Offer and Coverage

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1095-C cont.

Indicator Codes for Employee Offer and Coverage – Form 1095-C Part II, Line 14 Code Series #1, Offer of Coverage

1A. Qualified Offer: Minimum Essential Coverage providing Minimum Value offered to full-time employee with employee contribution for self-only coverage equal to or less than 9.5% mainland single federal poverty line and Minimum Essential Coverage offered to spouse and dependent(s).

1B. Minimum Essential Coverage providing Minimum Value offered to employee only.

1C. Minimum Essential Coverage providing Minimum Value offered to employee and at least Minimum Essential Coverage offered to dependent(s) (not spouse).

1D. Minimum Essential Coverage providing Minimum Value offered to employee and at least Minimum Essential Coverage offered to spouse (not dependent(s)).

1E. Minimum Essential Coverage providing Minimum Value offered to employee and at least Minimum Essential Coverage offered to dependent(s) and spouse.

1F. Minimum Essential Coverage not providing Minimum Value offered to employee, or employee and spouse or dependent(s), or employee, spouse and dependents.

1G. Offer of coverage to employee who was not a full-time employee for any month of the calendar year and who enrolled in self-insured coverage for one or more months of the calendar year.

1H. No offer of coverage (employee not offered any health coverage or employee offered coverage not providing Minimum Essential Coverage).

1I. Qualified Offer Transition Relief 2015: Employee (and spouse or dependents) received no offer of coverage, or received an offer of coverage that is not a Qualified Offer, or received a Qualified Offer for less than all 12 Months.

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Code Series 2 Section 4980H Safe Harbor Codes and Other Relief for Employers - Form 1095 - C Part II, Line 16

2A. Employee not employed during the month.

2B. Employee not a full-time employee.

2C. Employee enrolled in coverage offered.

2D. Employee in a section 4980H(b) limited non assessment period.

2E. Multiemployer interim rule relief.

2F. Section 4980H affordability Form W-2 safe harbor.

2G. Section 4980H affordability federal poverty line safe harbor.

2H. Section 4980H affordability rate of pay safe harbor.

2I. Non-calendar year transition relief applies to this employee.

Summary of Reporting

Fully Insured Employers:• Carrier will send

1094-B Transmittal to IRS

1095-B Coverage to each Employee and one for each Employee to the IRS

• You must send 1094-C Transmittal to IRS

ACA Manager will send you the information for line 20 and Part III column “(c) Total Employee Count for ALE”

1095-C Offer and Coverage (without Section III completed) to each EE and one for each EE to the IRS ACA Manager will send the forms directly to the EE’s and will send you copies so you can file electronically with the IRS

Self-Insured Employers:• Carrier will send - nothing

• You must send 1094-C Transmittal to IRS

ACA Manager will send you the information for line 20 and Part III column “(c) Total Employee Count for ALE”

1095-C Offer and Coverage (with Section III completed) to each EE and one for each EE to the IRS ACA Manager will send the forms directly to the EE’s and will send you copies so you can file electronically with the IRS

45

Cadillac Tax – 2018

• For tax years beginning in 2018, annual limit threshold will be:

– $10,200 individual

– $27,500 family

• A non-deductible 40% excise tax will be imposed on insurance companies, employers, and/or plans for amounts exceeding the threshold to include:

– Aggregate cost of employee premiums (COBRA equivalents)

– Takes into account pre-tax premiums and reimbursements from FSA, HRA, and contributions to HSA or medical savings accounts

– Applies to self-funded and fully insured; will be reported on W-2

– 60% of employers surveyed expect to trigger tax if they don’t adjust plans (Towers Watson study Nov 2013)

• Practical approaches to take now: In anticipation of 2018, some employers are scaling back their health coverage under the annual limits and offering high- deductible health plans. Increasingly focusing on wellness and other initiatives, like worksite health clinics.

46

Source: Zywave

Marketplace and Exchanges

Page 48

State-run exchanges; 15 exchanges; 2,573,585 individualsFederally run/supported exchanges; 36 exchanges; 5,446,178 individuals

State-by-state breakdown of individuals who selected a plan in 2014 open enrollment

CA1,405,102

CO125,402

CT: 79,192

DC: 10,714

HI8,592

KY82,747

MD: 67,757

MA: 31,695

MN48,495

NV45,390

NY370,451

OR68,308

RI: 28,485

VT: 38,048

WA163,207

IA29,163

NM32,062

AL97,870

AK12,890

AZ120,071 AR

43,446

DE: 14,087

FL983,775

GA316,543

IL217,492

IN132,423

ID76,061

KS57,013

LA101,778

ME44,258

MI272,539

MS61,494

MO152,335

MT36,584

NE42,975

NH: 40,262

NJ: 161,775

NC357,584

ND10,597

OH154,668

OK69,221

PA318,077

SC118,324

SD13,104

TN151,352

TX733,757

UT84,601

VA216,356

WV19,856

WI139,815WY

11,970

Source: Department of Health and Human Services; May 1, 2014 Office of the Assistant Secretary for Planning and Evaluation Issue Brief

Enrollment numbers for the period: October 1, 2013 – April 15, 2014

Washington Council Ernst & Young

Who Will Use the Marketplace?

• HHS report released March 11, 2014 – for enrollment from Oct. 1, 2013, to March 1, 2014

• Plans chosen:– 63% Silver

– 18% Bronze

– 11% Gold

– 6% Platinum

– 1% Catastrophic

• 83% received subsidies

• 45% male, 55% female

• Impact of announcement extending transitional policies in individual/small group to keep noncompliant ACA to remain in place through plan years that begin on or before Oct. 1, 2016?

49

55-64

45-54

35-44

26-34

18-25

Under 18

0% 5% 10% 15% 20% 25% 30% 35%

30%

23%

16%

16%

10%

6%

Enrollment by Age

Source: HHS

Marketplace Challenges

• Marketplace Special Enrollment – 60 days from:– Getting Married

– Having a baby

– Adopting a child or placing a child for adoption or foster care

– Moving outside your insurer’s coverage area

– Losing other health coverage—due to losing job-based coverage, divorce, the end of an individual policy plan year in 2014, COBRA expiration, aging off a parent’s plan, losing eligibility for Medicaid or CHIP and similar circumstances. Important: Voluntarily ending coverage doesn’t qualify you for a special enrollment period. Neither does losing coverage that doesn’t qualify as minimum essential coverage.

– Gaining citizenship

– Leaving incarceration

– Gaining status as member of an Indian tribe. Members of federally recognized Indian tribes can sign up for or change plans once per month throughout the year.

– For people already enrolled in Marketplace coverage: Having a change in income or household status that affects eligibility for premium tax credits or cost-sharing reductions

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Subsidy Settle Ups…2015

• It’s important to know – paybacks or clawbacks are possible if the annual actual income ends up being higher than the estimated income on the Marketplace application. These are also called true-ups or reconciliations.

• Think about mid-year life change events – getting married, changing jobs, picking up a shift

• How to fix? Update the Exchange right away.

• If unreported, adjustments will be taken by the IRS from taxpayer’s refund check or, if underestimation occurs, check would be sent to the tax filer

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Now is the Time:Employer Planning and Questions to Explore

• Know Your Size – Counting FTE (full time equivalents) is key for compliance in 2015. Do you have 50? Are you under 99? Are you over 100?

• Know the Nuances of Pay or Play – Have you considered the control group rules, transition relief rules, and identified steps to take to avoid penalties?

• Know the Offer of Coverage – Will you offer affordable and minimum value coverage? Which plans? Ensure Offer made after a 90 day waiting period? Document offer to refute penalty?

• Know Your Workforce – Can you identify full time, variable, seasonal, part time workers? Can you determine how to track hours and who is eligible?

• Know How to Measure – Will you adopt the monthly measurement period? Will you adopt a look back measurement period? Track breaks in service?

• Know Other Strategies – Could you curtail spousal coverage? Could you work with a staffing firm? Should Workforce restructuring be considered?

• Know Your Company Culture – Why offer benefits? Will ceasing offering coverage be a disadvantage for talent recruitment?

• Know What to Report –  Are you reporting all? W2s disclosure, PCORI fees, Reinsurance Fees, FLSA exchange notices, Summary of Benefits and Coverage

• Know What May be Coming Next – Are you prepared for a DOL Audit? Do you have Plans for Cadillac tax in 2018? Considering a Private Exchange?

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Q&A

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