healthcare reform
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Healthcare Reform. Putting the Pieces Together for Employers and Employees. 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 - PowerPoint PPT PresentationTRANSCRIPT
Healthcare ReformPutting the Pieces Together for
Employers and Employees
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
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
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
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
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
Enrolling with or without Navigator Assistance
Enroll Michigan
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
Common QuestionsDo I have to change companies and policies
No!**
Can I still use an agent or broker?
Yes!
What is a business? • By federal definition:
• Must have employees• Must not be immediate family
members
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
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
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
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
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
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
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
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
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
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
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%
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
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
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
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
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
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
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)
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
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)
Important to Calculations
• It is very important to understand that calculations are rounded down
• 49.999 FTE’s equal 49
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
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
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
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
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
Questions
