Post on 27-Dec-2015
transcript
Chasing and Updating the Affordable Care
Act…..2015
PRESENTED BY CHARLIE WAITS
GROUP HEALTH AND EMPLOYER INSURANCE SERVICES
It’s Still Health Insurance
Deductibles, 80/20, co-pays, lists
Small and Large Employers treated differently
Funding options are allowed (fully or self)
Insurance coverage is similar as years past, introducing Metallic Plans with EHB
Metallic Plans based on level of coverage, Platinum covers 90%, Gold 80%, Silver 70%, Bronze 60% of actuarial charges
Affordable Care Act?
Transitioning to people paying for medical coverage based on how much they make instead of how much it actually costs
The rest of the cost is made up from other sources, employers, tax payers, etc
Legislation for Employers and Insurance Plan
How to transition?
Individual Shared Responsibility (Pay or Play)
Employer Shared Responsibility (Pay or Play)
Marketplace
Discrimination guidelines (postponed)
Auto-Enrollment for over 200 (postponed)
Eligibility guidelines
Rating for individuals and small groups
Enforcement
……In Play Today For 2015 Employer Shared Responsibility Small Employers 1-49…..and transitional benefits (policies before 10.01.2013)
Medium Employer 50-99….transitional benefits…report under 6056
Large Employers 100 or more….1.2015, transitional benefits (12.27.2012), 70% offer
Insurance Reforms Orientation and the 90 day waiting period
Risk Management (Fees and Taxes)
Section 6055 and 6056 Reporting….due 2016
Mental Health and Parity
Hipaa Certification
Individuals Pay or Play
2014 Penalties the greater of $95 per person, $47.50 per child or 1% of income
2015 Penalties the greater of $325 per person, $162.50 per child or 2%
Maximum of 3 per family
They go up each year
Exemptions and Hardship Exemptions
The Marketplace/Exchange
Individuals or small groups get coverage
Several carries and plans in one place
Plan designs based on exchange guidelines which included Essential Health Benefits
States or Federal Government based
Notice about exchanges sent to employees and new hires within 14 days of hiring
Medicaid expanded to reduce exchange and group enrollment….and subsidies
Employer Eligibility for the Exchange and Subsidies
Employer must be small business
Small group status 50
Subsidies possible with 25 employees or less and less than an average of $50,000 salary
Insurance companies will not enforce participation/contribution rules…if there are 40 eligible employees and only 10 enroll…they will be required to issue coverage through the exchange
Information for Employers Considered a Small Business
Transitional plans granted extension from EHB until 2016…including youth dental/vision and must be in place or renewed before 10.1.2013
Stand/Alone Dental/Vision Plans meet EHB,and are Excepted Benefits like Cancer Policies
Large Deductibles are allowed
Mental Health and Parity Laws Apply unless self-funded plan or grandfathered plan
Groups with 50-99 FTE’s also granted relief until 1.1.2016….must indicate when reporting under Sections 6055 and 6056, (1095/C)
Individual Eligibility for the Exchange and/or Subsidies
Live in the US, US citizen, national, or lawfully present, and not incarcarated
Individual Subsidy based on percentage of FPL
Subsidies are not available for individuals if their employer provides affordable plans for their employees…at this time, dependents are also ineligible for subsidies if the employee only plan is affordable
Ratings
Individual or Family
Geographic rating area
Age banding 3 to 1, 21 year old to 64 or older
Tobacco use (50% more)
Taxes/Fees
REINSURANCE TAX OF $44 A YEAR, $3.67 PER MONTH, PER EMPLOYEE
PATIENT CENTER RESEARCH INSTITUTE FEE OF $2 PLUS MEDICAL INFLATION FOR 2015 AND SCHEDULED TO END WITH PLAN YEARS ENDING 09.30.2019
INSURANCE COMPANIES PAY ALSO, FEES BASED ON PREMIUM
Wellness Programs
Participatory Programs - available to all
Health Contingent Programs - 5 guidelines
…reward every year
…up to 30%, 50% for tobacco, of employee rate
…promote health or prevent disease
…alternates, either activity or outcome based
…disclose alternates
Tobacco use can offset employer 9.5%
Enforcement
IRS will enforce
Penalties for employers calculated monthly
Penalties for individuals on their tax return
Penalties are not tax-deductible
Control Groups
Five or fewer people in the group collectively own 80% or more of the equity in two separate trades or businesses
Own 50% or more in each of the two or more
**** Source is BakerHostetler law firm from Employee Benefit Advisors, June 2014
Employer Shared Responbility
Depending on which is is………
Is the Mandate Going to Remain
Is the Mandate Going to Be Repealed
Is the Mandate Going to Be Replaced
****Many think it will be amended to 8% of payroll taxes
Employer Shared Responsibility for ALE’s (Applicable Large Employer’s)
60% of AV…($6600/$13,200, family, out-of-pocket)
9.5% of income for lowest cost plan, employee cost 3 safe harbor’s…FPL, EE W-2, or Rate of Pay x 130
Penalty (some call it a tax) of $2000 per EE if not offered…..credit of 80 for 2015, 30 in 2016
Penalty (some call it a tax) of $3000 per full-time enrolling in exchange & subsidy
Penalties for large groups, calculated monthly
Controlled groups counted as one
Can use any consecutive 6 months of 2014 for 2015 to determine ALE status & 12 months stability
ESR and ALE, continued
ALE has 50 Full Time Equivalent Employees or more, example:
20 employees @ 24 hours a week, or 96 monthly 20 x 96/120 , or 1920/120 = 16
If you had 35 full-time employees, the total is 51 and are an ALE
Full time employee, 30 hours/week or 130 hours/month, for measurement period
Most hours per month for non-full time is 120…and divide total hours by 120
Volunteers, work study program, those outside US do not apply
FTE’s for purpose of ALE determination only
Seasonal workers not full time EE’s 6 months or less, and employment begins at the same time
If you are over 50 for fewer than 120 days, and those taking you over are seasonal for that time, then not ALE
And, 50-99 get transition relief in 2015
Eligibility Guidelines for Employers
Measurement period 12 months….monthly or, look back for eligibility…..for 2015 can be any consecutive 6 months instead of 12
Administration period….90 days + partial month maximum
Stabilization period, can be 12 months with any 6 month consecutive look back for 2015
30 hours a week or 130 hours a month
Must make a good faith determination of full time status at hiring
Seasonal and variable employment
Section 6055 Reporting for 2015
To IRS, 3.01.2016 (2.28 is a Sunday) or 3.31 if Electronic
Name, Address, EIN…Insurers often report, or Plan Sponsors of a Self-Insured Plan
Name, Address, TIN (dob if N/A) for all covered
Any other specified information on the form
To Employees By 01.31 each year, 02.01.2016 as 1.31 is a Sunday, in Year MEC Provided
Contact Info and Policy Number of Reporter
Can Send with W-2
Waiting for 1094, 1095, & Codes
Employers 250 or More….Electronic Required
Section 6056 Reportingfor 2015
For ALE’s Play or Pay and Tax-Credit Status
Due to IRS
Paper 03.01.2016 (2.28 is a Sunday)
Electronic submission 03.31.2016
All Plans, even if renewing mid-year
With 6055 if Self-Insured & 3rd Parties Allowed
To IRS Name, Address, EIN, Year, Contact info, If MEC and month there
was MEC, Offered MEC and by month, number of full-time employees either by month or payroll basis, months that MEC was offered to each full-time employee, employees shared of lowest cost MEC plan, name..address..TIN for each full-time employee, not dependents, eligible for MEC by month…other as required
Section 6056 Reporting (continued)
Reporting with codes…being developed Coverage was MEC and offered to dependents, total employees by month, effect
of waiting period, if no ee’s for a month, if the ALE is part of controlled group and the name, address, ein for each employer in the aggregated group, if designated gov’t group contact..their info, multi-employer group responsibility, 3rd party info, if MEC was offered to ee and dependents, cover not offered will it be play or pay penalty, or the ee was not full-time or not employed, coverage offered and not full-time for that month, ee was covered under the plan.
To Employee… If electronic, best guide is corresponds to W-2, with employees
consent, no website, or can mail with W-2 by 01.31.2016
Employer’s name, address, EIN and the information shown on the 6056 return with respect to that specific full-time employee
Discrimination Guidelines
Postponed with no target date provided
Guidelines not given…projections
Non-discrimination rules 105 (h)
Avoid favoring top 25%
All pay the same for the same coverage
Projected penalty is $100 per employee affected per month
Disclaimer
This presentation is for informational purposes only and not compliance, tax, or legal advice
It is not intended to be a complete and total review of the entire legislation, and based on the information current at time of preparation.
It is also virtually impossible to project the all differing needs and scenarios facing employers in a single presentation.
For specific needs for your company, please contact the specialists necessary for accurate evaluations.