Post on 15-Jul-2015
transcript
Health Care in the WorkplaceDR. ALICE LOUISE KASSENSJOHN S. SHANNON CHAIR OF ECONOMICS ROANOKE COLLEGE
The Management Institute
April 2015
Learning Objectives
By the end of the session, participants will be able to:
▪ Discuss the major sections of the ACA
▪ Know the resources available for navigating the ACA
▪ Understand the potential economic impact of the legislation on individuals
▪ Understand the potential economic impact of the legislation on businesses
▪ Understand the potential economic impact of the legislation on the economy
History of health insurance and the employerWhen did employers begin offering as a benefit?
Has the distribution of total compensation changed in the last few decades?
History of health insurance and the employer
▪ Emergence of employer based health insurance with WW II
WHY?
▪ Growth through 1980s
▪ Decline of 6.3 percentage points over 1987-2004 period
▪ Plateau with minor drop in Great Recession
What do you think were the drivers behind these trends?
History of health insurance and the employer
0
10
20
30
40
50
60
70
80
90
100
%
All workers Part-time workers Full-time workers
Percentage of workers with access to employer-provided health insurance, private industry, 1991–2012
GROUP CHAT:
Why do you think
coverage for part-time
workers is less than
that of full-time
workers?
History of health insurance and the employer
Group work:
Get into groups and make the following lists:
1. Benefits of employer-based health insurance
2. Consequences of employer-based health insurance
Group question:
Would it be ideal to remove the link between employment and health insurance? Why or why not.
PPACA Overview
▪ Individual mandate
▪ Employer mandate
▪ Affordable Care Organizations
▪ Medicaid expansion
▪ Community rating
▪ Essential minimum benefits
Group question: What do you think are the overarching goals of these
sections of the bill?
PPACA Overview
▪ State exchanges
▪ SHOP
▪ Local navigators and other personnel
▪ Accountants
▪ Employer HR Department
▪ Healthcare.gov
▪ Local information sessions
Individual mandate
▪ Beginning in 2014, all individuals must buy health insurance with essential benefits (minimum essential coverage)
▪ Self-employed individuals can get health insurance through the state exchanges just as any other individual
▪ If do not buy health insurance, face a penalty (unless have an exemption)
▪ Penalty is the greater of:
▪ $95 or 1% of household income over the filing threshold in 2014
▪ $325 or 2% of household income over the filing threshold in 2015
▪ $695 or 2.5% of household income over the filing threshold in 2016
Individual mandate – penalty example
▪ Suppose you are single without children and earn $40,000 per year.
▪ The filing threshold for 2015 for single individual is $10,300
▪ The amount over the threshold is $40,000 - $10,300 = $29,700
▪ 2% of this is ~$600
Pay $600 in penalty or at least $3,511.92 per year in premiums (risk of penalty is low since cannot be denied coverage if get sick)
What
would
you do?
Sample plan (2015)
NOTE: Plan estimate for female, single, no dependents, 40 years old, non-smoker, 5’4”, 120 lbs.
Employer mandate overview
▪ Beginning January 1, 2016 employers with 50-99 FTE employees MUST offer health insurance that is:
▪ Affordable
▪ Offers minimum essential coverage
OR
▪ Pay a penalty
▪ If less than 50 FTE, not penalized if do not offer
▪ This is a delay in the employer mandate; employers with 100 or more workers begin January 1, 2015
“Pay or play” mandate
Employer mandate
Please read the handout titled:
“The labor market effects of the ACA’s employer mandate”
Employer mandate
▪ Employers must provide at least 60% of premium costs of employees health coverage
▪ Health coverage purchased for an employee cannot exceed 9.56% of their gross family income for employee only coverage.
▪ Employers must insure their employees if they have over 50 full time workers or they will face a penalty or "shared responsibility fee".
▪ The penalty for large businesses not covering their workers is $2000 per employee and $3000 if they purchase health insurance through the exchange with premium credits
▪ The first 30 workers are excluded from the penalty.
▪ High end insurance plans will be subject to a 40% excise tax.
▪ Employers with less than 25 full-time workers making less than $50,000 a year may be eligible for cost assistance via premium tax credits.
Affordability
Penalties
Employer mandate
▪ Minimum essential benefits:
▪ ambulatory patient services;
▪ emergency services; hospitalization;
▪ maternity and newborn care;
▪ mental health and substance use disorder services, including behavioral health treatment;
▪ prescription drugs;
▪ rehabilitative and habilitative services and devices;
▪ laboratory services;
▪ preventive and wellness services and chronic disease management;
▪ pediatric services, including oral and vision care
Employer mandate
2015Although firm
size determined
by FTE, penalty
is only assessed
on full-time
workers (30+
hours per week)
2016
See handout for
more details
Employer mandate
Details on the employer mandate from the Chamber of Commerce
Employer mandate
Determination and application of employer penalty by type of employee
Retrieved from http://www.fas.org/sgp/crs/misc/R41159.pdf 11/13/2013
What types of
incentives might
arise?
Employer mandate (less than 50 FTE)
Choices for “small employers”:
1. Are not penalized if do not offer point employees to individual exchanges (www.healthcare.gov)
2. Employers can buy health insurance from Small Business Health Options Program (SHOP) for 2015 (SHOP opens Nov. 2014)
▪ An online exchange (much like the exchange for individuals)
▪ Could quality for tax credits to offset costs (not permanent); can deduct remainder from taxes
▪ Way of attracting new employees increased total compensation?
3. Work with insurance company/broker to buy group coverage in private market (nothing new)
Employer mandate – more on SHOP
▪ Open to employers with 50 or fewer FTE employees
▪ In 2016 this will increase to those with 100 or fewer FTE employees
▪ Self-employed can use individual exchange, but not SHOP
▪ If offer through SHOP, must offer to all FT employees (30 or more hours per week)
▪ In many states, at least 70% of your eligible employees must enroll in your SHOP plan
▪ Employees sign up using the SHOP webpage after you have selected a plan
▪ Coverage will not take affect until approved by employer after enrollment period is over
Employer mandate
Group questions:
1. What do you think are the primary concerns for employers with respect to the employer mandate?
2. Have you observed any changes in your place of work?
3. Do you believe that your employer will be impacted by the employer mandate?
4. How do you think your employer will adapt to the employer mandate?
Current issues
Definition of full time work:
30 vs. 40 hours per week
Save American Workers Act 2015
HR 30 passed in January 2015
American Job Protection Act 2015
S 305 assigned to committee January 29, 2015 (2% chance of being enacted)
Group question:
7% of American workers work 30-34 hours per week while 44% work 40 hours per week.
What are the costs and consequences of redefining full time work under the ACA?
Thank you
Feel free to contact me –
Dr. Alice Louise Kassens
kassens@roanoke.edu
(540) 375-2428 (office)
@RnningEconomist
The PowerPoint presentation will be available on my blog:
www.therunningeconomist.blogspot.com