Outreach on the Affordable Care Act to
Farm Families in Wisconsin
Heidi JohnsonDane County University of Wisconsin-Extension
Crops and Soils Agent
Outreach Specifically to Farmers:Why me???
• ACA affects them in many ways – A tailored presentation
• Thinking like a farmer• Extension provides non-biased
information– Trusted resource
• Ag agents are already invited to farmer meetings
Where to begin?
• UW – Covering Kids and Families• You and health insurance: Making a
Smart Choice for Farm Families – Barbara O’Neil and Roberta Riportella
• UW- Center for Dairy Profitability• Information was refined through
discussions with other Ag Agents and farmers
Presenting the information
• Initial webinar to other agents – 32 attended
• Live presentation to farmers – 18 attended
• Made revisions• Statewide webinar for farmers – 24
counties, 95 people (snowstorm)• Many other presentations to farm
groups – around 220 people• 3 major ag papers wrote long
features
What did I add in for farmers?
• More statistics• The challenge of calculating AGI• Section 105, HRAs, HSAs, FSAs– Farmers think in terms of taxes!
• Scenarios for:– Farm families with young children– Farm families with adult children– Farm businesses
• Helping farmers calculate FTEs• Advising them to how to advise their
workers
Farm families as insurance consumers
• Farmers are more likely to have insurance than the average American (90% and 85%, respectively)
– Except dairy farms, only 64%!
• 57% of farmers rely on off-farm job for benefits
• Others rely on individual policies (17% vs. 9% of all Americans)
– Few group options previously
– May use a high-deductible policy paired with a HSA
• High deductible policies are often used to “protect the farm”
Adjusted Gross Income is the basis for determining subsidy
• AGI must be estimated for the coming year!• Difficult for famers with fluctuating income• If AGI is overestimated
– reduced subsidy – subsidy will be credited at tax time
• If underestimate AGI – more subsidy – will need to pay back at tax time
• Can choose to just take subsidy at tax time
Changes to Section 105 – HRA accounts
• Employers were able to set aside money tax free for employees to use to purchase their own insurance policy– This was also taken as a business expense
• Beginning in 2014, farms with more than 1 employee can no longer use pre-tax money to purchase individual plans
• Special thanks to Apel and Associates (Tracy Nodolf) for this information
Other tools: HRA,FSA and HSA• Health Reimbursement Account– Funded by Employer– Now can just be for Vision and Dental, not premiums!
• Flexible spending account – Funded by employee– Limit of $2500, Employer may add $500– To be used for medical expenses, not premiums
• Health savings account– Can be used in conjunction with high deductible plan– Limit of $3300 for individual, $6550 for family
Possible Farm Business Scenarios
• Husband and wife (minor children)
• Husband, wife and adult children under 26
• Multiple Families and non-family employees
Husband, wife, minor children
• Possibly in the past had Section 105 – wife as employee. Could still do this if she is the only employee.
• Individual marketplace– Family plan– Could qualify for subsidy depending on income
Example• Farming family with 2 minor children– Parents are 40 and 42– AGI = $55,000– Monroe, WI (prices may vary greatly by region)
• Results– 234% of poverty level– Maximum to pay would be 7.47% of income– Subsidy = $5523– Out of pocket premiums = $4111, $342/month
Husband, wife, adult child (24 yrs old)
• Children can be covered on family plans up to 26– Do not need to be dependents or living
with parents– Can be married
• The child’s income must be included in AGI
Example
• Total AGI (with child) = $92,000• Parents are 57 and 58, child is 24• Results– 471% of poverty– NO subsidy– Premiums = $14,888, $1240/month
Farm businesses with multiple families and non-family employees
• Group plan through SHOP – Eligible for tax credit if you meet criteria
• Group plan purchased outside of SHOP– Still taken as business expense
• Do not provide group insurance
Example
• 6 people in group plan: 36, 42, 24, 42, 60 and 63 years old
• Average salary $35,000• Monroe, WI• Results:– about $2600/month– Tax credit of $1300/month
Tax credit for larger business
• 20 employees• Average salary of $30,000/year• Tax credit goes down to 16% of premiums paid• If premiums are $60,000/year, credit would be
$ 9,600
How do you calculate your number of Full Time Equivalents (FTE) Employees?
• For every month – Number of employees that worked >130 hours– Then add up hours of part timers and divide by
120– Add two previous numbers together
• Do this for every month of the year and divide by twelve to get average
• Must be 50 or more, not 49.8
What if you have less than 50?
• Small employers (less than 50 FTEs) are not mandated to offer health insurance to full-time employees
• But small businesses are eligible for a tax credit to offset the cost of providing insurance
• Criteria for credit
– Less than 25 FTE employees, average salary of less than $50,000/year and contribute at least 50% of employees premuims
Requirements for Small Business Credit
• Maximum tax credit is 50% of the premiums paid
– Only receive maximum credit for 10 employees @ $25,000, more employees and higher salary fades out credit!
• SHOP (Small Business Health Option Program) Marketplace must be used
– WEBSITE DELAYED – must use paper application with agent
– https://www.healthcare.gov/marketplace/shop/#state=wisconsin
Calculating FTEs for small businesses• Exclude the following people entirely from your
calculation of hours worked– The owner(s) – Family members or dependents living in their household– Ministers considered by the common law tests to be self-
employed– Seasonal employees who work for you 120 or fewer days
during the tax year• Count up the total hours of all other employees in a tax
year and divide by 2080• If the result is not a whole number, round down to the
next lowest number
The Reaction
• Many good questions and interest– Private phone calls and conversations
• Questions often revealed the amount of misinformation out there– Farmers in Wisconsin tend conservative
• It is very difficult for people to get information about how health care choices will impact their taxes
Evaluation• 105 returned evaluations• Increase in knowledge in how the ACA impacts:– Insurance consumers (from 1.8 to 3.6)– Businesses (from 1.5 to 3.6)
• 90% indicated their questions were answered about their personal health insurance
• 88% indicated their questions were answered about their health insurance for their business
• Most said they would use the Smart Choices workbook
• Most said they would use the website links provided