Healthcare Reform – Next Steps for 2014 Tuesday, December 10, 2013 2:00 pm – 3:00 pm EST
Today’s Speakers Joe DiBella Executive Vice President of the Health & Welfare Practice Conner Strong & Buckelew Phyllis Saraceni Senior Vice President, Compliance & Audit Practice Leader Conner Strong & Buckelew / AIM 2
Welcome and Agenda Conner Strong & Buckelew’s sixteenth installment in ongoing series of webinars on key issues dealing with national healthcare reform Session will focus on 2014 healthcare reform next steps Special emphasis on action required to decide if adjustments or plan amendments are needed for 2014 changes 3
Major PPACA Milestones March 23, 2010: Patient Protection and Affordable Care Act (PPACA) signed into law June 28, 2012: US Supreme Court upholds constitutionality of law November 6, 2012: President Obama re-elected along with divided Congress July 2013: Employer mandate delay announced, until PY beginning in 2015 October 1, 2013: Exchange enrollment begins (website problems) October 28, 2013: Six week extension announced, until 3/31/2014, for Americans to sign up for coverage and avoid new individual mandate tax penalties November 14, 2013 : Transition period announced for individual/small group policies allowing insurers to renew cancelled policies January 1, 2014: Exchange coverage takes effect March 31, 2014 : Date Americans must have coverage to avoid individual mandate tax January 1, 2015: Employer mandate begins 4
Exchange/PPACA Implementation Continues Marketplace website rollout began 10/1/13 Continued concerns about viability of Marketplace website “glitches” / 20-30% of federal website still to be built - some part of website still “under - construction” including systems to transfer data - to insurers and make payments to them (administration looking to finish by 1/15/14) - enrollment / signups / security concerns / hacking incidents Miscalculated subsidies will need to be paid back (even though insurer received subsidy amount) Narrow networks – doctor/hospital of choice may not be available Policy cancellations Even supporters predicting chaos in 2014 as people start coming on / using benefits (less choice, higher costs/deductibles, increased potential for fraud, more bureaucratic headaches, more disincentives for providers to enter/stay in medical profession) 5
Challenges Ahead Law still facing significant resistance three plus years after passage Republicans and now some Democrats calling for repeal / delay / changes Law will be litigated for years - more than 65 current lawsuits targeting key provisions, such as: - contraceptive mandate (religious objectors) - case recently accepted by US Supreme Court for review next year - by its terms, law makes subsidies available only to people who buy insurance through state-run exchanges, and not to those in federal exchange (if successful would abolish subsidies in much of country and make employer mandate unenforceable) 6
Delays to Key Deadlines Delays more commonplace as key 2014 deadlines approach Delay of Marketplace verification of consumers’ health insurance (employer - coverage) status and incomes (both essential for successful function of exchange system) - Sign up date extended to 12/23/13 to get coverage effective 1/1/14 (gives insurers only 8 days to confirm information and start care) Six week extension granted – people have until 3/31/14 to sign up and still be - in compliance with mandate that all Americans carry health coverage in 2014 - Transition period announced for individual/small group policy renewal (for policies cancelled for 2014 market reforms) - Although originally scheduled to go into effect in 2014, employer mandate (pay or play) and related IRS information reporting rules now delayed to 2015 (with first information reports due in early 2016) • employer community pushing for future rulemaking to allow for use of Form W-2 as option for employers to satisfy pay or play reporting obligations 7
Participant Question Do you think PPACA exchanges will be delayed in 2014? Unlikely. HHS secretary, Kathleen Sebelius, and others in Obama administration have repeatedly said delaying exchanges would create too many logistical problems for government and insurers, as well as for states where exchanges are working (like California and Connecticut). But……continued delays in various provisions are very likely. 8
Participant Question Will some people be without insurance on January 1? Absolutely. There was never an expectation that every American would have insurance on 1/1/14. initial enrollment period was always set to run through 3/31/14 most young adults will make their decisions closer to 3/31/14 deadline even before implementation problems, CBO projected that 7M people would enroll in exchange plans in 2014 and 44M would remain uninsured for most, government fine for not having insurance much cheaper than buying coverage 9
Participant Question What is the current regulation under the FTE calculation? Mandate for businesses to decide whether they’ll provide health care or pay employer mandated (pay or play) fine now delayed until 2015 - companies should be looking at FT/PT data throughout 2014 to get more information on which to base decision keep informed - don’t be complacent about “pay or play” decisions - Any decisions on how part time adjunct faculty hours of work will be defined? - Existing rules still applicable (for now) - More guidance (and possible changes to rules) expected 10
Employer Mandate - Review Effective for PYs beginning in 2015: Employers with 50+ FTEs have to offer benefits to 95% of FTEs and dependents that meet coverage and cost levels or pay penalty Does not require employers to offer health insurance, but if they don’t they’ll pay tax: > If NO COVERAGE offered, penalty = $2,000/FTE minus first 30 FTEs > If SUBSTANDARD COVERAGE OFFERED, penalty = lesser of: » $3,000/FTE on exchange plan receiving credits/subsidies, or » $2,000/FTE minus first 30 FTEs 11
FTE Determination - Review Whether paying or playing, large employers (50+ FTEs) must decide which employees are working on average 30 hrs or more/wk for 2015 (previously effective in 2014) Reprieve from employer mandate may be short-lived - unless additional guidance issued, 1/1/14 starts clock for determining which employees will be considered FT and PT. As of 1/1/15 , must be prepared to: - Identify/count FTEs (30 or more hours/week) - Identify/count PTEs (less than 30 hours/week - not subject to penalty) - Identify variable hour and seasonal employees (can measure them over look- back/measurement period to determine if FT) complex measurement/administrative/stability period “safe harbors” - for summary of look-back measurement periods, see CSB 4/4/13 Webinar “ Preparing for the Full-Time Employee Determination ” – link to recording and presentation available on CSB Resource Center webpage if no transition rules provided going into 2015, must start counting hours in 2013/2014 12
FTE Determination - Review If paying , must be prepared to justify determinations about number of FTEs (used to determine penalty amount) If playing , be prepared to justify determinations about number of FTEs and demonstrate FTEs are eligible for minimum essential coverage (and be prepared to justify plan affordability and minimum value standard) 13
Participant Question What is the impact on mid-sized companies? All employers with health plans are required to comply with PPACA’s market reforms, and all employers with more than 50 FTEs are required to identify and report number of FTEs and analyze their plans for purposes of pay or play penalty rules to decide whether they’ll provide qualified health care or pay employer mandated (pay or play) fine. How will it affect my health care coverage? Each of us as individuals must be enrolled in qualified health plan for 2014 or pay individual mandate tax. Employer provided coverage will continue to provide higher-quality, comprehensive, cost-effective, efficiently administered benefits. Covered employees will continue to recognize value these plans represent. Employer plans will continue to remain very appealing. 14
Participant Question Regarding the measurement period: If a company chooses a 3 month or 6 month period, does the company have to do a measurement every 3 months or every 6 months? I have been told different things including that the company can do a 3 month measurement once a year? Measurement periods must run consecutively, so if you have 3 month measurement period you will need to run four measurement periods in single year. How are leaves, including FMLA, NJFLA or military leaves calculated into the measurement of an employee's average hours worked per week? Special (detailed) 26 week break period, rule of parity, and educational organization rules apply when counting hours – refer to our 4/4/13 Webinar or contact your CSB consultant for more information. 15
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