PO POLI LITI TICA CAL L LAN LANDS DSCA CAPE PE Washingtons - PowerPoint PPT Presentation

PO POLI LITI TICA CAL L LAN LANDS DSCA CAPE PE Washington’s political dynamic is fractured House actions are tempered by conservative pressure and tight Democratic majority in the Senate and President Obama Demonstrating business impact extraordinarily important States are dealing with a host of health reform issues Exchanges Medicaid Expansion Budget Concerns Lack of Information from the Federal Government Extreme variances in attitudes about implementation including amongst branches of state government

FIN INAL L EM EMPLOYER YER MANDATE TE RU RULES LES  On Februar ary y 10, 2014, , the federal Department ment of Treasur ury y released the final nal rules on compliance iance with th the employer r shared re responsib nsibility ility re requireme irements nts under r the health h re reform rm law, which ch often referred to as the law’s employer mandate provisions. https ps:// ://s3.a 3.ama mazona onaws.co s.com/p m/pub ublic ic- inspe pectio ction.f n.federal ralreg regist ister.g .gov/2 v/2014-03082 3082.p .pdf df  The ru rules will genera rall lly y take effect on Ja Januar uary y 1, 1, 2015. .  The Departme tment nt of Treasur ury y also has a web web page avail ilab able le offering ing more guidance ance on the rules and det etermining mining employer r eligib ibility ility. . http:// tp://www ww.i .irs.g s.gov/uac/ /uac/Ne Newsr sroo oom/ m/Que Questio stions ns-and and- Answers-on on-Empl ployer-Sha Shared red-Resp sponsib nsibilit ility-Pr Provisio visions ns-Und Under-the he- Affordab able-Ca Care-Act ct

The final rules provide a number of important changes from the proposed rules issued in December 2012. They also provide a great deal of transition relief for employers of all sizes who are subject to the mandate.

MAJOR OR CHANGES NGES WE WILL LL DISCUSS SCUSS TODAY  Enfor orce ceme ment t delay y for mo most st  Transit ition ion relief ef for: groups ps with th 50-99 99 full-ti time me Establishing lishing a compl pliant iant equival alen ents ts plan by 2015 Obliga gati tion on clarity ty for  Non on-ca calen lenda dar r year r plans emplo loyers s with h empl mployee ees s Cover ering ing 95% % of your r in a multiem iempl ployer plan workforce ce  Guidance ance on how w to treat at Cover erage age of Depende endents ts emplo loyees es of staffing g firms, ms, PEOs, , school hool fa faculty ulty, Changes to the “rehire”  student dent workers, s, people ple calculation lation with h on-ca call ll and layover er  Change ges s to mon onthl thly y hours, , volunt untee eers, , clergy rgy meas asurem rement ent period iod options ions and ot other her emplo loyee ees s with h trick cky y hour urly ly calculati tions. ons.

EMPLOYER MANDATE BASIC COVERAGE RULES FOR LARGE EMPLOYERS Large rge employer ers may y be subje ject ct to an excis ise tax x if if at le least t one full ll- tim ime empl ployee whose ose hous useho ehold ld in incom ome is is bet etwee ween n 10 100-400% 400% of FPL le leve vel l receives es a premium um tax x credit it fo for Excha hang nge e cove vera rage e and “B” Penalty the emplo loyer r eit ither er : “A” Penalty Offers coverage to Fails to offer full-time employees minimum essential that does not meet coverage to full-time the law’s affordability employees and their or minimum value dependents standards

RU RULE LE ON N MINI NIMUM MUM ESSENTIAL ENTIAL COVERA ERAGE GE Minimum Essential Minimum Essential Coverage Includes: Coverage Does Not Include: • Insurance policies sold in the • Stand-alone HRAs that are not small or large group market integrated with a group health plan • Employer-sponsored group health plans (a group health plan is a • HIPAA-excepted benefits such as: welfare arrangement under ERISA stand-alone vision or dental, that provides medical care to cancer-only policies, indemnity employees or dependents through plans (hospital or disease), insurance, reimbursement or accident or disability plans, on-site otherwise) medical clinics and other types of coverage listed in PHSA §2791(c)

COVERAGE TESTS AFFORDABLE MINIMUM VALUE Employee’s share of the premium cannot Lowest t tier r plan must be at at least st a 6 60% exceed d 9.5% of househo ehold ld income. ome. actuari rial l va value ue Afforda dability ty test is based d on the cheapest est Ac Actuarial arial va value ue is based on cost-sh sharin ring g and minimum um va value ue plan the emp mployer r offers. s. out out-of of pocket t expenses, ses, not ot premium ums HRA contri ributi utions ons under r certain ain circum cumstan stances ces are fa factore ored d into o the Emp mployer r contri ributi tions ns to account nt-based sed afforda dability y calcula ulati tion. n. plans s will fa factor r into o actuarial arial va value ue Test is also based d on the emp mployee ee-only only rate, regardl dless ess of whet ethe her r or not ot the employee ee selects cts fa family y or dependent dent coverag rage Admini Ad nistr strati tion on has a c calcula culator or and there e are ot other r safe e harbor ors s emp mployer r can use Afforda dability ty test is based d on fa family income me but the final rule e codifies s wag wage-based sed safe Small groups ps that offer r Bronze e or higher her harbor ors s for emp mployer ers. s. meet et the minimum mum va value e standar dard d but there re is no safe harbor r for grandf dfathere thered d plans, s, self funded plans or “grandmothered” plans

How Do The “A” and “B” Penalties Work? Applica icable e emplo mployer ers s can be penalized ized eithe her for : The e A Penalt alty The e B Penalty lty Failing ling to offer er minimu imum m essen entia ial l Not ot offer ering cover erag age e to an emplo loyee e or a child ild coverage e to enough h full-time time emp mplo loyee ees s depen ende dent t that meets ts either her the minimu imum m va value lue and d their ir depen ende dent t childr ldren en test, t, the affor orda dabi bility lity test or bot oth The penalty for the failure to offer “affordable” The e penalt alty for the fa failu lure to offer er coverage e is and/or “minimum value” coverage is the $2,000 ,000 x full-time time emplo loyees es not ot covere red, d, lesse ser of two o penalty alty calc lcula latio ions: s: $3,000 per minus s the first st 30 emp mplo loyee ees, s, i.e. e. your first st 30 applic icable ble emplo loyee e or $2,00 000 0 times es ever ery full time e empl mployees ees are e exem empt t from om the full-time ime empl mployee, ee, minus s the first st 30 calc lculati lation. on. empl mployee ees. At least ast one e emp mplo loyee ee must receiv ive e subsidiz sidized d coverage e in the exchan hange e to trigger er penalties alties and you can’t be hit with both oth the A and B penalt altie ies, s, it is one e or the other ot er.

ENFORCEMENT IS DELAYED FOR 50+ GROUPS  The fina nal rules s phase se in the emp mployer r require quireme ment nts s for smaller er emp mployer ers, givi ving ng emp mployer ers s with th less s than n 100 full-ti time me equ quivalent nt emp mployees es (FTEs Es) but more than n 50 FTEs Es unti til Januar ary 1, 1, 2016, , to comp mply. To be e eligib gible, , an emp mployer er will have to go t through ugh a certi tific fication ation process cess to  demonstr nstrate e that t duri ring ng the period d beginni nning ng on Februa uary y 9, 2014, 4, and ending ng on December r 31, 1, 2014, 4, the emp mployer er does not ot reduce ce the size of its ts work rkforce ce or the overall hours of servi vice of its ts emp mployees es in order r to sati tisf sfy y the work rkforce ce size ze condi diti tion. n. Emp mployer ers s will have to count nt full-ti time me equ quivalent nt emp mployee ees s using the already dy  establishe hed d met ethod d of counti ting ng part-ti time emp mployees es in their eir emp mployee tot otal on a pro-rata rata basis, even thoug ugh h part-ti time me emp mployees es do not ot have be o offere red d coverage ge if f they y work rk an average of less s than n 30 hours a w week.  Emp mplo loyer ers s may establish lish a s six-mon onth th period od in 2014 4 to count t emp mployees es to det etermi rmine ne if the mandat ate applies s for the subsequent sequent year. .  If the emp mployer er uses es the last t few months hs of the year as its ts measure urement ent period od for applicability ty, the emp mployer er will not ot have to have a c comp mplian ant t plan in place for all emp mployees ees by January y 1. 1. The emp mployer er will l not ot be s subject ct to penalti ties es for the first st thre ree e months ths of the year if such ch an emp mployer er establishes hes a comp mpliant nt plan and offer ers s it to all eligib gible emp mployees es by A April 1. 1.