1 AFFORDABLE CARE ACT TIMELINE & FEATURES Pages 2 - 5 CHECK –LIST SMALL EMPLOYERS LESS THAN 50 EMPLOYEES Pages 6 + 7 CHECK-LIST LARGE EMPLOYERS WITH MORE THAN 50 EMPLOYEES Pages 8 + 9 THE AFFORDABLE SUMMARY OF BENEFITS & COVERAGE & HHS CARE ACT (ACA) GLOSSARY OF TERMS Pages 10 - 21 WHAT AN EMPLOYER NEEDS ARE YOU SUBJECT TO MANDATE? TO KNOW DO YOU HAVE 50+ EMPLOYEES? Pages 22 + 23 The following information is not intended to be a comprehensive and thorough guide of all the topics under the ACA. This guide MANDATED HEALTH BENEFITS is for informational and discussion Page 24 purposes only. Employers may wish to contact their CPA or attorney for additional information and/or guidance. The information “COVERED CALIFORNIA” in this presentation is as of April 1, STATE OF CALIFORIA EXCHANGE 2013. Additional guidance and Pages 25 - 33 regulations will be forthcoming from the IRS, HHS and DOL as we approach January 1, 2014. We will make every effort to forward NON-DISCRIMINATION updates. Feel free to call us for Page 34 - 39 questions, details or information on other topics. ACA FEES & TAXES ADJUSTED COMMUNITY RATING Page 40 Kenneth F. Stamey, Broker CA License #0679857 125 No. Lincoln Street, Ste. E Dixon, CA 95620 MEDICAL LOSS RATIOS 800-427-7074 Page 41 www.prjinsurance.com KENNETH STAMEY CA LICENSE 0679857 FOR DISCUSSION PURPOSES ONLY
2/41 AFFORDABLE CARE ACT OF 2010 2010 → ACA passed March 23, 2010 and was effective September 23, 2010 → Plans existing before March 23, 2010 had the option to choose a “grandfathered” status when reform was enacted. → Certain provisions were applied to plans whether or not a plan held grandfathered status. → Select small businesses became eligible for phase one of the small business premium tax credit. → Employers that provided a Medicare Part D subsidy to retirees had to account for the future loss of the deductibility of this subsidy beginning in 2010 on liability and income statements. The Pre-Existing Condition Insurance Plan (PCIP) or temporary high-risk pool program, for people who could → not obtain individual health insurance coverage due to pre-existing conditions began. This program ends January 1, 2014. → The federal web health insurance information portage www.healthcare.gov was created. Non-grandfathered insured groups were required to comply with IRS Section 105(h) that prohibits discrimination in favor of highly compensated individuals. However, the IRS announced it would not enforce → this provision until release or further guidance about how these provisions would apply to insured groups. Guidance has still not been issued. → Lifetime limits on the dollar value of benefits for fully insurance and self-funded groups were prohibited. → Annual limits are only allowed through plan years beginning prior to January 1, 2014 and only on the HHS defined non-essential benefits. All plans had to begin coverage for dependents to age 26 (can be married and also be eligible for group → health insurance). However, through 2014, grandfathered plans will only have to provide coverage to those dependents that do not have another source of employer-sponsored coverage. → All plans had to begin covering pre-existing conditions for children 19 and under. → Health coverage rescissions were prohibited for all health insurance except for fraud or intentional misrepresentation. Plans covering emergency services in a hospital must also cover out-of-network emergency services as if they → were in-network services. Plans must also allow enrollees to designate any in-network doctor as their PCP and have a coverage appeal process. → All plans without grandfathering had to begin covering specific preventive care services with no cost-sharing. 2011 Fully insured plans were subject to the medical loss ratio requirements. Individual & small groups must adhere to an 80% MLR and large groups to an 85% MLR. If plans do not meet this requirement, each year → insurers have to pay policyholders rebates by August of the following year. Effective January 2013, the rebate is due by September. → Tax penalty on distributions from Health Savings Accounts (H.S.A.’s) that are not used for qualified medical expenses increase from 10% to 20%. → Reimbursement for over-the-counter drugs under H.S.A.’s, medical F.S.A.’s, H.R.A.’s and Archer M.S.A.’s were prohibited without a prescription. → Small employers were allowed to adopt new “simple cafeteria plans”. → The Class Act public long term care program was found to be fiscally unsustainable and repealed December 2012. → HSS & DOL began a study on the large group market by collecting data from Form 5500. KENNETH STAMEY CA LICENSE 0679857 FOR DISCUSSION PURPOSES ONLY
3/41 2012 → Employers filing 250 or more W-2 forms in 2012 are required to report the cost of the employer-sponsored health coverage. Health insurers are required to provide a Summary of Benefits & Coverage to employers. Employers are → required to provide all enrollees and applicants with a copy at Initial Enrollment, Open Enrollment or when a material change is made to the coverage → Group insurers and self-funded plans have to begin submitting quality reports to HHS. Report must state whether or not the benefits provided under the plan meets criteria established by HHS. → All non-grandfathered plans and individual health insurance must provide coverage for specified women’s preventive care service without cost-sharing requirements including contraceptives. 2013 → Premium tax on fully insured and self-funded group health plans to fund comparative effectiveness research program begins. → FSA contributions for medical expenses are limited to $2,500 per year (cap to be annually indexed for inflation). Medicare payroll tax increase of 0.9% (total 2.35%) goes into effect for individual filers with incomes over → $200,000 and joint filers with incomes over $250,000. In addition, there is a new 3.8% Medicare contribution on certain unearned income from high-income individuals. → For those itemizing their federal income taxes, the threshold for deducting unreimbursed medical expenses increases from 7.5% of AGI to 10% of AGI. The increase is waived for those 65 years or older through 2016. All employers are required to provide notices to their employees of the upcoming state exchange. This was → to be done by March 31, 2013 however the DOL has not released a template letter and so has been delayed pending further guidance from the DOL. 2014 → Individual Mandate tax penalties take effect. States are required to have health benefit exchanges up and running to service individuals and small- → employers. California’s exchange called “Covered California” is in full swing and has been approved by the HHS. For individual and fully insured groups, all plans must be offered on a guaranteed issue basis, preexisting → condition limitations will be prohibited, annual and lifetime limits will be fully prohibited (including grandfathered plans). → Size of small-employer group will be redefined as 1 to 100 employees (although states may elect to keep the size of a small group at 50 employees until 2016) California defines small group at 50 for now. Individual and small group plans will have to abide by strict modified community rating standards with → premium variations only allowed for age (3:1), tobacco use (1:5.1), family composition and geographic region. Experience rating will be prohibited. Individual and small group plans (in and out of the exchange) must include the Essential Health Benefits and → must cover mandated benefits, cost sharing requirements, out-of-pocket limits and minimum actuarial value of 60%. Premium assistance tax credits for individuals and families making between 100% to 400% of the federal → poverty level (FPL) begin. This is available only to those who qualify and purchase individual coverage through the state exchange. Expansion of the Medicaid program for all individuals, including childless adults who make up to 133% of the FPL begin. States can also create a separate non-Medicaid plan, called the Basic Health Plan, for those with → incomes between 133% and 200% FPL that do not have access to employer-sponsored coverage. Basic Health Plan rules have not been issued as yet. KENNETH STAMEY CA LICENSE 0679857 FOR DISCUSSION PURPOSES ONLY
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