GRA Special Session: Health Care Reform

Welcome to the Georgia Restaurant Association

Healthcare Special Session:

What You Need To KnowJune 7, 2010

Patrick Cuccaro, General Manager, Affairs to Remember Caterers

Secretary, Georgia Restaurant Association Executive Committee

Chair, Catering Roundtable

Welcome & Opening Remarks

Thank You To Our Meeting Host

Recently named one of Esquire’s “Best New Restaurants of 2009,” Pacci Ristorante is the modern translation of the classic Italian steakhouse.  Pacci combines the flavors and timeless elegance of Old World Italy with the urban lifestyle of Midtown Atlanta.  Executive Chef Keira Moritz’s signature menu

includes the use of fresh and seasonal ingredients in each dish.  This restaurant truly reflects a warm sense of Italian conviviality, offering Atlantans fine food for every meal of the day, and meals for every occasion.  Pacci also

features a stylish rooftop bar and lounge area called AltoRex Rooftop Lounge. 

Thank You To Our Sponsors

Since 1868, J. Smith Lanier & Co. has remained one of the nation’s leading insurance brokerage, employee benefits and risk management

consulting firms. Through a network of offices spanning across five southeastern states, our employee shareholders provide an

unmatched commitment and responsiveness to everyone we serve.

Thank You To Our Sponsors

UnitedHealthcare (www.unitedhealthcare.com) provides a full spectrum of consumer-oriented health benefit plans and services. The company organizes access to quality, affordable health care services on behalf of more than 25 million individual consumers, contracting directly with more than 560,000 physicians and care

professionals and 4,800 hospitals nationwide to offer them broad, convenient access to services nationwide.

Kat Cole, Vice President, Hooters of America, Inc. Chair, Georgia Restaurant Association Executive

Committee Chair, Georgia Restaurant Association PAC Board

Presentation of NRA Information

PUBLIC POLICY CONTEXT

Overview and Status

H.R. 3590, Patient Protection and Affordable Care Act, signed by President into law (PL 111-148) on March 23, 2010.

H.R. 4872, the Health Care and Education Reconciliation Act of 2010, modified PL 111-148 and signed into law on March 30, 2010.

Over the next several years, federal and state agencies will write regulations to clarify and implement the law. For example: Dept. of Labor, Dept. of Health and Human

Services, Internal Revenue Service.

The Association will be actively engaged in the regulatory process.

Implementation Timeline

Implementation Timeline2010 Small business tax credit available 1/1/2010. HHS informational website established – 7/1/2010. Grandfathered plans – some changes required for plan years

beginning after 9/23/2010.

2011 Employer report health care coverage costs on W-2 forms – Applies

to tax years beginning after 12/31/2010. Flexible Spending Account contribution limits begin – no more than

$2500, Begins 2011, indexed in 2013. Over-the-counter medicines may no longer be reimbursed under

HRAs, HSAs, FSAs beginning 1/1/2011. Increased penalty to 20% for non-qualified medical expenses from

HSAs/Archer MSAs, Begins 1/1/2011.

Implementation Timeline (cont’d)

2012 Employer 1099 reporting for payments >$600 to corporate providers

of property and services. Applies after 12/31/2011.

2013 Medicare Contribution Tax (3.8%) now applied on unearned income

(over $200K/$250K) Begins 1/1/2013. Increase in Medicare Hospital Insurance Tax for $200k/$250K

taxpayers. Employee pays entire .9% increase in tax. Begins 1/1/2013.

All employers must provide employees written notice about exchanges, how to contact exchange, etc. Begins 3/1/2013.

Implementation Timeline (cont’d)

2014 Exchanges open in each state for individual and small group

markets. Individual mandate begins Employer responsibilities begin 90 day waiting period allowed Automatic enrollment for employers with 200+ employees Grandfathered plans – further insurance reforms apply

2017 Large employer participation in exchanges allowed; requires state-

by-state action.

What Does The Law Require?

What ALL Restaurateurs Need to Know

Grandfathered Plans: Plan that existed as of 3/23/2010, not subject to some of the changes in the law.

Exchanges: Marketplace for individual and small group plans, to be set up by each State.

Notification Requirements: All employers must provide written notice at the time of hiring about the exchange (3/1/2013)

Disclose the value of health benefits on W-2 form (2011) 1099 Reporting: Issue for any amount greater than

$600 to corporate providers of property and services (2012)

How Does the Law Apply To Me?

1. Are you a single employer? How many restaurants? What is their ownership structure?

2. How many employees do you have? (monthly calculation)Full-time (>30 per week in a month) __________Part-time workers total hours in a month __________Seasonal workers

part-time __________full-time __________

3. Calculate your number of full-time equivalent employees (50 full-time equivalent employee threshold).If below…exempt from coverage requirements or penaltiesIf above…provide coverage or pay penalties on full-time workers.

4. Are you eligible for the small business tax credit?5. Comply with large employer requirements, if applicable.6. Comply with the requirements applicable to all employers.

1. Are you a single employer?

Defined by “Common Control Clause” of the tax code – consult a tax advisor.

Ownership requirement: In order for 2 or more restaurant organizations to be considered a single employer under Common Control, each restaurant organization must be 80% owned by the same 5 or fewer owners.

2. How many employees do you have?

Full-time Employee: “With respect to any given month, an employee who is employed on average at least 30 hours of service per week.”

Part-time Employee: Employers not required to provide health coverage nor pay any penalties on part-time workers. However, for determining if you are above or below the small business threshold, must consider part-time employees.

Seasonal Workers: ≤120 days. Not counted for purposes of the small business threshold. May be counted towards penalties based on their full-time status.

# Full-time Employees

(30 hours/wk)

Total hours worked by part-time

employees /120 hours

# Full-time equivalentsused solely for

determining threshold+ =

•If an employer has fewer than 50 full-time equivalents…•Employer is exempt from providing coverage•Employer is exempt from penalties

3. Calculate the number of full-time equivalents.

4. Are you eligible for the small business tax credit?Small Business Tax Credit: Available 1/1/2010 (after 2014,

for 2 years) for those who provide coverage.

Full credit to employers who:

1. Have 10 or fewer “full-time equivalent employees”;

2. With average annual wages less than $25,000; and

3. Contribute at least 50% of the premium.• Phase out up to 25 full-time equivalents and $50,000• www.IRS.gov for more information; postcards mailed out

5. Comply with large employer requirements, if applicable.

Starting in 2014, “large” employers must offer affordable “minimum essential coverage” to their full-time employees.

Minimum Essential Coverage: 1. Sec. of HHS to define essential health benefits2. Prohibits out-of-pocket limits greater than the HSA

(2010: $5,950 self, $11,900 family).3. Provide either Bronze (60% actuarial value), Silver

(70%), Gold (80%), Platinum (90%) level of coverage.4. Catastrophic plan is not minimum essential coverage.

Possible Outcomes For Large Employers

Does not offer coverage: $2000 annual penalty per full-time employee.

Does offer coverage: $3000 per full-time employee access insurance on exchange with tax credit.

Does offer coverage: free choice voucher (8-9.5% of employees’ household income).

Allowed to exclude the first 30 full-time employees when calculating $2000 annual penalty amount or maximum limit on $3000 penalty.

What “Large” Businesses Need to Know

Certification to IRS that offer minimum essential coverage, provide to employee as well (Begins 2014).

Waiting Period: Large employers allowed up to 90 days waiting period before enrolling new full-time employees in health plan (Begins 2014).

Automatic Enrollment: Employers with 200+ full-time employees must automatically enroll new full-time employees in an employer-sponsored plan.

Other Provisions to Know

Reasonable Break Time for Nursing Mothers: Amends FLSA, effective 3/23/2010.

Employer-Offered Wellness Programs: Able to continue to offer and are encouraged enhance these programs.

Nutritional Disclosure: Applies to restaurants with 20 or more locations nationwide; provide calorie counts on menus and menu boards and additional nutritional data upon request. More information available at www.restaurant.org/foodandhealthyliving

Other Provisions To Know

New and Expanded Medicare Taxes: Applies to taxpayers earning $200,000/$250,000 (2013).

Over-the-counter medicines are no longer considered medical expense for Health Savings Accounts, etc. (2011)

Limitation on FSAs to $2,500 (2011) Individual Mandate: Requires individuals to obtain

“minimum essential coverage” for themselves and dependents (2014)

Cost Factors: Other Ways This Affects You

Increased cost to insurers / health plans administrators Additional restaurant staff time to administer new

requirements: 1099 reporting Employee communications (required and needed to

help them understand health care reform) High cost excise tax reporting to insurers /

administrators Payroll changes Increased cost to suppliers

Restaurant Employee Workforce Issues

Expectation by employee to provide coverage Available of state insurance exchange options in 2014 Seasonal workforce Demographics create unique challenges Managing employee growth against loss of employer

tax credits (25 FTEs) or possibility of penalties (50 FTEs)

Recruitment and Retention in the Restaurant Industry

Greater mobility due to presence of exchanges How will health plan offerings be viewed as a factor in

accepting an offer for employment Greater focus on wages

Additional Restaurant Administration

Required employee communications Coordination with state exchanges Payroll changes Excise tax reporting requirements Validation of penalty payments from federal government Outcomes research fees Flexible spending account changes (amount and eligible

expenses) Auto-enrollment (200 employees) W2 reporting Corporate information reporting (1099s)

Going Forward

Important to understand the legislation and prepare for changes now, understanding 1, 2 and 3 year priorities

The process did not end when the President signed the health care reform legislation into law -- guidance will continue to be provided with regard to how the law is interpreted (regulatory process)

The NRA & GRA will continue to provide support to member organizations as the process continues

Next Steps:

- Prioritize activities based on the little concrete information you have now with a focus on 2011 and 2012

- Keep these changes in mind as you plan and work with payroll companies, computer support systems and set up business plans

- Stay tuned into/logged onto www.garestaurants.org for updates and stay connected with peers in the industry in GA

What’s Being Done for You:

- NRA & GRA continuing advocacy through regulatory process at state and national level

- NRA partnering with nations largest Health Services Company, United Healthcare

- Developing products for individuals, small groups, large groups, specialty lines, TPA services

For more information, visit www.restauranthealthcare.orgwww.garestaurants.org

Panel Discussion

Moderator: Patrick Cuccaro, Affairs to Remember Caterers

Kat Cole, Hooters of America, Inc. Debi Elkins, AFC Enterprises Michael Rummel, Tappan Street Restaurant Group Kelvin Slater, Blue Moon Pizza

Patrick Cuccaro, General Manager, Affairs to Remember Caterers

Secretary, Georgia Restaurant Association Executive Committee

Chair, Catering Roundtable

Closing & Announcements

Upcoming Workshop: Menu Labeling

When: June 29, 2010 from 2-4pm

Where: Taco Mac Prado

Speakers: -Charles Hoff, Law Office of Charles Y. Hoff-Amanda Rieter, NRA State Strategy & Policy-Lucy Needham, CEO FoodCALC®

Free to GRA Restaurant Members, RSVP to Kaitlin Follrath at [email protected] or 404.467.9000.

On the Menu: Restaurateur to Restaurateur Best Practices Forum

Tuesday, June 15th, 2-4:30 pm Rosebud with Chef Ron Eyester

The New Era of the Neighborhood Restaurant and the Many Roles of the Chef

Tuesday, October 19th, 2-4:30 pm Pacci Ristorante with Executive

Chef Keira Moritz

Chocolate for Cystic Fibrosis Foundation

June 17th, 6-10 pm – www.chocolateforcf.com Great American Dine Out

September 19-25, www.GreatAmericanDineOut.org

Restaurant Neighbor Awards

Deadline: June 11th $5,000 Prize www.restaurant.org

Community Involvement

Wings & Waffles: Cobb Co. Hospitality Day When: Wednesday, June 16th, 6:00-7:30pm Where: Hooters – Cumberland Pkwy: 2977 Cumberland Parkway SE, Atlanta,

GA 30339 Suggested Contribution: $50.00

A fundraiser benefiting the Georgia Restaurant Association Political Action Committee

Hosted by Kat Cole, Hooters of America, Inc. and Charlie Crowder, Royal Waffle King. Recognizing the contributions of our elected officials and leaders in the Cobb County Foodservice Hospitality Industry.

Atlanta-Fulton County Hospitality Day When: Monday, June 21st, 6:00-7:30pm Where: Max Lager’s Wood-Fired Grill & Brewery: 320 Peachtree Street,

Atlanta, GA 30308 Suggested Contribution: $25 GRA Members, $35 Non GRA Members

A fundraiser benefiting the Georgia Restaurant Association Political Action Committee

Hosted by Alan & Cindy LeBlanc of Max Lager’s Wood-Fired Grill & Brewery. Recognizing the contributions of our elected officials and leaders in the Atlanta-Fulton County Foodservice Hospitality Industry.

Political Advocacy

Join Us for a Chef’s Tasting & Networking Reception Compliments of Chef Keira Moritz and Pacci Ristorante at the Palomar Hotel Midtown Atlanta

Networking Reception

Thank You For Attending the Georgia Restaurant Association

Healthcare Special Session:

What You Need To KnowJune 7, 2010