Hcr 2012 (3)

Health Care Reform 2.5

SDAHUNeil CrosbyDirector of Sales – Warner PacificVP of Public Affairs – CAHUChair of Media Relations - NAHU

How It Affects Employers & Agents

Drivers of Reform

Health Care cost increases

Therefore Health ‘Insurance’ costs increase

Un Insured

Initial Goals Of Reform Lower the Costs in Health Care Assure the Quality of Health Care Affordable coverage for all Americans Choice of Doctors & Plans

The Health Care Reform Law

Details are hard to come by… Mostly general provisions Basic timelines Subject to change

Employers Across America Want to Know… What are the effects on me as an Employer? What are the effects on my Employees? How much is this going to cost me? What do I have to do?

The ‘Positives’ of the Law Small Business Tax Credit Overage Child Coverage Guarantee Issue No Lifetime maximum on benefits Preventive care covered at 100%

FSA & HSA changes…

Insured's can no longer run ‘Over The Counter’ drugs through their FSA pre-tax.

HSA withdrawals for non-qualified medical expenses are now subject to a 20% penalty, which is a 100% increase.

New 1099 provision Applies to all Businesses Must 1099 everyone they pay $600 or more to in

a year Include their Tax ID or SS#

Generating Tax Revenue…

New Reporting

Include the cost of Employer paid Benefits in the Employee’s W-2

Employers of 50+ Employees, new extensive Reports

Summary Benefit Comparisons (SBC’s) Carriers will generate SBC’s

Who provides to the Employer: New Business – Agent / General Agent Renewal – Carrier

Employers need to send to Cobra Beneficiaries

Carriers will send to CalCobra Beneficiaries

SBC’s included in renewal packets – Vary by Carrier

Community Living Assistance Services & Supports Act

A Government run Long Term Care program All Employees in America must pay into this

program, unless they opt out. Estimated premium: $120-$240 per month 5 Year Deductible before Claims Maximum Daily Benefit: $75 per day

The C.L.A.S.S. Act

More Tax Revenue… In 2013, ‘Medical’ expense contributions to FSA’s

to Pre-Tax will be capped at $2,500. An increase in MediCare Tax of .9%. New 3.8% MediCare Tax (Could be triggered by

selling a home) Applies to $200,000 Single, or $250,000 jointly.

Provider ComplianceCurrently 14,000 Codes

In 2014

180,000 Codes

Employer ComplianceAll Provisions: 1-1-2014

Renewal Date: Doesn’t matter

Plan Year: Doesn’t matter

Rate changes… In 2014

Tobacco ‘rate ups’: 50% more?

Premium Ratio: 3/1 Maximum

More 2014 Changes… Small Employers = 1-100 Employees eventually Guaranteed Issue Waiting Periods: Max 90 Days Subsidies begin

Employer Mandate In 2014, Employers with 50 or more Employees

will not be mandated to provide coverage, but…..

Potential Penalty: $2,000 for each Employee

Affordable Plan Requirement Affects Employers who do not pay 100% for EE’s Reviewed: Employee’s portion of premium Trigger: If Employee’s portion of premium

exceeds 9.5% of ‘household income’ Result: Employer is labeled as providing

‘unaffordable coverage’ Penalty: $3,000 to Employer, for each Employee Study: 1/3 of the Employers in America

Exchanges In 2014, Exchanges begin in every state.

To create Competition

Some States may well need it, some not so much…

California’s Past Exchanges HIPC – Health Insurance Plan of California (1993)

Exchange PacAdvantage – Not For Profit Co-Op (Closed

2006) Lessons learned?

Exchange Provisions California, as an example… Individual – Agent involvement SHOP – Small Employer Health Options Plan Agent involvement Past knowledge applied?

Employer ‘notices’ to their Employees Employers must give the option to opt out of

their plan for the Exchange plan Employers must pay for the Exchange plan Employees may keep the change…

Employer Vouchers

Summary of the Law

Positive Provisions It was supposed to lower health insurance costs,

is it? Fairly heavy burden on Employers

Will The Law Change? SCOTUS decision affects…

Fact: The Law was passed by only 1 Party

November Election: Will have a huge effect

Questions ?

Neil Crosby

Director of Sales – Warner Pacific

Vice President of Public Affairs – CAHU

Chair of Media Relations - NAHU

[email protected]

800-801-2300