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The Affordable Care Act
And Your Business
Mitchell Stein, Policy Director Consumers for Affordable Health Care
“Advocating the right to health care for every man, woman, and child”
1-800-838-0388 www.mainecahc.org
Kennebec Valley Chamber of Commerce
Wednesday, February 20, 2013
Agenda
www.mainecahc.org 2
• Introduction to Consumers for Affordable
Health Care
• The Affordable Care Act: The Basics
• Implementing the ACA: What Your Business
Needs to Know
www.mainecahc.org 3
Introduction to Consumers for
Affordable Health Care
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MISSION STATEMENT
Consumers for Affordable Health Care is a Maine advocacy organization that
strives to ensure a strong consumer voice in decision making at all levels and
in all forums in order to advocate for a consumer-oriented health system in
Maine and the United States. Since 1988, Consumers for Affordable Health
Care has provided leadership and support to consumers, businesses,
organizations, and policymakers to specifically advocate for:
Access to health care for all Maine residents including preventive,
acute, chronic and long-term care that is assured through health care
coverage
Affordable health care coverage that is guaranteed for all Maine
residents, taking into account an individual’s ability to pay
An individual's right to freely choose her or his provider and method
of care within the confines of quality care that is based on objective
standards and supported by publicly available data on individual
providers and hospitals
Financing coverage from a broad variety of government and private
sources
Controlling rising costs while preserving quality care
Consumers for Affordable Health Care provides resources to educate
consumers and assist them in navigating the existing system.
Consumers for Affordable Health Care works with other organizations to
educate them and to advocate our mission before legislative and regulatory
bodies.
PO Box 2490
Augusta, ME 04338-2490
www.mainecahc.org
Helpline
1-800-965-7476
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About Consumers for Affordable
Health Care (CAHC)
Non-profit, non-partisan mission driven
advocacy organization since 1988
Consumer Assistance Program
Policy Research and Advocacy
Mission: To advocate the right to quality,
affordable health care for every man,
woman, and child in Maine.
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Consumer Assistance Program
HelpLine 1-800-965-7476 Our statewide, toll-free Consumer HelpLine assists people who
need insurance or have been denied care
Provides help finding programs to help with health care and drug costs
Help with Coverage Disputes
Understanding your coverage and rights
Help with denials, appeals or complaints
On-line health care guide
Workshops and presentations
Train service professionals on MaineCare eligibility, private
insurance and non-insurance programs that can help people
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Policy Advocacy
Monitor Statehouse and Washington activities
Speak on behalf of consumers at state level
Represent consumers in rate review hearings
(and help consumers to represent themselves)
Info we get thru our Helpline and Outreach
informs our policy and advocacy work; we often
are able to spot harmful trends
Founding member of the Health Care for Maine
Alliance (HC4ME)
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The Affordable Care Act:
The Basics
The ACA – Law of the Land
Supreme Court ruled:
Individual Mandate is a constitutional exercise of
Congress’ power to tax
Medicaid expansion violates Congress’ spending clause
power as unconstitutionally coercive of states Results in Medicaid Expansion being an option for each state instead of
mandatory for all states
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What does the ACA do?
Universal access to health coverage
32 million uninsured Americans (est. by 2019)
Expansions to public programs
New Options for Individuals and Small Businesses
Insurance Reform at the Federal Level
Patients’ Bill of Rights
Holding Insurance Companies Accountable
Workforce Expansion and Quality Improvement
Provisions
10
11
What’s happened so far Young adult dependent coverage until age 26
No pre-existing condition exclusions for children
Interim coverage available for adults with pre-existing conditions
New consumer protections (e.g. appeal rights, etc.)
Medicare prescription drug coverage donut hole being plugged in phases
Small employer tax credits
No cost preventive services
End to recisions
Ban on lifetime limits
Phasing out of annual limit
Standardized disclosure forms (SBC)
And more…
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And coming in 2014 Minimum Credible Coverage Requirement: Mandate for Individuals
Mandate for large employers (50 or more employees)
Expanded Medicaid eligibility - incomes up to 133% FPL (dependent on State participation)
Health Insurance Marketplaces (Exchanges) Individual subsidies toward Premiums and Cost Sharing
Additional Small Employer Tax Credits (through the Marketplace)
Limits on Out-of-pocket spending
One-stop shopping: consumer-friendly
Navigators/Assisters
Plan reforms Essential Health Benefits (both Marketplace and non-Marketplace plans)
Rate Review
Risk Adjustment Programs
No more pre-existing condition exclusions for adults
And more…
Marketplaces (Exchanges)
Supreme Court decision left Exchanges untouched
An Exchange is a marketplace that provides a way to
compare and review choices in a consumer-friendly
format (now called marketplace)
Marketplaces will offer a variety of plans for individuals
and small businesses
Enrollment begins October 1, 2013!
Coverage will begin for all new enrollees on January 1,
2014
Enrollment annually or at “qualifying event”
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Marketplaces (cont.) Maine will have a Federally-facilitated
Marketplace
Two Marketplaces
Individual Marketplace
Small Business Health Options Program
(SHOP )
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Marketplaces (cont.) Individual subsidies will only be available through the
Marketplace. Who can get a subsidy?
If NO access to employer coverage:
Household income between 100 and 400% FPL
If YES access to employer coverage:
At or below 133% FPL and employer plan coverage less
than 60% of average expenses
At or below 400% FPL and employer plan costs more than
9.5% of income
Subsidy for individual coverage offered through Marketplace
Sample 2013 FPLs:
100% Single - $11,490, Family of 4 - $23,550
400% Single - $45,960, Family of 4 - $94,200
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Marketplaces (cont.) Who can help? Navigators
Specific responsibilities outlined in law, including facilitating
enrollment in qualified health plans
Must be at least two, one of which must be a nonprofit
May target specific groups “most likely” to be in Marketplace
Assistors (may not be available in all states)
More flexibility in duties
Not limited to type
Can be used to reach any groups
Brokers
Awaiting further Federal regulations as well as clarification of state
regulation of Navigators
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Essential Health Benefits (EHB) EHB is the minimum benefits all (insured) plans must cover (inside OR
outside the Marketplace)
Each state had the ability to define their own EHB (at least for 2014 and
2015) from one of 10 possible benchmark plans
10 Mandatory Categories of Coverage: Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services and devices
Laboratory services
Preventive and wellness services and chronic disease management, and
Pediatric services, including oral and vision care
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Implementing the ACA:
What Your Business
Needs to Know
Employer Specifics
I do want to caution that I’m not a broker, not an accountant
and not a lawyer – I’m a policy guy who can talk at a high
level about what’s coming. I will provide background
information but I am not able to suggest to you your best
option. I would strongly encourage you to talk to others
(broker, accountant and/or attorney) before making any
decisions.
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Employer Specifics Tax Credits
Two programs:
Currently available and available through the Marketplace in 2014
For tax years 2010 through 2013, the maximum credit is 35 percent for small
business employers and 25 percent for small tax-exempt employers such as charities
On Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively
(available only if you purchase coverage through the Marketplace)
If you are a small business employer who did not owe tax during the year, you can
carry the credit back or forward to other tax years. Also, since the amount of the
health insurance premium payments are more than the total credit, eligible small
businesses can still claim a business expense deduction for the premiums in excess
of the credit
For tax-exempt employers note that the credit is refundable, so even if you have no
taxable income, you may be eligible to receive the credit as a refund so long as it
does not exceed your income tax withholding and Medicare tax liability.
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Employer Specifics Tax Credits (cont.)
Can you claim the credit?
To be eligible, you must cover at least 50 percent of the cost of single (not family)
health care coverage for each of your employees. You must also have fewer than 25
full-time equivalent employees (FTEs). Those employees must have average wages
of less than $50,000 a year
What is a full-time equivalent employee?
Calculate the number of full-time equivalents by dividing the total annual hours of
part-time employees by 2080
What are average wages? If you pay total wages of $200,000 and have 10 FTEs.
To figure average wages you divide $200,000 by 10 – the number of FTEs – and
the result is your average wage. The average wage would be $20,000
The amount of the credit you receive works on a sliding scale. The smaller the
business or charity, the bigger the credit. So if you have more than 10 FTEs or if the
average wage is more than $25,000, the amount of the credit you receive will be less
http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers
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Employer Specifics Employer Responsibility
Employer responsibility for offering coverage to full-time
employees if have 50+ full time equivalent employees
Full-time is defined as 30+hours a week
Equivalents are determined based on total number of
hours by part-time employees each month and dividing
by 120
Paid hours include paid vacation days, sick days, etc.
Employers use 2013 data to determine 2014
responsibility
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Employer Specifics Employer Responsibility (cont.)
Transitional relief – may use any consecutive 6 month
period in 2013 to determine 50+ status
Seasonal employees don’t count
Guidance does not define seasonal – for at least 2014
employers may use any reasonable good-faith interpretation of
that term (this represents a positive change in Maine where the
proposed definition of 120 days did not cover our tourist
“season”)
Can use proposed rules to make decisions, won’t be
penalized in 2014 if final rules are different
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Employer Specifics Employer Responsibility (cont.)
If have 50+ full time equivalents, penalty if:
Does not offer coverage to full-time employees
Coverage offered is not sufficient: Less than 60% actuarial value
Coverage is unaffordable: EE responsibility 9.5% income or
more for individual coverage
Companies with common owners or are otherwise
related must be combined for determining 50+ full time
equivalents
If state elects to participate in Medicaid (MaineCare)
Expansion and employee enrolls there is no penalty
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Employer Specifics Additional Items
Medical Loss Ratio (MLR) Rebates
First ones mailed in July 2012, distribution depends
on who pay the premium (employer or employee)
Summary of Benefits and Coverage (SBC)
For insured plans should be created by insurer and
given to ER to distribute
Applies to all individual and group plans (no exception
for grandfathered plans)
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Employer Specifics Additional Items (cont.)
New hire waiting period cannot exceed 90 days (all
plans, grandfathered or not)
W2 disclosure of benefit costs beginning January 2013
(for 2012 year)
If issued less than 250 W2s in January 2012, exempt
in 2013
Note this is NOT taxable income. For informational
purposes only
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Employer Specifics Additional Items (cont.)
Flexible Spending Account (FSA) limit of $2,500
including Health and Dependent Care FSAs. HRA and
HSA not impacted by new limit (begins in 2013)
Medicare Tax Increase for income over $200,000 for
individuals and $250,000 for joint filers
Patient Centered Outcomes Research Institute Fee (First
annual fee payable by July 2013 )
First year, $1 per covered life, second year $2 per
covered life, thereafter the $2 is indexed for Medical
Inflation
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Employer Specifics Additional Items (cont.)
Notice of Marketplace Options (originally scheduled for
March 2013 but delayed until late summer early fall to
correspond with publicity around Marketplace enrollment
period)
Simple Cafeteria Plans (2014 plan year)
Congress amended the Internal Revenue Code to
allow eligible employers' cafeteria plans to qualify as
simple cafeteria plans. Simple cafeteria plans are
treated as meeting certain nondiscrimination
requirements and benefits for cafeteria plans making
the process simpler.
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Employer Specifics To offer or not to offer, that is the question
A few things to consider when deciding whether or not to offer health coverage:
Employer’s cost The coverage offered is tax deductible to the employer
The penalty paid is not tax deductible to the employer
Potential need to increase salary to compensate for the reduction in total compensation
Employee’s cost The cost of individual coverage is NOT tax deductible to the employee (as opposed to their contribution to
employer coverage which is tax deductible)
Coverage might be more expensive than their employer coverage is now, especially if they are not eligible
for subsidies
What is the competition doing Impact of decision in attracting and retaining employees
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For More Information: Consumers for Affordable Health Care:
http://www.mainecahc.org/ACA/updates.htm
HealthCare.Gov: http://www.healthcare.gov/
Department of Labor FAQs: http://www.dol.gov/ebsa/faqs/
IRS: http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions
Kaiser Family Foundation: http://healthreform.kff.org/
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Questions?
Consumers for Affordable Health Care Ph: 1-800-838-0388
HelpLine: 1-800-965-7476 Web: http://www.mainecahc.org
“Like” us on Facebook Read our blog: http://mecahc.blogspot.com/
Follow us on Twitter: @MAINECAHC
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Thank You!