Upload
eric-stern
View
1.045
Download
0
Tags:
Embed Size (px)
DESCRIPTION
ACA, SHOP, and Small Business Tax Credits
Citation preview
The Affordable Care ActInformation on SHOP, and
The Individual Marketplace
Presentation By:
What is the ACA?
• The Affordable Care Act (ACA) was enacted in March
2010.
– Biggest overhaul of the United States’ health care system
since Medicare and Medicaid in 1965
– Requires most individuals to obtain health care coverage
– Requires insurance companies and employers to provide
consumer protections related to health coverage, like covering
pre-existing conditions and not charging more for coverage
based on gender
– Employers of size groups now must offer coverage as well
What Are The Major Changes?
• Across-the-board changes to health insurance include:– Eliminating annual and lifetime limits on essential health benefits
– Prohibiting insurance companies from canceling coverage
– Elimination of Pre-Existing Condition Limitation
– Providing free preventive care
– Requiring insurance companies to spend no more than 20 percent of premiums on administrative, overhead and marketing costs and requiring companies that exceed that number to issue refunds to their customers
– Waiting periods can no longer exceed 90 days
– Most costs now accumulate towards out-of-pocket maximums including copays (limits on deductibles and oop’s)
– The individual mandate
– Creation of Exchanges for both Individual Marketplace and SHOP for small employers
Health Benefits Exchange
Public health insurance exchange required by ACA
Primarily online marketplace for purchasing health insurance (Qualified Health Plans)
Run by state or federal government with consumer assistance from other entities
For individuals and small employers (generally up to 50 employees)
Who Is Eligible For The Exchange?
Individuals
• Citizen or legal resident
• Not incarcerated
• Reside in state covered by Exchange
Small Employers (SHOP Exchanges)
• Qualify as a small employer based on size
• Offer QHP coverage to at least all FT employees
• Use SHOP in primary office location or employee’s primary worksite location
Most individuals can shop for Exchange coverage
(even if eligible for employer coverage)
Individual Exchange Subsidy
Provide assistance to low-income individuals:
• 100%-400% of federal poverty level ($11,490-$45,960 individual or $23,550-$94,200 for family of four)
• Not eligible for government programs that provide coverage
To help pay premiums or reduce cost-sharing
Not available to individuals who are:
• Eligible for affordable, minimum-value employer coverage or
• Enrolled in an employer plan
• Making less then $11,490 (Medicaid Eligible)
Shop Exchange
• Small Business Health Option Program (SHOP) – Exchange
for small employers
Employers with over 50 FT employees not required
to offer health insurance until 2016
2014-15
• States can limit size to up to 50 employees
2016
• States must increase size to up to 100 employees
2017
• States can let any size employer participate
How To Count Full Time Employees?
• Full Time = 30 hours/week or 130 hours/month
• Part Time Counts in proportion to hours worked, so two employees working 15 hours/week would count as 1 FT employee
• Counts are used to determine large employer vs small and tax credit eligibility but you do not have to offer insurance to the part-time employees
• Seasonal workers have their own sets of rules (employers will need to use 6 month at minimum look back)
• Other calculation is total hours of service for all employees (no more then 2,080 for any 1 employee) divided by 2,080 = total employees
Employer Responsibility
• No requirement to offer coverage
• Can get tax credits for providing coverage
Small Employers (fewer than 50
FT/FTE employees)
• Must offer coverage to FT employees and dependents to avoid penalties
• Coverage must be affordable and provide minimum value
• Penalties delayed until 2015
Large Employers (50+
FT/FTE employees)
Employer penalties triggered if any full-time employee receives
subsidized coverage in an Exchange
Large Employer Plan Responsibility
Is affordable
• Employee’s contribution for self-only coverage does not exceed 9.5% of income
• Safe harbors for what income and premium amount to use
Provides minimum
value
• Plan covers at least 60% of costs on average
• MV calculator or design-based checklists
Small Employer Requirements For Tax Credit
• Fewer the 25 FT Equivalent Employees
– Owners/partners, seasonal workers less then 120 days in calendar year can be excluded
– Hours include PTO
• Average gross wages for employees needs to be less then $50,000 per FTE
• Have to offer qualified plan through the SHOP which covers all essential health benefits
• Employer must pay for at least 50% of the employee only premium of the health insurance
Tax Credit Opportunity
• Credit is on a sliding scale based on wages and number of employees
• Maximum amount is 50% of your employer contribution
For Example:
If you have 9 employees and your employer contribution of the total premium is $50,000 annually, you may be eligible to get $25,000 back.
The smaller the business the bigger the credit. So if you have more than 10 FTEs or if the average wage is more than $25,000 (as adjusted for inflation beginning in 2014), the amount of the credit you receive will be less.
How To Apply
1. Talk with a licensed agent or broker about your company to determine your options and eligibility
2. Purchase a qualified health plan from the SHOP through a broker or agent
3. Fill out the SHOP Application
4. File Form 8941. http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers