2014 & Beyond – Are You PPACA Ready?August 2015

Health Care Reform Update

Pamela Legge, RHU, CIIP, DAE, LPRT, CHRS

Sr. Vice President

BB&T John Burnham Insurance

San Diego, CA 92101

Challenges for PPACA – Practical, Policy, and Political

• Continued technological challenges and security concerns on Healthcare.gov website as well as CoveredCA.com

• Insurance carriers cancelled millions of health plans that are not ACA-compliant

• Significant premium increases and out-of-pocket expenses for some people in some states

• Provider networks shrinking

• Public backlash and approval declining too, even from some supporters of the Obama administration

• Who wins and who loses?

New World in 2014

Changes That Will Affect Premiums

• Guaranteed Issue – no one can be denied insurance coverage

• Broader Benefits – 10 types of Essential Health Benefits, out-of-pocket maximums, and deductible restrictions

• Changes in Rating – age, location, tobacco (not applicable in CA)

– Not gender, health in the small group market

• Actuarial Value – 60% of covered services

• New taxes and fees

• Subsidies/credits – assist lower income individuals in paying for coverage (100% to 400% FPL)

• Reinsurance Program – funded by employers to offset high cost claims in the individual marketplace

• New Marketplaces – offer new metal plans

Individual Mandate

If NO, then If YES, then

Are you:• Part of a religious group with an exception• Incarcerated• An undocumented resident• American Indian• Paying more than 8% of take-home pay for employer coverage• So low-income you don’t pay federal income taxes• Someone who falls into a Medicaid expansion coverage hole• Some other hardship exemption

Do you have:• Coverage through a job• Coverage through an

Exchange/at least bronze individual coverage

• Medicaid, Medicare, CHIP• Tricare or VA Care• Student health plan• Grandfathered plan

Penalty2014 – Greater of 1% family income or $95

adult/$285 family maximum2015 – Greater of 2% family income or $325

adult/$975 family maximum2016 – Greater of 2.5% family income or $695

adult/$2,085 family

No Penalty

Or

Subsidies

Provide assistance to low-income individuals:

• 100-400% of federal poverty level

• Not eligible for government programs that provide coverage

To help pay premiums or reduce cost-sharing

Not available to individuals who are either:

• Eligible for affordable, minimum-value employer coverage

• Enrolled in an employer plan

Subsidy Settle Ups…2015

• It’s Important to Know – paybacks or clawbacks are possible if the annual actual income ends up being higher than the estimated income on the marketplace application. These are also called true-ups or reconciliations.

• Think about mid-year life change events – getting married, changing jobs, picking up a shift.

• How to fix? Update the exchange right away.

• If unreported, adjustments will be taken by the IRS from tax payer’s refund check or, if underestimation occurs, check would be sent to the tax filer.

Five Key Employer Questions

SHOP Options for Small Business

• Small Business Health Option Program (SHOP) – Exchange for small employers

• Small employers can offer employees enrollment in a QHP through a SHOP

– Can offer benefits through a cafeteria (Section 125) plan

– Exchange sets contribution methods

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

Small Business HealthcareTax Credit

• Available for group with fewer than 25 Full Time equivalent employees

• Average salary must be less than $50k

• Only available if insured through SHOP

• Employer pays at least 50% of the employee’s premium costs

• Tax Credit is worth up to 50% of the employer contribution toward the employee’s premium cost (up to 35% for tax exempt employers)

Taxes and fees overview

Information Portals

• HHS created an Information Portal

• www.HealthCare.gov

• www.HealthCare.ca.gov

• www.DOL.gov

• www.kff.org

• www.IRS.gov

Thank You!

For additional information please contact:

Pamela Legge, RHU, CIIP, DAE, LPRT, CHRS

Sr. Vice President, Employee Benefits

BB&T – John Burnham Insurance

San Diego, CA 92101

(619) 525-2675 – Direct

(888) 328-1316 – Fax

PLegge@BBandT.com