Healthcare Reform

A look into the Affordable Care Act (ACA) and what it means to you.

Presented by

Bill Scuorzo

President & CEO

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• The 2,407 page Patient Protection and Affordable Care Act (H.R. 3590), also known as the Senate bill, was signed March 23, 2010. It was amended by the 153 page Health Care and Education Affordability Reconciliation Act of 2010 (H.R. 4872), commonly known as the Reconciliation Bill, signed March 30, 2010. 

• The law builds upon our current employer based health insurance model that covers 83% of Americans today and hopes to add coverage for 30 million uninsured individuals. This will be accomplished by providing financial assistance through subsidies or tax credits for low income individuals and small businesses, and by expanding Medicaid. The Congressional Budget Office, the CBO, said that as a result 94% of Americans will have access to health care.

ACA Overview

Major provisions affecting employers who offer group health benefits• Dependents covered to

age 26

• Medical Loss Ratio

• Waiting Period Maximum

• Minimum Essential Coverage

• Elimination of Pre-Existing Conditions

• Preventive Care Coverage

• Coverage for Pre-Existing Conditions

• Fees & Taxes on Group Plans

• Exchanges

• Small Business Tax Credits

• Employer Mandate

Dependents covered to age 26

The DU26 provision became effective with the first benefit period after 9-23-2010 which is six months after the enactment date of the law signed 3-23-2010.

Minimum Loss Ratio

A MLR of 85% applies to large group plans and 80% for individual and small group plans (100 and below). 

Maximum Waiting Period

Effective 1-1-2014, waiting periods in excess of 90 days are prohibited for all size group health plans.

Minimum Essential Coverage

The tem “essential benefits package” means, with respect an health plan, coverage that:

• Provides for “essential health benefits”

• Limits cost sharing for such coverage; and

• Provides either bronze, silver, gold or platinum level of coverage (i.e., benefits that are actuarially equivalent to Bronze 60%, Silver 70%, Gold 80% or Platinum 90% (respectively) of the full actuarial benefits provided under the plan.

• Effective January 1, 2014, all in-network out-of-pocket amounts (deductible, copayments, and coinsurance) will accumulate to the annual Out-of-Pocket maximum.

• Annual Maximums on Deductibles

Elimination of Pre-Existing Conditions

Your insurance company can't turn you down or charge you more because of your pre-existing health or medical condition like asthma, back pain, diabetes, or cancer. Once you have insurance, they can't refuse to cover treatment for your pre-existing condition.

Preventive Care Coverage• Preventive care coverage at no out-of-pocket cost on most health plans. These preventive services help to put the focus on wellness, early detection and prevention

instead of treatments and cures.

Fees & taxes on group plans

Health Insurance Provider Fee

Transitional Reinsurance Fee

Exchanges

An online marketplace where employers and individuals can shop for insurance

Public Exchanges

Individual and Group (SHOP)

Shop is the Small Business Marketplace

Private Exchanges

Created by private industry such as insurance carriers & Brokers

Small Business Tax CreditsCan you claim the credit?• Must purchase insurance through SHOP

• Employer must pay at least 50 percent of the cost of single (not family) health care coverage for each of your employees.

• Less than 25 full-time equivalent employees (FTEs).

• Average wages of less than $50,000 (as adjusted for inflation beginning in 2014) per year.

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 (as adjusted for inflation beginning in 2014), the amount of the credit you receive will be less

Employer Mandate

• The employer mandate is based on full-time equivalent employees, not just full-time employees.

• The fee is based on whether or not you offer affordable health insurance to your employees that provides minimum value (explained below).

• The annual fee is $2,000 per employee if insurance isn't offered (the first 30 full-time employees are exempt).

• If at least one full-time employee receives a premium tax credit because coverage is either unaffordable or does not cover 60 percent of total costs, the employer must pay the lesser of $3,000 for each of those employees receiving a credit or $750 for each of their full-time employees total.

• The fee is a per month fee due annually on employer federal tax returns starting in 2015 for small businesses with 100 or more full-time equivalent employees(2016 for those with 50-99). So the per month fee is 1/12 of the $2,000 or $3,000 per employee.

• Unlike employer contributions to employee premiums, the Employer Shared Responsibility Payment is not tax deductible

The employer mandate fee (officially called an Employer Shared Responsibility Payment) is a per employee fee for employers with over 50 full-time equivalent employees who don't offer health coverage to full-time employees.

What responsibilities do employers have that offer group offer coverage

• Provide a Summary of Benefits & Uniform Glossary

• W2 Reporting for employers who issued more than 250 W2’s in the previous calendar year.

• Provide Exchange Notices to Employees

Closing• Bill Scuorzo

• President & CEO

• BCG Advisors

• Office (888) 685-9229 ext. 111

• Cell (973) 464 – 7461

• BScuorzo@BCGAdvisors.com