What Is Happening with Health Insurance In 2014?

Do I Have Choices?

Charlotte GuntkowskiDave Morrow

What is the Affordable Care Act (ACA)?

• Legislation passed March 23rd, 2010• Some parts already implemented

– 100% Wellness, Children up to age 26, Children under 19 cannot be declined…

• Includes an Individual Mandate in 2014– Everyone must have an ACA compatible

health insurance plan or pay a penalty/tax– Employers with 50 or more full time

employees, or full time equivalents must provide an ACA compatible group plan or pay a penalty/tax of $2000/EE in 2014

What are ACA Compatible Plans?

• Cover 10 categories of Mandated Essential Health Benefits

• Free physical/preventative care each year

• Limited deductibles and out of pocket expenses

• Unlimited coverage• Everyone is insurable

Will premiums go up or down?

• The law mandates additional new benefits and protections

• Age Bands limited to 3 (currently 5)– Premiums for older adults cannot be more

than 3 times the premium for young adults.• Everyone will be insurable regardless of

Pre-existing Conditions • New Taxes and Fees - as much as $475

a year for the average family• What is the answer?

Higher Premiums

What are Exchanges?

• Exchanges will be marketplaces for purchasing insurance. Each state must set up an exchange or use the Federal Government Exchange

• FL has opted to use the Federal Exchange

• Insurance carriers have the option to sell plans on the exchange or not

• Imagine an Amazon or Travelocity type site for purchasing health insurance

What are the Exchange Plans?

• Plan tiers are categorized by “actuarial value”

• As an example, a Gold Plan will pay 80% of their health care expenses

• Enrollees will pay 20% through a combination of deductibles, copays, and coinsurance

What is the timeline for enrollment?

• October 1 - December 15, 2013 Open Enrollment for Jan 1st, 2014 effective date

• December 16th – March 31, 2014: Effective date will be out a month or two

• April 1, 2014 – September 30, 2014 enrollment requires a qualifying event– Job change, marriage, plan termination…

Will there be Government Subsidies?

• Those with a low income below the Federal Poverty Level (FPL) will qualify for Medicaid

• Those with household income between 100% and 400% of FPL will qualify for subsidies and must purchase on the exchange to receive them

• Those with FPL over 400% will not qualify for subsidies and can choose to purchase a plan on or off the exchange

• Some will choose a non-qualified plan and some will choose no plan and they will pay the penalty/tax

How much do Exchange plans cost?

Monthly premiums are based on household size, age, and income

Single Person

Size 1

Age 40

Income $40,000

Total Est Premium $368

Federal Subsidy $51

Indiv. Paid Premium $317

Annual Premium Cost $3804

Family of 4

Size 4

Age 40, 40

Income $80,000

Total Est Premium $1102

Federal Subsidy$469

Family Paid Premium$633

Annual Premium Cost $7596

*Using UC Berkley calculator based on Silver plan.

Are there alternatives?

• Creditable Short Term Major Medical plans• No Free Physical• No Pre-existing Conditions Covered• Annual Policy Limits of $2 Million Dollars

Per Person• Doctor Office Copays• 12 Month Term – unlimited reapplies

Why would anyone want one of these plans when they could have an Exchange plan?

How much? Any penalties?

Monthly premiums are based on # insured, age, and health

Single Person

Size 1

Age 40

Health Good

Estimated Premium $160

Monthly Penalty $34

Premium & Penalty $194

Annual Cost $2328

Annual Savings $1476

Family of 4

Size 4

Age 40, 40

Health Good

Estimated Premium $402

Monthly Penalty $58

Premium & Penalty $460

Annual Cost $5520

Annual Savings $2076*HII 1st Med 12 month STM in 34953 Zip Code

Have Pre-x? Or are you Healthy?

• Pre-existing Conditions – Choose an ACA Compatible Plan

• Healthy – Short Term Major Medical• Major Health Event – Accident, Critical

Illness…• After Deductible + Coinsurance

100% Coverage up to $2 Million dollars• Now you have a pre-existing condition,

what do you do?• ACA Plan Covers Pre-existing Conditions

Unlimited Coverage no waiting period

How about Tax Free Benefits?

• Why do employers want to offer group health plans?

– To attract and maintain good employees– SAVE MONEY ON TAXES!

• Why then do so many small business not offer group health insurance?

1. It is expensive

2. Can’t meet 75% employee participation requirements

3. Can’t afford 50% premium participation requirements

What is a good Referral?

• Do you know a small business owner who does not offer group health insurance who would like to save on taxes?

• Do you know an employee who’s employer does not offer group health insurance and would like to save on taxes and increase their take home pay?

What will a Defined Contribution Plan do?

Allows Employees to pay for ind health ins with pre-tax dollars

Gross Pay $3000

Taxes:

Federal Income Tax $450

SS Medicare Tax $229

Net Pay$2321

Medical Ins after taxes $500

Net Spendable Income$1821

$3000

$500

$375

$191

$1934

$1934

Medical Ins Pre-Tax

Employee pay example before Defined Cont Plan

After

That is an increase of $113 a month or $1359 a year in Net Spendable Income!

What is in it for the Employer?

• An employer with 10 employees using the previous example could save $4,000 or more a year in taxes.

• And these benefits will help them to attract and retain good employees

• Do you know anyone who might be interested?

Can any of this be done today?

• Yes, if you are healthy you may be able to save money by switching to a Short Term Major Medical plan today.

• An employer can establish a Defined Contribution Plan today and save himself and his employees money on taxes today.

• Do you know anyone who might be interested?

What is the Hook?

Charlotte Guntkowski

Dave Morrow

Don’t let a sickness or illness

turn into a Financial Crisis!

Get Health Insurance today!

What is the Federal Poverty Level?