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Health Reform Discussion. Lisa Evans Director of Healthcare June 20, 2013. Agenda. Health Reform Provisions Employer Health Plan Standards Public Health Exchanges Employer Purchase Options Pay or Play Cadillac Tax. 2014 Health Reform Provisions. - PowerPoint PPT Presentation
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Health Reform Discussion
Lisa EvansDirector of Healthcare
June 20, 2013
Health Reform Provisions Employer Health Plan Standards Public Health Exchanges Employer Purchase Options Pay or Play Cadillac Tax
Agenda
3
No one can be turned down for coverage for health reasons
Everyone must buy health insurance coverage or pay a tax
2014: Greater of 1% of AGI or $ 95 per person2015: Greater of 2% of AGI or $325 per person2016: Greater of 2.5% of AGI or $696 per personFamily maximum is capped at 300% of individual tax.
Access will be provided through Health Exchanges in each state.
2014 Health Reform Provisions
2011 Cover up to age 26 for dependents
2012 Unlimited dollar coveragePreventative Services at 100%Must report health costs on W-2s
2013 Female Contraceptives covered at 100%
2014 No one can be turned down for coverage
No pre-existing limits are allowedReinsurance Fee (2014-2016)30 hour rule (monitoring starts in
2013)
2018 “Cadillac” tax
Health Reform Provisions
Coverage must be adequate ◦ Plan coverage value of at least 60% or more
Coverage must be affordable◦ Employee-only premium must not exceed
9.5% of employee’s AGI
Offer coverage to at least 95% of full-time employees
Employer Health Plan Standards
Every state will have option by 2014 or federal government will step in and establish.
Minimum coverage is required. Subsidies/credits will be available based on
income. Premiums will vary based on age, people
covered and zip code within set limits (3:1) Standardized options will be available:
Bronze Silver GoldPlatinum 60% 70% 80% 90%
Public Health Exchanges
Cost
Public Health Exchanges
Private Health Exchanges
Time2014
Health Care Employer Purchase Options
Employers
Subsidies only available in Public ExchangesExchange = Marketplace
Pay or Play
Employer Considerations
Fail to offer Minimum essential coverage
95% full-time employees/dependents*
Penalty = $2,000 per each full-time employee (-30) annually
*and one of those employees receives subsidy in Health Exchange.
Pay Option
Offered minimum coverage to at least 95% full-time employees & dependents
but not adequate/affordable*
Penalty - $3,000 per exchange enrolled employee (up to maximum of $2,000 per full time employees)
-No Penalty – offer coverage100% of employees who work >30 hours
ANDAdequate (> 60% value) AND Affordable (single premium cannot exceed 9.5% of employee’s AGI
PLAY Options
How will person get coverage in 2014?
*Using dollar estimates of 2014 Federal Poverty Level (FPL)
Spectrum of Opportunity
Optimal Play Play and Redirect Pay and Redeploy Pay and Exit
Strategies
Pay $2,000 penalty for all FTEs and direct
employees to Exchanges
Discontinue employer plan
Healthcare is core to attract/retain talent
High Margins
Low Turnover
Diverse Margins
Health benefits are a material consideration
Mix of high and low wage earners
Evaluate contingencies for future exit
Meet requirements
Structure contributions to encourage low-wage earner qualification for
subsidies
Meet requirements Discontinue employer plan
Employees will be paying their portion of cost with
after tax dollars.
Employees will be paying their cost with after tax
dollars.
Impact
Allow XXX employees to become eligible for
subsidies in Exchange Will employees move?
low subsidy? Pay $3,000 for those who enroll in
the Exchange. Must offer coverage >95%
group for those work >30 hours
Continue to manage our costs aggressively. If our
cost becomes significantly higher than the exchange, we should consider exiting providing employer coverage. Must offer coverage to 100% of
group >30 hours
Trend in costs will continueIncrease contributions from an average of $X to X annually (>9.5%)
Employer provides a subsidized dollar amount
for each employee in a HRA
If Employer moved current dollars paid to an
HRA? What type of increases would your employees see? Pay
$2,000 per FTE per year
Employer would loose the tax-free spending of the dollars
no longer spent on healthcare. Pay $2,000 per
FTE per year
Employer would discontinue employer plan.
High Turnover
Pay $2,000 penalty for all FTEs and direct employees to
Exchanges
Provide no financial subsidy
Pay $3,000 penalty for those who exit and are
subsidized by the Exchanges
Provide monetized value (e.g. Defined Contribution)
in whole or part
Optimally manage design and deliver of employer
sponsored plan
Employer's Role in Health Reform
Low Margins
Low wage earners Many Medicaid eligible
Employer Profile
PLAY PAYSpectrum of Opportunity
Effective 2018 and will be indexed by CPI+1%.
“40% tax on value of employer sponsored coverage over a given dollar threshold”
$ 10,200 Employee Only$ 27,500 Family
Separate High Risk or Retiree Single coverage rate:$ 11,850 Single Coverage$ 30,950 Family
“Cadillac” Tax
Thank you.
Questions?
To sign up for ELM information contact:Don Betts