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Health Care Reform Challenges Repeal will be challenging Funding will be a problem
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Health Care Reform Challenges #1 2000 pages of legislation 100,000 pages of rules
Repeal will be challenging
Funding will be a problem
How to pay for it? Is it enough? Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
0.9% Additional Medicare tax on earned income (2013) Due on earned income in excess of $200K for single taxpayer or $250K for
married filing jointly or $125K married filing separately.
3.8% Medicare tax on unearned income (2013) Due on un-earned income on individual taxpayers with a modified
adjusted gross income of in excess of $200K for single taxpayer or $250K for married filing jointly or $125K married filing separately. Consult your tax professional
Tanning tax 10% (2010) Annual Pharma fee (2011 ) begins in at 2.5Billion ($27B) Annual Medical Device fee (2012) 2.3% of sales ($20B) Annual Insurer fee (2014) ($60B) Cadillac Tax, (2018) 40% excise, ($32B)
EMPLOYER SPONSORED COVERAGE Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
Employers are NOT required to offer coverage BUT employers who choose not to offer coverage
will pay a penalty starting in 2014 Penalty applied to employers with 50 or more
FTEs (30hrs/wk) Penalty is $2000-3000 per employee, per year. Applied to employee count over 30 (exempt
on the 1st 30 FTEs)
Employer Mandate (2014)
• Employer plans must be at least 60% actuarial value
• Employer plan must
cost less than 9.5% of income.
Individual Mandate (2014) Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
If you work for an employer who has OVER 50+ employees who chooses to pay the penalty and not offer coverage
If you work for an employer who has UNDER 50 employees (no penalty) and does not offer coverage Individual Penalty = $695 per year in 2014 and phases to 2.5% of
taxable income.
Subsidies will be available for up to 400% of the poverty level (88,000/yr for a family of four) Medicaid expanded to 133% FLF in all states.
Exchanges
All U.S. citizens and legal resident are required to have coverage. You must comply with the individual mandate if. . .
Grandfathering Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
Grandfathering allows groups and individual members with an existing plan prior to 03/23/2010 to be exempt from the new product requirements effective in 2014 and most of the 09/23/2010 requirements. To maintain grandfathered status, a client must continue to keep the plan and the plan’s benefits “essentially” the same. Examples;
Reductions of benefits or increases to out of pocket spending (higher deducible and co-pays)
Grandfathering Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
• Plans issued prior to March 23, 2010 • No significant changes to benefits
(deductibles + co pays) Grandfathered
• Plans started/modified after 03/23 but before 09/23
Exempt until next renewal
• Plan started or significantly modified after September 23, 2010.
Not Grandfathered
High Risk Pool Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
Must be with out coverage for 6 months
Must have been declined for coverage by 2 carriers
Available Sept 1,2010
I’m told, 2000 spots available (perhaps more in future)
Dependent Coverage Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
Expanded to 26 (28 for Ohio) Only if no other coverage is available
Most dependent s will be eligible for addition to their employer plan starting at their next open enrollment. Additions are made regardless of student or marital status. Additions need NOT be a dependent based on IRS definition. Child may be married and still be added
Spouse cannot be added (but could be added to her parents plan).
Employer not required to pay for dependent
Health Savings Account Changes Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
OTC are not considered a qualified medical expense starting in 2011.
Penalty for early withdraw jumps from 10% to 20%
FSA contributions are limited at 2500/year.
What is a Health Savings Account?
A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). Similar to an IRA, the money you deposit in an HSA is tax-free. You don't pay taxes on qualified withdrawals, either. In effect, it's like getting extra money from the government to pay for health-care.
Exchanges (2014) Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
Online shopping for people utilizing any federal subsidy or
incentives. Small Health Insurance Tax Credit (50% in 2014) Medicaid Subsidies (400 FPL)
Plans may be packaged based on actuarial value 60% (Bronze) 70% (Silver) 80% (Gold) 90% (Platinum)
Likely another sales channel for subsidy takers, facilitated and navigated with the help of licensed brokers.
Changes September 23, 2010 Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
No pre-existing conditions under 19 years old Dependent coverage to 26 (if no other coverage is
available). Ohio law expands this to 28
No lifetime limits on essential benefits Restricts annual limits on essential benefits No rescission (except for fraud) Participant may choose PCP No pre-authorization for OB/GYN ER covered in and out of network No cost sharing on preventive
Changes in 2011 Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
2011 Medicare Advantage cuts begin
2011 No longer allowed to use FSA, HSA, HRA, Archer MSA distributions for over-the counter medicines
Americans begin paying premiums for federal long-term care insurance (CLASS Act) (Abandoned)
Health plans required to spend a minimum of 80% of premiums on medical claims
Penalties for non-qualified HSA and Archer MSA distributions double (to 20%)
Employers required to report value of health benefits on W-2 (postponed to 2012)
2014 Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
All health products will be guarantee issue
No health status rating; ratings limited to Age 3:1 Tobacco 1:5:1 Family Size Geography
Health Insurance products must exhibit at least 60% “actuarial value”
Employer mandate (Play or Pay)
Individual mandate (Play or Pay)
Larger Group Reform Areas of Interest
Value of employer-sponsored coverage on W-2s for 2012 tax year – meaning W-2s issued in January 2013 (originally required earlier, but the IRS delayed the requirement until the 2012 tax year for large employers and the 2013 tax year for employers who issue fewer than 250 W-2s)
Uniform coverage summaries/60-day notice for material modifications
Employee notification of exchanges and premium subsidies
Maintaining Coverage Navigating Health Reform 2010
Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com
INDIVIDUAL
COBRA
HIPPA CONVERSION
OPEN ENROLLMENT
HIGH RISK POOL
MEDICARE
GROUP
The Central Ohio Professional Education Council (COPEC) is an independent, not-for-profit organization created to assist individuals, families, business owners and professionals in reaching their goals by providing information and education about resources in the local community. We provide community groups with objective information on critical and timely issues by sponsoring no-cost educational workshops and individual consultations. These educational opportunities are provided through experienced professionals representing a variety of planning disciplines.
Learn more at www.copeceducation.org