This document provides a timeline of provisions from the Patient Protection and Affordable Care Act (PPACA) that will affect businesses. Key provisions discussed include the employer mandate taking effect in 2014, which will require employers with 50 or more full-time equivalent employees to provide affordable health insurance or face penalties. The document also outlines other upcoming requirements such as increased Medicare taxes, mandatory employer reporting on employee health insurance costs, and health insurance exchanges beginning in 2014.

1. Pa#ent
Protec#on
and
Affordable
Care
Act
(PPACA):
A
Timeline
of
Provisions
That
Will
Affect
Your
Business
Presented
by
Grace
Jaen,
G&A
Partners

2. Disclaimer
• This
is
the
interpreta#on
as
we
know
it
today
(2/28/2013),
and
is
subject
to
change.
• In
general,
this
presenta#on
is
designed
for
regula#ons
and
requirements
that
are
specific
to
fully
insured
plans.
Self
Funded
plans
will
have
many
addi#onal
requirements.

3. Agenda
• Why
is
it
important
now?
• What
has
already
happened?
• What
this
means
for
small
group?
• What
this
means
for
large
group?
• Pay
or
Play
• What
decisions
do
you
need
to
make
to
prepare?

4. Why
so
much
focus
now?
• It
wasn’t
repealed
• Elec#on
• The
#meline…employers
will
be
subject
to
‘pay
or
play
provisions’
next
year

5. Grandfathered
Plan
A
plan
that
was
in
place
on
March
23,
2010
If
you
have
made
any
changes
in
your
health
plan,
you
will
lose
this
status,
including:
•
Increasing
employee
contribu#ons
of
5%+
• Change
deduc#ble
by
15%+
• ANY
increase
in
EE
coinsurance
percentage
• Increase
copayment
more
than
$5
or
15%
• Eliminate
any
coverage
• Reduces
annual
limits
Employer
is
responsible
in
providing
proof
and
disclosure
if
grandfathered

6. 2010:
Small
Business
Tax
Credit
Qualifica#on:
• Less
then
25
employees
• Average
salary
<$50,000
• Employer
pays
50%+
for
employee
only
coverage
Maximum
Credit
is
up
to
35%
of
what
the
employer
pays
• Non
profits
are
eligible
(25%)
In
2014
• Max
Credit
changes
to
up
to
50%
(35%
for
non
profits)
• ER
must
par#cipate
in
the
exchange
• You
may
not
get
credit
two
consecu#ve
years

7. 2011:
MLR
• Insurance
plans
required
to
comply
with
new
medical
loss
ra#os
(MLR):
80%
for
individual
and
small
group
plans
and
85%
for
large
group
plans.
• Insurance
companies
are
required
to
pay
a
lump
sum
or
premium
holiday
for
rebates
• What
can
an
employer
do
with
rebate?
• If
employer
paid
100%,
the
employer
can
retain
it
• If
employee
paid
ANY,
you
must
use
it
as
a
plan
asset
• Distributed
to
par#cipants
• Used
toward
future
par#cipants

8. 2012:
Employer
Repor#ng
W2s
• 250+ processed W2s
• 2012 tax year
• This value is not taxable
• Must include:
• Major medical
• Mini Med
• Onsite Medical Clinic
• Flex Cards
• EAP*
• Wellness Program*
*if subject to COBRA

9. 2013:
Increased
Medicare
Tax
• Increase
Medicare
tax
rate
on
wages
by
0.9%
(from
1.45%
to
2.35%)
on
earnings
over
$200,000
for
individual
taxpayers
($250,000
for
joint
filers)
• Employer
doesn’t
have
to
no#fy
employee
• Employer
doesn’t
have
to
match
the
excess
tax

10. 2013:
Employer
No#ce
of
Exchanges
• March
1,
2013
(delayed)
• Exchange:
Mechanism
for
individuals
or
groups
to
gain
access
to
health
care
financing
op#ons
through
a
program
administered
by
state
and/or
Federal
government.
• Employers
are
required
to
no#fy
employees
that
exchanges
exist
and
that
they
may
be
eligible

11. 2014:
Mandates
Everyone
must
have
insurance,
or
pay
a
penalty,
except:
• Those
who
choose
not
to
buy
a
policy
for
religious
reasons
• Undocumented
immigrants
• Incarcerated
ci#zens
• Members
of
Na#ve
American
tribes
• Those
with
family
income
below
the
threshold
requiring
a
tax
return.

12. 2014:
Mandate
Penal#es
The
penalty
for
non-­‐compliance
will
be
phased-­‐in
according
to
the
following
schedule:
• 2014:
$95
(or
1%
of
income,
whichever
is
higher)
• 2015:
$325
(or
2%
of
income)
• 2016
:$695
(or
2.5%
of
income)
• 2017
Forward:
the
penalty
will
be
increased
annually
by
the
cost-­‐of-­‐living
adjustment.

13. Where
will
they
get
insurance?
• Employer
• Large
Employers
are
subject
to
a
penalty
for
not
providing
coverage
• Medicaid/Chip
/Medicare/Tricare
• Exchange
• To
receive
exchange
subsidy,
you
must
not
have
an
affordable
op#on
through
your
employer
(9.5%
of
EE
coverage)

14. PPACA
Large
Employer
What
is
considered
as
a
large
employer?
W2
Compliance
in
2012
tax
Year
250+
W2’s
processed
2014
Eligibility
to
par#cipate
in
SHOP
exchange
100+
Employees
are
not
eligible
Automa#c
Enrollment
200+
Full
Time
Equivalent
Pay
or
Play
50+
Full
Time
Equivalent
Plan
Limits
50+
Full
Time
Employees
Employer
Repor#ng
100+
Full
Time
Employees

15. Employer
Tax:
What
is
a
Large
Employer?
• 50+
Full
Time
Equivalent
Employees
• Excludes
Seasonal
workers
• Full
Time
is
considered
30
hours/week
• A
PEO
does
NOT
affect
your
size
as
an
employer
• Common
Ownership
DOES
affect
your
size
as
an
employer
0-­‐20%
• Rarely
found
to
have
common
ownership
20-­‐50%
• Assumed
to
not
have
common
ownership
• Burden
on
the
employer
to
show
why
there
is
common
ownership
50-­‐80%
• Assumed
to
have
common
ownership
• Burden
on
employer
to
show
why
there
is
NOT
common
ownership
80-­‐100%
• Common
Ownership

16. Calcula#ng
FTE
• Example:
• 35
Full
Time
Employees
• 42
Part
Time
Employee
working
20
hours
a
week
• #
of
PT
Employees
X
#
of
Hours/Week
X
4
/120
• 42
PT
Employees
X
20
hrs/wk
*
4
/
120
=
28
• 35
FT
+
28
FTE
=
63
FTE

17. What
are
the
penal#es?
• Pay:
• $2,000
Per
Full
Time
Employee
minus
the
first
30
• This
is
a
monthly
payment
• Play:
• $3,000
per
Full
Time
Employee
who
par#cipates
in
the
exchange
and
receives
a
subsidy
or
above
(whichever
is
lower)

18. Affordability
Safe
Harbor
• If
Employee
Only
Coverage
on
base
plan
is
less
than
9.5%
of
income,
employer
will
be
safe
harbored
against
affordability
penalty
• Example:
• If
Jane
makes
$10/hr
and
works
30-­‐40
hours
a
week

19. 2014:
Employer
Penalty
Are
you
a
large
employer?
-­‐at
least
50
full-­‐#me
equivalent
workers
-­‐including
FT
and
PT
workers
-­‐excluding
seasonal
workers
(up
to
120
days
per
year)
Are
Any
of
your
full-­‐
:me
employees
in
an
exchange
plan
and
receiving
a
premium
credit?
Do
you
have
more
than
30
full-­‐:me
employees?
Do
you
provide
health
insurance?
Pay
Monthly
penalty,
lesser
of:
1/12
x
$2000
x
(number
of
full-­‐#me
employees
–
30)
or
1/12
X
$3,000
x
(#
FTEs
who
receive
credits
for
exchange
coverage)
Pay
monthly
penalty
of
1/12
x
$2,000
x
(number
of
full-­‐#me
employees
-­‐
30)
No
Penalty
No
Penalty
No
Penalty
yes
no
yes
no
yes
no
yes
no

20. Small
Employers
• Does
this
really
have
a
financial
impact
on
small
businesses?
• Will
you
lose
employees
by
not
offering
insurance?
• Will
you
have
a
harder
#me
recrui#ng
employees?

21. Plan
Limits
• Deduc#bles:
• $2,000
Individual
• $4,000
Family
Unit
• Out
of
Pocket
Maximums:
• $6,250
Individual
• $12,500
Family
Unit

22. Employer
Repor#ng
• 6055:
Enforcement
of
Individual
Mandate
• Name,
address,
tax
payer
ID
• Individual
informa#on
and
dates
of
coverage
• If
it
is
a
qualified
plan
• ”other
informa#on
HHS
requires”
• 6056:
Large
Group
Repor#ng
• Monthly
Premiums
(employee
contribu#on)
• #
of
FT
employees
by
month

23. Variable
Employee
• If
it
can
not
be
determined
if
an
employee
is
reasonably
expected
to
work
30+
hours/
week
• Employer
would
calculate
each
employee’s
status
by
looking
back
at
a
measurement
period
• Must
remain
eligible
for
the
stability
period

24. Variable
Employee

25. 2014:
Other
Provisions
• Wai#ng
Periods
• <90
days
• Automa#c
Enrollment
• Employers
with
200+
FTE
• Employees
may
opt
out

26. Beyond
2014
• Large
Employers
(100+)
may
par#cipate
in
the
exchange
(2017)
• Cadillac
Tax
(2018)
• 40%
Excise
tax
for
plans
that
exceed:
• $10,200
for
individual
coverage
• $27,500
for
family
coverage
• It
will
be
adjusted
for
infla#on

27. What
should
you
do
to
prepare?
• Small
Employer
• Am
I
going
to
keep
coverage?
• What
plan
design
changes
will
I
make
to
prepare
for
2014
plan
limits?
• Will
I
have
issues
recrui#ng
and
retaining
employees
if
I
don’t
offer
coverage?
• Do
I
want
to
grow?

28. Large
Employer
Considera#ons
• Am
I
going
to
cut
hours?
• What
dollar
figure
is
my
safe
harbor
for
affordability?
• Will
I
change
my
contribu#on
strategy?
• If
I
decide
to
‘pay’,
will
I
have
a
harder
#me
recrui#ng
and
retaining
employees?

29. Ques#ons?
Please
send
all
ques#ons
and
comments
to
info@gnapartners.com