A copy of the presentation given at the CBIZ CFO Breakfast Series on August 28, 2014. PPACA - Staying Compliant & Strategic. http://www.cbiz.com

1. PPACA:
Staying Compliant & Strategic
CBIZ – CFO Breakfast Series
August 28, 2014
Presented by: Robert J. Aschentrop
Director, CBIZ Benefits & Insurance Services, Inc.

2. Agenda
 YTD – Changes and Clarifications
 Compliance Preparation
 Emerging trends, ideas & strategies
Success?
 Informative and open discussion
 Q&A throughout
 Leave with 1-2 valuable takeaways
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3. 3
2014 ACA provisions had a material
impact on the health care market…
X
Levies taxes and fees to fund
subsidies and risk management
mechanisms
Penalties for failing
to purchase health
insurance
Cannot deny coverage or rating
applicants based on health status
Individual
Mandate
Taxes and
Fees
Key
2014
ACA
provisions
Levels the playing field and
mitigates impact of
guaranteed issue and pricing
uncertainty short term
Penalties for
employers who fail to
offer affordable
comprehensive
coverage
Lowers cost for low and
middle income populations
in the Individual market
Government regulated
Individual and Small
Group health insurance
marketplaces
Risk
Management
Mechanisms
Employer
Mandate
Guaranteed Issue
(GI) and Rating
Changes
Tax Credits
and Subsidies
Insurance
Exchanges
Source: Congressional Budget Office

4. 4

5. 5
Changes and Clarifications in 2014

6. Changes and Clarifications - 2014
• Draft IRC section 6056 (ER) and 6055 (SF) reporting
• Form 1095-C
• Very specific ER, plan, and participant info
• Report to IRS and to each FTE
• FTE statement provided by 1/31 for prior yr.
• Two alternative Reporting Methods
1. Certification of Qualifying Offer
2. Report without separate ID of FTE’s
• MEC to 98% of all EE’s and dependents
• Filing due no later than 2/28 each year for prior year plan (3/31 if
filed electronically)
• Compliance Prep: Does your current system(s) capture the
relevant data necessary for the required reports? 6

7. Changes and Clarifications – 2014 cont.
• 2015 Affordability Standards
• 9.56% of EE’s household income (up from 9.5%)
• Specific EE data necessary
• Health Plan Identifier (HPID)
• Used for transmittal of electronic health information
• Must be obtained by 11/5/14 for self-funded plans with claim
receipts >$5M thru CMS Enterprise Portal
• 11/5/15 deadline for plans <$5M
• 11/7/16 – all plans must utilize
7

8. Changes and Clarifications – 2014 cont.
• Orientation Period Rules (not to be confused with
measurement period rules!)
• Allows for one calendar month minus one day before standard
waiting period, then the maximum of a 90-day waiting period
could commence.
• Must offer by 1st day of 4th month or risk ER shared
responsibility exposure
• Small Business Tax Credit
• Eligibility - <25 FTEE w/ avg. income <$50,800 (indexed)
• Must cover 50% of single coverage cost
• Only available if plan is purchased on the SHOP and only
available through 2015 currently.
• Credit is up to 50% of premium amount paid by ER 8

9. Changes and Clarifications – 2014 cont.
• Cost-Sharing restrictions on Essential Health Benefits
• Out-of-Pocket limits match those of HSA
• $6,350/$12,700 (2014)
• $6,600/$13,200 (2015)
• Generic vs. Brand Name Drugs
• No requirement to count cost difference in MOOP
• Updated COBRA and CHIP notices
• Expanded language regarding marketplace options
• 60-day enrollment window for marketplace
• Note: Individuals can ONLY enroll in a marketplace
plan during federal open enrollment or after a
qualifying life event.
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10. 10
Preparing for Compliance

11. Preparing for Compliance
• Health Reform Checklist
• 2015 preparation and beyond
• Concise resource tool
• Chart of Affordable Care Act (ACA) Notice Requirements
• Detailed description of ER responsibilities
• Health Reform Bulletins
• Nearly instant updates on regulation clarification and
guidance as ACA compliance questions are addressed
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12. Preparing for Compliance
Measurement Periods
• Tracking Employees
• Standard measurement for ALL ongoing EE’s
• Initial measurement period of new EE’s
• Administrative periods for standard and initial periods
• Why should you care?
• If you are an ER that will utilize longer measurement periods due
to turnover, etc you will need to provide an audit trail.
• Technologies
• Equifax / Healthe(fx) / Payroll vendors
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13. Preparing for Communication
1. How does our communication strategy provide an audit
trail for future compliance reporting?
2. Are we optimizing our cost and effort each year in our
communication and open enrollment process?
3. Is our employee handbook, benefits guide, and on-boarding
process compliant for new hires?
4. How are we communicating ACA compliance with our
employees?
5. Are you still using a “passive” open enrollment process?
13

14. 14
Emerging Trends and Strategies

15. Funding Analysis
Fully-insured vs. Self-funding
• Risk/cost gap differential is narrowing due to ACA taxes
• Watchful eye on discrimination regulations for fully-insured plans
• Employee engagement considerations
» Strategic HRA plan
» Centers of value
Emerging trend of ‘cost plus’ self-funding
Paradigm shift in network and reimbursements
» Doctor Network, but no hospital network
» Greater of Medicare + 20% or Cost + 8%
» Fiduciary liability of balance billing taken by TPA
15

16. Network Analysis
Does a company plan network need to be
all doctors and all hospitals to all employees?
High-Performance Networks
• Targeted network of physicians and facilities with quality outcomes
• Premium cost and co-pay/co-insurance cost differentials
Emerging trend of ‘cost plus’ self-funding
Paradigm shift in network and reimbursements
» Doctor Network, but no hospital network
» Greater of Medicare + 20% or Cost + 8%
» Fiduciary liability of balance billing taken by TPA
16

17. Contribution Strategy Considerations
Today:
Defined benefit vs. defined contribution methodology
Different employer contributions for different plan designs
Focus on “affordability” calculation for lowest cost plan
2015:
Introduction of MEC plans at lower cost to ER and EE
Push in Washington for qualified “Copper” level plans
Beyond:
Close eye on larger group exchange plans and premiums
* More efficient purchasing of insurance could hurt ER’s performance
Traditional employer-sponsored coverage may look very different
17

18. Transparency Tools
How is your company utilizing the existing pricing and
quality tools available and evaluating others in the market?
Technology in the market is finally catching up
• Carrier-owned and independent solutions
• Beginning to chip away at a market with historically cloaked pricing
Emerging trend of ‘reference-based’ benefits
Self-funded employers set limits on procedural and facility costs
» Limit is the discretion of the employer – often calculated as plan avg. plus 10%
» EE free to choose provider and facility, but may incur costs outside of the medical plan
» Materially promotes cost transparency, quality of outcomes, of consumer awareness
18

19. Private Exchanges
19
Some employers are re-tooling the
benefit enrollment process…
1. Group & Individual Approaches:
• Single carrier and multi-carrier designs
• 3-10 medical plan designs for any given group
• Emphasis on voluntary products
2. Key Components:
• Defined Contribution from Employer
• Technology-driven decision & enrollment tools
• Employee Education

20. High Risk for Low Participation
Today:
Typical participation range 70-90% of non-waiver eligible EE’s
2015:
25-50% participation of non-waiver, newly-eligible EE’s
So What?
1. Fully-insured plans – carriers are loading the premium for anticipated
risk
2. Self-insured plans – limited re-insurance contracts for spec S.L.
– Most contracts will likely charge a material risk premium for low participation
– Short-form health questionnaires will likely be required by carriers
20

21. Nondiscrimination Reminder
• Self-funded Plans- Nondiscrimination rules have been in effect
since 1974 under Section 105(h)
– Essentially states that contribution strategies and/or access to richer medical plans
in favor of highly compensated employees is illegal.
• Penalty = taxation of premium and benefits received by HCEs
• Fully-Insured Plans – Rules are set forth in ACA, but guidance has
not been issued. Until further notice, discriminatory practices are
still allowed in the fully-insured plan environment.
• Penalty is expected to be more severe than self-funded when
regulations are finally issued.
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22. 22

23. Discussion?
23

24. Robert J. Aschentrop, Business Consultant
CBIZ Benefits & Insurance
913.234.1959 | raschentrop@cbiz.com
With 15 years of financial industry experience, Robert joined CBIZ in 2010 to help build the employee
services consulting practice. His chief focus in this capacity is analyzing the way companies finance,
mitigate and transfer business and health risk.
Robert started in the financial service industry in graduate school while working for the Iowa State
University Foundation. He worked with individual, corporate, and foundation donors. This passion to
serve as both the personal relationship contact and advisor for these clients helped develop his vision for
the way ‘trusted advisor” relationships should be defined.
Prior to joining CBIZ, Robert was a Kansas City commercial market vice-president for US Bank and
served as the Executive Director for the Northland Community Foundation, working with high net worth
individuals and corporations from a tax and asset perspective, to establish charitable foundations
utilizing optimal and/or unique assets.
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25. 25
SAVE THE DATE
2014 CFO Breakfast Series Quarter 4
ACCOUNTING & TAX UPDATE
FEATURING VARIOUS EXPERTS | CBIZ & MAYER HOFFMAN MCCANN P.C.
Thursday, October 30, 2014 7:30am – 9:00am
(continental breakfast served)
LOCATION: Carriage Club | 5301 State Line Road, Kansas City, Missouri 64112
TOPICS WILL INCLUDE:
 What is the IRS doing today?
 Tangible Personal Property Regulations
 Kansas Income Tax & how it effects YOU
 Reducing Income Tax: Structures and Incentives
 Look to the Horizon – Accounting in the Next Year
 Private Company Accounting
 Financial Reporting Changes for 2014