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The Affordable Care Act: What Independent Consultants Need to Know

  1. The Affordable Care Act: What Independent Consultants Need to Know Presented by Independent Worker Experts Gene Zaino and Dave Putt December 2013
  2. Presenters Gene Zaino President and CEO Dave Putt VP, Consultant and Client Services
  3. A Full Service Business Operating System Solution §  §  §  §  §  §  §  §  §  3 BOSS service slide Your Online Business in the Cloud Complete Corporate Infrastructure Instant F500 Supplier Credentials Expert Support Business Administration Contract Negotiation Liability Coverage Executive-style Benefits Access Valuable Resources We make it easy for self-employed professionals and their clients to work together
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  6. Agenda Affordable Care Act Coverage Options for Independents Tax and Financial Impacts MBO’s Approach to Healthcare for ICs Predictions
  7. The Affordable Care Act Defined Goal: To Increase the Number of American’s with a minimum level of health Insurance coverage •  Individual Mandate (effective 1-1-2014) –  Must have health insurance or face a penalty •  Employer Mandate (effective 1-1-2015) –  Provide health insurance to all full-time employees or face a penalty •  Public “Marketplace Exchange” –  Created to find and choose insurance coverage –  Impacts ICs private health insurance and medical HRAs 7
  8. Options for Independents to Acquire Insurance Independent consultants can obtain minimally qualifying coverage (the coverage required to avoid an IRS penalty) in a number of ways including: §  The new Health Insurance Marketplace §  Employer-sponsored plans (through a company Looking for coverage? like MBO Partners or through a spouse or parent’s employer) §  Government sponsored plan such as Medicaid §  Individual or Family Health Plan
  9. Public Marketplace Insurance Exchange •  Marketplace is intended to be a competitive online insurance shop which provides government-regulated and standardized health insurance plans •  Design is intended to help individuals and businesses compare and chose insurance options ü  States can elect to have their own Marketplaces ü  Broad participation in health insurance is critical; allows expensive medical treatment costs to be spread across a large group instead of just a few ü  Links to all Marketplaces can be found at 9
  10. Marketplace Insurance Plans •  Plans are separated into categories based on the % of costs they cover or “actuarial value” •  Categories are Bronze, , Gold, or Platinum Plan Type   Typical Coinsurance   Out- of- Pocket Maximum   Bronze   $5,000   30%   $6,350   Silver   $2,000   20%   $6,350   Gold   $0   20%   $6,350   Platinum   10 Typical Deductible   $0   10%   $6,350   $6,350   $0   $6,350   Catastrophic Up to age 30  
  11. Tax Impacts of the ACA for ICs •  Premiums through the Marketplace are after-tax only –  Tax credit for those with household income between 100% and 400% of the poverty line –  Generally, subsidy immaterial once income surpasses $28K •  Private Individual Plan Premiums –  May be deductible but have 7.5% AGI limitation
  12. Unintended Consequences and Nuances Affecting ICs •  Decline of Private Insurance Market –  State specific •  Arbitrary Cancellation of Qualifying Plans –  Despite extended deadline •  Spousal Penalty/Carve-out –  Denial of access –  Higher spousal premium •  Tax deductibility of premiums –  Insurance bought on the marketplace vs. privately –  Employer cannot pay pre-tax premium payment on plan bought on the marketplace on behalf of an employee
  13. MBO’s Approach to Healthcare •  Provide Group Plan Coverage •  Premiums are Pre-tax •  No Spousal Penalties •  Coupled with HRA up to $10,000 •  Annually review insurance carrier to ensure best rates **MBO Associates are professionals whose primary occupation is an independent consultant.**
  14. Additional Benefits MBO Offers •  Retirement Planning •  Business Administration –  Personal business manager and online business center •  Tax Withholdings •  Business Insurances
  15. Predictions •  Private Plans will go away if Marketplaces succeed •  Large employer plans are more attractive – more stable •  Continuing court cases on aspects of the ACA for years to come •  ICs will be forced into Marketplace or need large employer plans •  Exchanges will continue to struggle for the next few years •  Government subsidy to Insurers goes away and premiums rise •  Income Taxes will go up to fund the ACA program
  16. Additional Information on MBO Partners •  EMAIL us - •  VISIT our website - •  FOLLOW us on Twitter - @mbopartners •  SIGN UP for our monthly newsletter 16