The Affordable Care Act:
What Independent Consultants Need to Know
Presented by Independent Worker Experts
Gene Zaino and Dave Putt
December 2013

Presenters
Gene Zaino
President and CEO
Dave Putt
VP, Consultant and Client Services

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Agenda
Affordable Care Act
Coverage Options for Independents
Tax and Financial Impacts
MBO’s Approach to Healthcare for ICs
Predictions

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
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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

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 www.healthcare.gov
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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
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Typical
Deductible
$0
10%
$6,350
$6,350
$0
$6,350
Catastrophic
Up to age 30

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

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

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.**

Additional Benefits MBO Offers
• Retirement Planning
• Business Administration
– Personal business manager and online business center
• Tax Withholdings
• Business Insurances

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

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