2 Wells Insurance Today s Agenda Cost-Saving Strategies Deadlines & Implications for you Plan Design Changes Reinsurance Fees Employer Penalty Rules Reporting of Coverage Your Health Care Reform Partner - How we can help you become and stay compliant with rapidly changing ACA rules
3 Affordable Care Act Does this slide really need a Heading?
4 2015 Health Care Reform COST-SAVING STRATEGIES CURRENTLY IN USE BY SOME LOCAL GOVERNMENTS
5 Managing Costs 22 Cost-Saving Strategies Currently In Use By Local Governments 1. Dependent Eligibility Audit 2. Spousal Eligibility Audit 3. Smoking Surcharge 4. Change Networks 5. GAP Coverage 6. Health Reimbursement Accounts 7. Health Risk Assessments 8. Private Exchange 9. Dual Option Plans 10. HDHP / HSA 11. Cost Shifting 12. Eliminating Subsidies for Dependents 13. Spousal Surcharge 14. Amending Section 125 Plans for Open Enrollment 15. Level Funding Plans 16. Self-Funding Plans 17. Changing Non-Contributory Rates to Contributory 18. Carve out Stop-Loss from Blue Cross Blue Shield 19. Telemedicine 20. Medical Management 21. Clinics in-house 22. Direct Contact with Providers
6 2015 Health Care Reform STATUTORY DEADLINES & IMPLICATIONS FOR LOCAL GOVERNMENTS
7 Statutory Deadlines and Implications for Local Governments Section 6056 Reporting by an ALE member on the health care coverage offered to its full-time employees. Information is used to determine an employee s eligibility for the premium tax credit and to administer section 4980H Forms 1094-C (Transmittal of Employer Level Data) 1095-C (Employee Statement) Due Dates Furnished to employee by January 31, 2016 Filed with the IRS by February 28 or March 31, 2016 (if filing electronically)
8 Statutory Deadlines and Implications for Local Governments Section 6055 Reporting by anyone that provides minimum essential coverage to an individual during a calendar year. Information is used to determine the months in which an individual was covered by minimum essential coverage for section 5000A. (Non-ALE members report under section 6055 only) Forms 1094-B 1095-B
9 Statutory Deadlines and Implications for Local Governments Section 510 Liability / Anti-Abuse Provision
10 Statutory Deadlines and Implications for Local Governments Alternatives to Traditional Plan Offerings MEC Plan Competitive strategy for employers to avoid the ACA no offer penalty using minimum essential coverage Reference-based pricing
11 Statutory Deadlines and Implications for Local Governments Cadillac Tax Starting 2018, the ACA will impose a 40% annual excise tax on plans with annual dollar limits exceeding $10,200 for individuals or $27,500 for a family (not including vision and dental benefits).
12 2015 Health Care Reform PLAN DESIGN CHANGES
13 Plan Design Changes Cost-Sharing Limits Effective for plan years beginning on or after Jan. 1, 2014, non-grandfathered health plans are subject to limits on costsharing for essential health benefits (EHB). As enacted, the ACA included an overall annual limit (or an out-of-pocket maximum) for all health plans and an annual deductible limit for small insured health plans. On April 1, 2014, the ACA s annual deductible limit was repealed. This repeal is effective as of the date that the ACA was enacted, back on March 23, The out-of-pocket maximum, however, continues to apply to all non-grandfathered group health plans, including selfinsured health plans and insured plans. Effective for plan years beginning on or after Jan. 1, 2015, a health plan s outof-pocket maximum for EHB may not exceed $6,600 for selfonly coverage and $13,200 for family coverage.
14 2015 Health Care Reform REINSURANCE FEES
15 2015 Health Care Reform Reinsurance Fees The reinsurance program s fees will be based on a national contribution rate, which the Department of Health and Human Services (HHS) announces annually. For 2015, HHS announced a national contribution rate of $44 per enrollee per year (about $3.67 per month). The reinsurance fee is calculated by multiplying the number of covered lives (employees and their dependents) for all of the entity s plans and coverage that must pay contributions by the national contribution rate for the year.
16 2015 Health Care Reform EMPLOYER PENALTY RULES
17 2015 Health Care Reform Employer Penalty Rules One-year Delay for Medium-sized ALEs Eligible ALEs with fewer than 100 full-time employees (including FTEs) have an additional year, until 2016, to comply with the shared responsibility rules. This delay applies for all calendar months of 2015 plus any calendar months of 2016 that fall within the 2015 plan year. ALEs that change their plan years after Feb. 9, 2014, to begin on a later calendar date are not eligible for the delay. To qualify for this delay, an employer: 1) Must employ a limited workforce of at least 50 full-time employees (including FTEs), but fewer than 100 full-time employees (including FTEs) during ) May not reduce its workforce size or overall hours of service of its employees in order to satisfy the limited workforce size condition during the period beginning on Feb. 9, 2014 and ending on Dec. 31, ) May not eliminate or materially reduce the health coverage, if any, it offered as of Feb. 9, 2014, during the period ending Dec. 31, 2015 (or the last day of the plan year that begins in 2015)
18 Employer Penalty Rules To Do: Determine whether you qualify for the one-year Delay for Medium-sized ALEs: Review whether you have fewer than 100 full-time employees (including FTEs) for 2014 and meet the other requirements for the one-year delay. Work with your advisors to monitor IRS information on the certification process for medium-sized ALEs. Keep in mind that ALEs eligible for the one-year delay must still report under Section 6056 for 2015.
19 2015 Health Care Reform Full-Time Employees An optional safe harbor method for determining full-time status, intended to give employers flexible and workable options and greater predictability for determining fulltime status. The details vary based on whether the employees are ongoing or new, and whether new employees are expected to work full-time or are variable, seasonal or parttime. This method involves a measurement period for counting hours of service, an administrative period that allows time for enrollment and disenrollment, and a stability period when coverage may need to be provided, depending on an employee s average hours of service during the measurement period. Look-back Measurement Method If an employer meets the requirements of the safe harbor, it will not be liable for penalties for employees who work full-time during the stability period, if they did not work full-time hours during the measurement period.
20 2015 Health Care Reform Affordability of Coverage Under the ACA, an employer s health coverage is considered affordable if the employee s required contribution to the plan does not exceed 9.5 percent of the employee s household income for the taxable year (adjusted to 9.56 percent for plan years beginning in 2015 under Rev. Proc ). Household income means the modified adjusted gross income of the employee and any members of the employee s family. Because an employer generally will not know an employee s household income, the IRS provided three affordability safe harbors that employers may use to determine affordability based on information that is available to them. These safe harbors allow an employer to measure affordability based on: 1. The employee s W-2 wages; 2. The employee s rate of pay; or 3. The federal poverty level for a single individual.
21 2015 Health Care Reform Minimum Value Under the ACA, a plan provides minimum value if the plan s share of total allowed costs of benefits provided under the plan is at least 60 percent of those costs. The IRS and HHS provided the following three approaches for determining minimum value: 1. A Minimum Value (MV) Calculator (provided by HHS); 2. A design-based safe harbor checklists; and 3. An actuarial certification. In addition, any plan in the small group market that meets any of the metal levels of coverage (that is, bronze, silver, gold or platinum) provides minimum value.
22 Employer Penalty Rules To Do: Review your health plan design: Use the monthly measurement method or the look-back measurement method to confirm that health plan coverage will be offered to all full-time employees (and dependent children). If you have employees with varying hours, the look-back measurement method may be the best fit for you. To use the look-back measurement method, you will need to select your measurement, administrative and stability periods. Please contact Wells Insurance for more information on the look-back measurement method. Review the cost of your health plan coverage to determine whether it s affordable for your employees by using one or more of the affordability safe harbors. Coverage is affordable if the employee portion of the premium for the lowest-cost, selfonly coverage that provides minimum value does not exceed 9.5 percent of an employee s W-2 wages, rate-of-pay income or the federal poverty level for a single individual. The cost of family coverage is not taken into account. Determine whether the plan provides minimum value by using one of the four available methods (minimum value calculator, safe harbor checklists, actuarial certification or metal level).
23 2015 Health Care Reform REPORTING OF COVERAGE
24 2015 Health Care Reform Reporting of Coverage The ACA requires ALEs to report information to the IRS and to employees regarding the employer-sponsored health coverage. The IRS will use the information that ALEs report to verify employer-sponsored coverage and administer the employer shared responsibility provisions. This reporting requirement is found in Code section All ALEs with full-time employees, even medium-sized ALEs that qualify for the one-year delay from the pay or play rules, must report under section 6056 for In addition, the ACA requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs and any other entity that provides minimum essential coverage (MEC) to file an annual return with the IRS reporting information for each individual who is provided with this coverage. Related statements must also be provided to individuals. This reporting requirement is found in Code section 6055.
25 2015 Health Care Reform Reporting of Coverage Both of these reporting requirements become effective in The first returns will be due in 2016 for health plan coverage provided in The section 6055 and 6056 returns must be filed with the IRS by Feb. 28 (or March 31, if filed electronically) of the year after the calendar year to which the returns relate. Written statements must be provided to employees no later than Jan. 31 of the year following the calendar year in which coverage was provided. ALEs with self-funded plans will be required to comply with both reporting obligations, while ALEs with insured plans will only need to comply with section To simplify the reporting process, the IRS will allow ALEs with self-insured plans to use a single combined form for reporting the information required under both section 6055 and 6056.
26 Reporting of Coverage To Do: Prepare for Health Plan Reporting: Determine which reporting requirements apply to you and your health plans. Start analyzing the information you will need for reporting and coordinate internal and external resources to help track the required data.
27 2015 Health Care Reform WE RE HERE TO HELP
28 Wells Insurance Your Health Care Reform Partner
29 Wells Insurance Health Care Reform Legislative Updates Be the first to know when regulations change our timely legislative documents are written and reviewed by lawyers to ensure accuracy. New Options for Individuals Whose Policies Have Been Cancelled Proposed Expansion of Excepted Benefits Reinsurance Program Changes for 2015
30 Wells Insurance Employee Education Materials Our educational documents for employees are easy to understand, and include everything from flyers to payroll stuffers to help keep your employees up to date. Health Care Reform: General Questions & Answers for Employees Health Care Reform: The Who, What and When Health Care Reform: Marketplace Health Plan Categories
31 Wells Insurance Health Care Reform Video Content Our short, to-the-point videos detail health care reform and the changes it brings. With videos for you, and videos for your employees, we ll talk you through it all. Health Care Reform: W-2 Reporting Requirements Health Care Reform: Summary of Benefits and Coverage Health Care Reform: Patient s Bill of Rights Health Care Reform: Age 26 Rule
32 Wells Insurance Health Care Reform Penalty Tools The employer shared responsibility penalties are just around the corner. Are you prepared? We can estimate the potential cost of the shared responsibility penalties and help you avoid them.
33 Wells Insurance Community Forum You don t need a big HR department to connect with other professionals to discuss questions and concerns that s what our Community forum is for.
34 Wells Insurance Questions? Thanks for your attention. Please contact us with any questions or to learn more about what we offer. Wells Insurance One North Third Street Wilmington, NC
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