navigating health reform

Health Care Reform Challenges #1 2000 pages of legislation 100,000 pages of rules

Repeal will be challenging

Funding will be a problem

How to pay for it? Is it enough? Navigating Health Reform 2010

Matthew Byrne (614) 336-3636, www.MyHealthQuoter.com

0.9% Additional Medicare tax on earned income (2013) Due on earned income in excess of $200K for single taxpayer or $250K for

married filing jointly or $125K married filing separately.

3.8% Medicare tax on unearned income (2013) Due on un-earned income on individual taxpayers with a modified

adjusted gross income of in excess of $200K for single taxpayer or $250K for married filing jointly or $125K married filing separately. Consult your tax professional

Tanning tax 10% (2010) Annual Pharma fee (2011 ) begins in at 2.5Billion ($27B) Annual Medical Device fee (2012) 2.3% of sales ($20B) Annual Insurer fee (2014) ($60B) Cadillac Tax, (2018) 40% excise, ($32B)

EMPLOYER SPONSORED COVERAGE Navigating Health Reform 2010


Employers are NOT required to offer coverage BUT employers who choose not to offer coverage

will pay a penalty starting in 2014 Penalty applied to employers with 50 or more

FTEs (30hrs/wk) Penalty is $2000-3000 per employee, per year. Applied to employee count over 30 (exempt

on the 1st 30 FTEs)

Employer Mandate (2014)

• Employer plans must be at least 60% actuarial value

• Employer plan must

cost less than 9.5% of income.

Individual Mandate (2014) Navigating Health Reform 2010


If you work for an employer who has OVER 50+ employees who chooses to pay the penalty and not offer coverage

If you work for an employer who has UNDER 50 employees (no penalty) and does not offer coverage Individual Penalty = $695 per year in 2014 and phases to 2.5% of

taxable income.

Subsidies will be available for up to 400% of the poverty level (88,000/yr for a family of four) Medicaid expanded to 133% FLF in all states.

Exchanges

All U.S. citizens and legal resident are required to have coverage. You must comply with the individual mandate if. . .

Grandfathering Navigating Health Reform 2010


Grandfathering allows groups and individual members with an existing plan prior to 03/23/2010 to be exempt from the new product requirements effective in 2014 and most of the 09/23/2010 requirements. To maintain grandfathered status, a client must continue to keep the plan and the plan’s benefits “essentially” the same. Examples;

Reductions of benefits or increases to out of pocket spending (higher deducible and co-pays)

Grandfathering Navigating Health Reform 2010


• Plans issued prior to March 23, 2010 • No significant changes to benefits

(deductibles + co pays) Grandfathered

• Plans started/modified after 03/23 but before 09/23

Exempt until next renewal

• Plan started or significantly modified after September 23, 2010.

Not Grandfathered

High Risk Pool Navigating Health Reform 2010


Must be with out coverage for 6 months

Must have been declined for coverage by 2 carriers

Available Sept 1,2010

I’m told, 2000 spots available (perhaps more in future)

Dependent Coverage Navigating Health Reform 2010


Expanded to 26 (28 for Ohio) Only if no other coverage is available

Most dependent s will be eligible for addition to their employer plan starting at their next open enrollment. Additions are made regardless of student or marital status. Additions need NOT be a dependent based on IRS definition. Child may be married and still be added

Spouse cannot be added (but could be added to her parents plan).

Employer not required to pay for dependent

Health Savings Account Changes Navigating Health Reform 2010


OTC are not considered a qualified medical expense starting in 2011.

Penalty for early withdraw jumps from 10% to 20%

FSA contributions are limited at 2500/year.

What is a Health Savings Account?

A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). Similar to an IRA, the money you deposit in an HSA is tax-free. You don't pay taxes on qualified withdrawals, either. In effect, it's like getting extra money from the government to pay for health-care.

Exchanges (2014) Navigating Health Reform 2010


Online shopping for people utilizing any federal subsidy or

incentives. Small Health Insurance Tax Credit (50% in 2014) Medicaid Subsidies (400 FPL)

Plans may be packaged based on actuarial value 60% (Bronze) 70% (Silver) 80% (Gold) 90% (Platinum)

Likely another sales channel for subsidy takers, facilitated and navigated with the help of licensed brokers.

Changes September 23, 2010 Navigating Health Reform 2010


No pre-existing conditions under 19 years old Dependent coverage to 26 (if no other coverage is

available). Ohio law expands this to 28

No lifetime limits on essential benefits Restricts annual limits on essential benefits No rescission (except for fraud) Participant may choose PCP No pre-authorization for OB/GYN ER covered in and out of network No cost sharing on preventive

Changes in 2011 Navigating Health Reform 2010


2011 Medicare Advantage cuts begin

2011 No longer allowed to use FSA, HSA, HRA, Archer MSA distributions for over-the counter medicines

Americans begin paying premiums for federal long-term care insurance (CLASS Act) (Abandoned)

Health plans required to spend a minimum of 80% of premiums on medical claims

Penalties for non-qualified HSA and Archer MSA distributions double (to 20%)

Employers required to report value of health benefits on W-2 (postponed to 2012)

2014 Navigating Health Reform 2010


All health products will be guarantee issue

No health status rating; ratings limited to Age 3:1 Tobacco 1:5:1 Family Size Geography

Health Insurance products must exhibit at least 60% “actuarial value”

Employer mandate (Play or Pay)

Individual mandate (Play or Pay)

Larger Group Reform Areas of Interest

Value of employer-sponsored coverage on W-2s for 2012 tax year – meaning W-2s issued in January 2013 (originally required earlier, but the IRS delayed the requirement until the 2012 tax year for large employers and the 2013 tax year for employers who issue fewer than 250 W-2s)

Uniform coverage summaries/60-day notice for material modifications

Employee notification of exchanges and premium subsidies

Maintaining Coverage Navigating Health Reform 2010


INDIVIDUAL

COBRA

HIPPA CONVERSION

OPEN ENROLLMENT

HIGH RISK POOL

MEDICARE

GROUP

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Learn more at www.copeceducation.org

navigating health reform

Documents

coverage individual

matthew byrne

employer plans

b employer sponsored

health care reform challenges

individual mandate

unearned income

married filing