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									                               Health Care Reform Update
                                           Florence Unified School District
                                                  Governing Board
                                                                       July 11, 2012


Florence/2013/Meetings/07112 Board meeting/12 board ppaca overview 0711.ppt
           Supreme Court Decision



 Affirmed PPACA
 Future: Debate, Elections in
  November
 Further Legal Challenges Possible
 So, Onward and Upward
                        Upcoming PPACA Issues

 2013: 2012 W-2 to contain
  Aggregate Health Benefit Cost
  Information
 Open Enrollment (7/1/2013):
  Summary of Benefits and
  Coverage (SOBC)
  – 4 Pages Maximum
  – Specific Information
  – $1000 Penalty for non compliance
      Upcoming PPACA Issues

 2014 Reporting Requirements
  – Minimum Essential Benefits
  – Qualifying and Affordable
    Coverage
 Penalty for non compliance:
  – $50 for each missed employee;
    $100,000 maximum
                         Upcoming PPACA Issues


 2018: Cadillac Tax

 40% Excise Tax on Value
  of Benefits in excess of
  – $10,200 Individual
  – $27,500 Family
                               Upcoming PPACA Issues

 State Exchange to be “up and
  running” as of 2014

 Deductible limits of $2,000 individual
  and $4,000 family, unless
  contributions are offered that offset
  excess deductibles.

 Maximum out of pocket: $5,950
  Individual; $11,900 Family
                                    Upcoming PPACA Issues

Plans to be offered through the State Exchange:

 • Bronze Plan       Provides 60% of actuarial value of minimum qualifying
                     coverage.

 • Silver Plan       Provides 70% of actuarial value of minimum
                     qualifying coverage.

 • Gold Plan         Provides 80% of actuarial value of minimum
                     qualifying coverage.

 • Platinum Plan     Provides 90% of actuarial value of minimum qualifying
                     coverage.

 • A catastrophic only policy would be available for those 30
 and younger.
                                      Upcoming PPACA Issues

 Individual Mandate to Purchase Health
  Insurance

 If employer does not offer “affordable
  and qualifying” coverage:

   – Penalty for non compliance (or “tax” as
     SCOTUS has interpreted)


 Possible subsidy depending upon
  income
       Helping Employees Prepare for Health Care Reform Legislation
                 (Individual Refusal to Purchase Coverage)
                                Penalty Table


Household Income    2014 Penalty        2015 Penalty        2016 Penalty

    $10,830            $108.30             $325.00             $695.00

    $21,660            $216.60             $433.20             $695.00

    $32,490            $324.90             $694.80             $812.25

    $43,320            $433.20             $866.40            $1,083.00

    $55,125            $551.25            $1,102.50           $1,378.13

    $66,150            $661.50            $1,323.00           $1,653.75

    $77,175            $771.75            $1,543.50           $1,929.38

    $88,200            $882.00            $1,764.00           $2,205.00
                                Upcoming PPACA Issues

 Employer Mandate:

 Don’t have to offer, but…..

   – Penalty “if you don’t”

   – Penalty possible “if you do”

       • If coverage is not “qualifying or
         affordable”
             “Qualified and Affordable Plans” and Penalties
                      Effective
     TOPIC           Date of the                    Description of the Change
                       Change
                                     Mandates only apply to employers with an average of at
                                       least 50 full-time employees during the preceding
                                                          calendar year.

                                      Penalties assessed if employer coverage is considered
Employer Penalty
                     January 1st,      “unaffordable”; employee contributions to the plan
  for Offering
                        2014         must not exceed 9.5% of employee’s household income
 Coverage that’s
                                     or if the plan is not “qualifying” – has an actuarial value
not “Qualifying”
                                         of less than 60% of covered health care expenses.
and “Affordable”
                                      Penalty: $3,000 per full time employee who receives a
                                        subsidy through an insurance Exchange; capped at
                                         $2,000 X total # of FTEs with 1st 30 FTEs excluded.


                                                  Maximum                          Maximum
                                                                   Family of 4
  % of FPL         Max. %                          Single                          Family of 4
                               Single Income                         Income
                                                  Premium                           Premium
  400%             9.50%            $43,320       $342.95          $88,200          $698.25
  Determination and Potential Application of Employer
         Penalty for Categories of Employees
                                                                Once an employer is deemed to be a “large
                     How is this category of employee used to   employer” could the employer be subject
 Employee Category
                           determine “large employer”              to a penalty if this type of employee
                                                                        received a premium credit?


                     Counted as one employee, based
   Full - time                                                                    Yes
                     on a 30 hour or more work week

                       Prorated (calculated by taking
                      the hours worked by part-time
   Part – time                                                                    No
                     employees in a month divided by
                                    120)

                     Not counted, for those working                Yes, for the month in which a
    Seasonal
                      less than 120 days in a year                  seasonal worker is full-time

                      Generally, counted as working
                         for the temporary agency               Yes, for those counted as working
Temporary Agency
                      (except for those workers who                 for the temporary agency
                       are independent contractors)
Summary of Potential Employer Penalties under PPACA, Cong. Research Service
  May 14, 2010
                                                    PPACA Modeling
   Recommending a Customized Impact Study to
    quantify effect of PPACA in 2014
   Modeling Scenario:
      Actual employee and employer
        contributions
      US census data
      To project cost impact and employee
        migration due to PPACA
   Report generated based upon:
      No change to current benefit plans in 2014
      Termination of group medical plan in 2014
      Employer sponsors only a 60% actuarial
        value plan in 2014
Questions

								
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