AFFORDABLE CARE ACT
WHAT IT MEANS FOR YOU
New York City Bar Association Presentation
February, 2014
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Today’s Speakers
Frank W. Blackwell, Relationship Manager, Mercer Consumer
Frank has worked with thousands of individuals and businesses on their life, health and disability
insurance plans. His Association experience includes member and member firms of the State Bar of
California, the California Medical Association, the California Pharmacists Association, the California
Optometric Association and now the New York City Bar Association.
Michelle Black, Sr. Associate, Client Services Manager, Mercer Consumer
Michelle brings over 20 years of insurance management experience to her role of administering the
Sponsored Life, Health, and Disability Insurance Programs of the New York City Bar Association, the
State Bar of California, the New York County Medical Society, the California Medical Association, the
California Pharmacists Association, and the California Optometric Association. .
Gregory Trotta, Account Executive, Empire Blue Cross Blue Shield
Gregory manages relationships with key national brokerages and general agents. He consults on various
aspects of the healthcare industry including: underwriting and participation requirements; corporate,
administrative and clinical policies, and healthcare reform.
Gregory earned his juris doctorate degree from Villanova University School of Law
Nicholas Hellmuth, Small Business Account Consultant, United Healthcare
Nick is a small business sales representative for UnitedHealthcare in NY. He manages relationships with
brokers and General Agents on a local and national level assisting with the sale, service and retention of
accounts .Nick graduated from The Villanova University School of Business and is licensed in Accident,
Life, and Health insurance in the state of NY.
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ACA - What It Means For You
Agenda
Discussion Topics for Today
1
Individual Mandate
2
Tax Credits
3
New York State of Health – Individual and Small Business (SHOP)
4
Sponsored Plans of the Bar
5
Oxford and Empire Blue Cross Blue Shield
6
Questions
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1
ACA What It Means For You
Individual Mandate
ACA - What It Means For You
Individual Mandate
Everyone has to have
Minimum Essential Coverage
By April 1, 2014
Or
Pay a Penalty
Failure to Pay Penalty
Taxpayers who are required to pay a penalty but fail to do so will receive a notice from Internal
Revenue Service (IRS) stating that they owe the penalty. If they still do not pay the penalty, the
IRS can attempt to collect the funds by reducing the amount of their tax refund in the future.
However, individuals who fail to pay the penalty will not be subject to any criminal prosecution
or penalty for such failure. (Congressional Research Service 7-5700)
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ACA - What It Means For You
Individual Mandate
Minimum Essential Coverage
Coverage Under a Government-Sponsored Plan including:
Medicare Part A
Medicare Advantage Plans
Medicaid
State Children’s Health Insurance Program (CHIP)
TRICARE and the TRICARE for Life program
Department of Veterans Affairs (VA) Health Care Program
Peace Corps Program
Employer-Sponsored Plans with respect to any employee including:
Coverage offered by an employer which is a government plan.
Any other plan or coverage offered in the small or large group market.
Any plan established by an Indian Tribal government.
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ACA - What It Means For You
Individual Mandate
Minimum Essential Coverage (continued)
Plans in the Individual Market
Grandfathered Health Plans
Self-funded Student Health Plans
Refugee Medical Assistance
supported by the Administration for Children and Families
State Health Benefits Risk Pool
Any other coverage the HHS Secretary recognizes as meeting the
requirements outlined in 45 CFR §156.604.
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ACA - What It Means For You
Individual Mandate
Minimum Essential Coverage
must include
Essential Benefits:
Emergency Services
Hospitalization
Maternity and Newborn Care
Mental Health/Substance Abuse Treatments
Prescription Drugs
Rehabilitative Services
Laboratory Services
Preventive/Wellness Services
Pediatric Dental and Vision
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7
ACA - What It Means For You
Individual Mandate
PENALTY
The penalty will be calculated as the greater of either:
A percentage of the “applicable income,” defined as the amount by which an
individual’s household income exceeds the applicable filing threshold for the
applicable tax year. The filing threshold comprises the personal exemption
amount plus the standard deduction amount.
The percentage will be: 1.0% in 2014, 2.0% in 2015, and 2.5% thereafter
OR
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ACA - What It Means For You
Individual Mandate
PENALTY (continued)
A flat dollar amount assessed on each taxpayer and any dependents
$ 95 in 2014
$325 in 2015
$695 in 2016 and beyond (adjusted for inflation)
The amount is reduced by one-half for dependents under the age of 18.
The total family penalty is capped at 300% of the annual flat dollar amount.
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ACA - What It Means For You
Individual Mandate
Exemptions From Tax Penalty
Religious (1402(g)(1) of the Internal Revenue Code of 1986)
Undocumented / Not a Citizen
Incarcerated
Cannot afford to purchase (e.g. contribution exceeds 8% of income)
Gap in coverage of less than 3 months
Native Americans
Income below tax filing thresholds
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2
ACA What It Means For You
Tax Credits
ACA - What It Means For You
Tax Credits
Tax Credits = Financial Support through the New York State of Health
Individuals and Families
Subsidies (premium credits)
Taxpayers with incomes between 138% and 400%
of the Federal Poverty Level
Sliding scale of tax credits paid directly to insurers
to help pay for the insurance
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ACA - What It Means For You
Tax Credits
Tax Credits = Financial Support through the New York State of Health
Individual and Families
Credit calculation based on the second lowest cost silver plan offered,
but the dollar amount is applied to all available plans
Available for Household incomes between 138% and 400% of the
federal poverty level (FPL)
(max: $45,960 for individuals and up to $94,200 for a family of 4)
May apply for some or all of the credit at time of application
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ACA - What It Means For You
Tax Credits
Individual and family eligibility
Must not have access to Affordable and Minimum Essential Coverage
through an employer
Affordable is defined as employee contribution towards employer health
plan costing less than 9.5% of the employee’s wages from that employer
Somewhat discriminatory against dependents not subsidized by employer
plans
Must be a U.S. citizen or a legal resident
Subsidy Estimator
NYStateOfHealth.NY.gov/PremiumEstimator
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ACA - What It Means For You
Tax Credits
Federal Poverty Levels
Persons in
Family/Household
Poverty Guideline
1
$11,670
2
15,730
3
19,790
4
23,850
5
27,910
6
31,970
7
36,030
8
40,090
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ACA - What It Means For You
Tax Credits
• Premium required to pay cannot exceed these amounts
Income Level
Premium as a % of income
130% - 150% FPL
3% - 4%
150% -200% FPL
4% - 6.3%
200% - 250% FPL
6.3% - 8.05%
250% - 300% FPL
8.05% - 9.5%
300% - 400% FPL
9.50%
For example:
• Married couple with 2 children earning $47,100 annually (200% FPL)
• Annual premium for second lowest cost silver plan is $10,000 annually
• Tax credit equals $10,000 minus $2,968 (6.3% of $47,100)
$7,032 premium tax credit
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$2,968 premium payment
ACA - What It Means For You
Tax Credits
Employer Tax Credit - 2014
Partial Credit available to Small Business with 50 lives and under who:
– Provide at least 50% of the cost of health care coverage
– Employ less than 25 full-time employees (excludes business owners and family
members)
– Paying annual wages averaging less than $50,000 per FT employee
Maximum Credit for tax years 2014 and beyond:
– For employers with ten or fewer full-time employees and average annual wages
below $25,000
- For Profit - 50% of Employer contribution for employees
- Tax-Exempt - 35% of Employer contribution for employees
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ACA - What It Means For You
Tax Credits
Employer Tax Credit – 2014
From the IRS questions and answers about the Credit…
Q. Who is an employee for purposes of determining FTEs and average
annual wages?
The following individuals are not considered employees
for purposes of the credit:
- Owners of the small business; such as sole proprietors, partners,
shareholders owning more than 2% of an S Corporation or more than 5%
of a C Corporation
- Spouses of these owners; and family members of these owners, which
include a child, grandchild, sibling or step-sibling, parent or ancestor of a
parent, a step-parent, niece or nephew, aunt or uncle, son-in-law or
daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-inlaw. A spouse of any of these family members should also not be counted
as an employee.
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3
ACA What It Means For You
New York State of Health exchange
ACA - What It Means For You
New York State of Health
Benchmark New York Plan:
Oxford EPO small group plan
Platinum
Added missing Essential Benefits
Became the basis to establish actuarial
value
Exchange Goals:
Gold
Cover many of the 2.7M uninsured
under 65 (16%)
Silver
• Plan pays 90%
• Enrollee pays 10%
• Plan pays 80%
• Enrollee pays 20%
• Plan pays 70%
• Enrollee pays 30%
Create a platform where plan benefits
could be more easily compared
Bronze
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• Plan pays 60%
• Enrollee pays 40%
20
ACA - What It Means For You
New York State of Health
Small Business Health Options Program
SHOP tax credits available to firms that:
Employ fewer than 25 full-time employees
(excludes business owners and family
members)
Pay annual wages averaging less than $50,000
per full-time employee
Platinum
• Plan pays 80%
• Enrollee pays 20%
Gold
Maximum credit for tax years 2014 and beyond:
For employers with ten or less full-time
employees and averages annual wages below
$25,000
For Profit — 50% of ER contribution
Tax-Exempt — 35% of ER contrib
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• Plan pays 90%
• Enrollee pays 10%
• Plan pays 70%
• Enrollee pays 30%
Silver
Bronze
• Plan pays 60%
• Enrollee pays 40%
21
ACA - What It Means For You
New York State of Health
Type of Service
Platinum
Gold
Silver
Deductible
$0 $
600 $
2,000
Max. OOP
$
2,000 $
4,000 $
5,500
Cost Sharing
Inpatient Hosp, SNF, Hospice
$500 per adm. $1,000 per adm. $1,500 per adm.
Outpatient Facility -surgery
$100
$100
$100
Surgeon
$100
$100
$100
PCP
$15
$25
$30
Specialist
$35
$40
$50
Prescription Drugs
$10/$30/$60
$10/$35/$70
$10/$35/$70
Mail order (90 day supply)
2.5 times
2.5 times
2.5 times
Rehab & Hab Therapy
$25
$30
$30
ER
$100
$150
$150
Ambulance
$100
$150
$150
Urgent Care
$55
$60
$70
DME /Med Supplies
10% co-ins
20% co-ins
30% co-ins
Eyewear, Hearing Aids
10% co-ins
20% co-ins
30% co-ins
Pre-adm testing
0% copay
0% copay
0% copay
Diag, x-ray, Imaging, lab
$35
$40
$50
Chemo, radiation,
$15
$25
$30
Mental Health
$15
$25
$30
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Bronze
$
$
Catastrophic
3,000 $
6,350 $
50% co-ins
50% co-ins
50% co-ins
50% co-ins
50% co-ins
$10/$35/$70
2.5 times
50% co-ins
50% co-ins
50% co-ins
50% co-ins
50% co-ins
50% co-ins
50% co-ins
50% co-ins
50% co-ins
50% co-ins
6,350
6,350
0% co-ins
0% co-ins
0% co-ins
0% co-ins
0% co-ins
0% co-ins
na
0% co-ins
0% co-ins
0% co-ins
0% co-ins
0% co-ins
0% co-ins
0% co-ins
0% co-ins
0% co-ins
0% co-ins
ACA - What It Means For You
New York State of Health
SHOP Exchange
MetroPlus Health Plan
Bronze, Silver, Gold, Platinum
1 HMO plan at each level
Health Republic
Bronze (2), Silver (3), Gold (2), Platinum (2)
EPO Plans
Oxford
Bronze (1 EPO plan)
Silver (2: EPO,PPO plans)
Gold (1 EPO plan)
Platinum (2: EPO,PPO)
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ACA - What It Means For You
New York State of Health
Category
Number of adults
Children ages 19-25
Children under 19
Family Type
Annual taxable income
Percent of FPL
Estimated Subsidy
Subsidized Premium
Affinity
Emblem
Empire
Fidelis
Health Republic
Health First
Metro Plus
Oscar
United
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Example 4
2
1
1
Ind w Fam
$
95,000
Exceeds 400%
$
-
For Adults
$
1,259.16
$
1,098.13
$
1,250.72
$
1,111.93
$
1,104.15
$
1,254.00
$
1,023.89
$
1,195.32
$
1,830.93
For Children
under 19
Total Cost
Full Cost
$ 1,259.16
Full Cost
$ 1,098.13
Full Cost
$ 1,250.72
Full Cost
$ 1,111.93
Full Cost
$ 1,104.15
Full Cost
$ 1,254.00
Full Cost
$ 1,023.89
Full Cost
$ 1,195.32
Full Cost
$ 1,830.93
ACA - What It Means For You
New York State of Health
Category
Number of adults
Children ages 19-25
Children under 19
Family Type
Annual taxable income
Percent of FPL
Estimated Subsidy
Subsidized Premium
Affinity
Emblem
Empire
Fidelis
Health Republic
Health First
Metro Plus
Oscar
United
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Example 3
2
1
1
Ind W Family
50,000
$
322%
645.21
$
For Adults
613.94
$
452.92
$
605.51
$
466.71
$
458.93
$
608.79
$
378.68
$
550.10
$
$ 1,185.71
For Children
under 19
45.00
$
45.00
$
45.00
$
45.00
$
45.00
$
45.00
$
45.00
$
45.00
$
45.00
$
Total Cost
658.94
$
497.92
$
650.51
$
511.71
$
503.93
$
653.79
$
423.68
$
595.10
$
$ 1,230.71
ACA - What It Means For You
New York State Of Health Exchange
Sole Proprietors
Consistent with federal requirements, sole proprietors will purchase coverage
through the Individual Exchange. There are nearly 1.1 million sole proprietors in
the State of New York, of which 23% are uninsured and 14% are insured in the
nongroup market (Artifact 6.1.6). Twenty-three percent of sole proprietors have
income below 139% of FPL and 34% of sole proprietors have incomes between
139-399% of FPL and would be income-eligible for Insurance Affordability
Programs when available in 2014. Consequently, the Individual Exchange will
enable these sole proprietors to access affordable, comprehensive health
insurance.
Blueprint Summary for Section 6.0 SHOP, NY.Gov
October 26, 2012
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4
ACA What It Means For You
City Bar Sponsored Health Plans
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