Healthcare Plan Design in
the Era of PPACA
Robert Crisan, Senior Vice President of Health Care
Reform and Strategic Growth, Hylant Group, Inc.
Strategies
First a Look at Affordability
Affordable Care Act
Employee Benefits
Let’s Look At Affordability
• In 2011, the Median Household
Income was $50,502
• In 2013, the average annual total
cost of employer-sponsored family
coverage was $16,351, and the
share of the premium paid by
workers was 29%. Between 2003
and 2013, premiums have
increased by 80%.5
Kaiser Family Foundation and Health Research and Educational Trust, 2013.
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Where Does All the Money Go?
Annual Income
$50,502
$40,000
Monthly Income
$4,209
$3,333
Less
Federal & State Taxes (20% - 15%)
$842
$500
Less
Rent/Home
$800
$600
Less
Gas (50 gallons per month x $3.50)
$175
$175
Less
Car plus Insurance
$300
$200
Less
Food ($3 per person, 3 meals per day, 4 in household)
$1,080
$1,080
Less
Utilities
$200
$200
Less
Cell Phone
$100
$100
Discretionary Income before Health Insurance
$712
$478
Less
Health Insurance (29% of Family Coverage)
$395
$395
=
Discretionary Income after Health Insurance
$317
$83
=
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Employee Benefits
Affordable Care Act
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Employee Benefits
Affordable Care Act
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Employee Benefits
Affordable Care Act
Employee Benefits
Affordability
Monthly Contributions
Single
$
109.00
Two Person
$
200.00
Family
$
300.00
Annual Pay
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
$70,000
$75,000
$80,000
$85,000
$90,000
$100,000
Contributions As % of Income
Single
2 Person
Family
8.72%
6.54%
5.23%
4.36%
3.74%
3.27%
2.91%
2.62%
2.38%
2.18%
2.01%
1.87%
1.74%
1.64%
1.54%
1.45%
1.31%
16.00%
12.00%
9.60%
8.00%
6.86%
6.00%
5.33%
4.80%
4.36%
4.00%
3.69%
3.43%
3.20%
3.00%
2.82%
2.67%
2.40%
24.00%
18.00%
14.40%
12.00%
10.29%
9.00%
8.00%
7.20%
6.55%
6.00%
5.54%
5.14%
4.80%
4.50%
4.24%
4.00%
3.60%
Current Deductibles
$1,000
$2,000
Single
2 Person/Family
6.67%
5.00%
4.00%
3.33%
2.86%
2.50%
2.22%
2.00%
1.82%
1.67%
1.54%
1.43%
1.33%
1.25%
1.18%
1.11%
1.00%
13.33%
10.00%
8.00%
6.67%
5.71%
5.00%
4.44%
4.00%
3.64%
3.33%
3.08%
2.86%
2.67%
2.50%
2.35%
2.22%
2.00%
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Current Plan Max Coinsurance
Limit Including Additional Copays
$2,000
$3,000
Single
2 Person/Family
13.33%
10.00%
8.00%
6.67%
5.71%
5.00%
4.44%
4.00%
3.64%
3.33%
3.08%
2.86%
2.67%
2.50%
2.35%
2.22%
2.00%
20.00%
15.00%
12.00%
10.00%
8.57%
7.50%
6.67%
6.00%
5.45%
5.00%
4.62%
4.29%
4.00%
3.75%
3.53%
3.33%
3.00%
Total Worse CasePlan OOP and
Contributions
Single
2 Person
Family
28.72%
21.54%
17.23%
14.36%
12.31%
10.77%
9.57%
8.62%
7.83%
7.18%
6.63%
6.15%
5.74%
5.39%
5.07%
4.79%
4.31%
49.33%
37.00%
29.60%
24.67%
21.14%
18.50%
16.44%
14.80%
13.45%
12.33%
11.38%
10.57%
9.87%
9.25%
8.71%
8.22%
7.40%
57.33%
43.00%
34.40%
28.67%
24.57%
21.50%
19.11%
17.20%
15.64%
14.33%
13.23%
12.29%
11.47%
10.75%
10.12%
9.56%
8.60%
Affordable Care Act
Employee Benefits
Percentage of employees who strongly agree, “I am looking to my employer for
more help in achieving financial security through employee benefits.”
Older Boomers
39%
55%
Younger Boomers
42%
60%
Gen X (1965-1979)
53%
55%
Gen Y (1980-2000)
61%
64%
Total Employees
Source: MetLife – 12th Annual U.S. Employees
Benefit Trends Study
50%
2012
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
58%
2013
Basic Employer Advantage
Affordable Care Act
Employee Benefits
Important Components of Employer Provided Coverage
• Employer Subsidy is not taxed
• Employee Portion is pre-tax
• Tax Deductible to Employer
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
ER vs. EE Comparison of Cost “Pay” Scenario
Employee Average Wage
$46,000.00
ER-Sponsored
Exchange
Gross Annual Cost, Single Coverage
$5,615.00
$5,615.00
ER Cost Share
$4,664.00
$2,000.00
($1,399.20)
NA
$951.00
$5,615.00
($266.28)
($284.20)
Estimated Employer Net Cost
$3,264.80
$2,000.00
Estimated Employee Net Cost
$684.72
$5,330.80
Estimated ER Tax Deduction (30%)
EE Cost Share
Estimated EE Tax Savings @ 28%
(S125 vs. Tax Deduction over 10%)
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Drop Coverage
Affordable Care Act
Employee Benefits
Drop Coverage
•
In most cases, when we add both $2,000 penalty and consider the employee out-ofpocket it is not a financially feasible or an employee friendly decision, UNLESS you
are:
•
Small employer (Under 50 – inc. FTE)
– Lower average wages
– Higher out-of-pocket
– Higher contributions
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Skinny Plans
Affordable Care Act
Employee Benefits
“Skinny” Plans
•
New concept, generally providing only preventive care and mandated benefits
(clinical trials)
•
Current definition of MEC includes skinny plans
– Relatively simple to qualify as affordable as cost is very low
– Questionable on whether such a plan provides minimum value
• Conflicting language in the proposed regs
•
This was not the intent of the law
•
If this is your “Plan A,” make sure you have a “Plan B” to fall back on!!
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
“Skinny” Plans
•
Currently…
– Avoids Penalty A - $2,000
– Helps individual avoid Individual Mandate if they are covered by the plan
– Can be completely voluntary (100% paid by the employee)
– Disagreement on avoiding the Penalty B - $3,000
•
No Annual and Lifetime Maximum, First Dollar
•
Ideal Industries – staffing, restaurant, home healthcare, hotels, retail, industry with
low wages
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
“Skinny” Plans – Sample Rates
Family Status
Monthly Rate
EE
$44.97
EE + Child
$68.94
EE + Spouse + Child
$129.70
Family
$153.69
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Do “Skinny” Plans Meet Minimum Value?
Affordable Care Act – the Law
Passed by Congress, Signed by Obama
ACA Regulations on various aspects
Issued by HHS, DOL, DOT
MV defined as % of
covered expenses
paid by plan
MV defined as % of
covered expenses
paid by plan
Must use CMS MV
calculator to
determine %
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Unaffordable or Non-MV
Affordable Care Act
Employee Benefits
Offer Unaffordable/non-MV Coverage
•
It may be the path of least resistance to offer either unaffordable or non-MV coverage
•
Think real affordability
•
Different participation assumptions for MV or Affordable
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Unaffordable/non-MV – For a group with all covered
Single
Coverage
Monthly Rate
Employer
Subsidy
Employer
Tax Rate
Net Cost to Employer
Monthly/Annual
Penalty B
$500
$415
30%
$290.50/$3,486
$250/$3,000
An unaffordable plan may cost employer less!
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Examples
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Employee Benefits
Monthly
$
$
$
$
EE
EE/SP
EE/child(ren)
Family
Contribs
85.02
205.01
190.02
224.99
$
$
$
$
Monthly Rate
500.00
1,250.00
1,100.00
1,500.00
% Contribs
17%
16%
17%
15%
Affordable Care Act
$
$
$
$
$
$
$
$
$
$
Income
39,726.00
57,429.00
28,536.00
24,000.00
23,897.00
26,500.00
24,000.00
36,089.00
68,977.00
60,000.00
$ 59,285.00
$
$
$
$
$
$
$
$
23,000.00
26,648.00
20,784.00
37,110.00
19,339.00
20,496.00
20,695.00
21,000.00
$ 26,745.00
$
$
$
20,285.00
22,000.00
41,000.00
$
Avg. Income
33,167.43
Employee
Benefits
18%
People Covered
2
3
1
1
1
2
2
2
1
2
$
$
$
$
$
$
$
$
$
$
Rate
1,199.93
1,463.56
261.54
558.38
325.87
520.98
699.61
784.24
562.39
1,569.22
$
$
$
$
$
$
$
$
$
$
1 $ 642.49 $
1
2
1
3
1
1
1
1
$
$
$
$
$
$
$
$
605.95
519.23
510.47
895.04
274.81
382.38
584.37
488.85
$
$
$
$
$
$
$
$
4 $ 942.66 $
2 $
1 $
$
1,518.55 $
297.52 $
955.80 $
Subsidy
833.25
961.74
61.57
405.02
169.24
391.73
538.32
409.75
921.66
462.13
367.32
376.47
680.50
186.35
261.71
404.11
373.95
$
$
$
$
$
$
$
$
$
$
Monthly Cost
366.68
501.82
199.97
153.36
156.63
129.25
161.29
374.49
562.39
647.56
$
$
$
$
$
$
$
$
$
942.66
1,257.64
165.84 $
831.54 $
$
26,515.96 $
17,793.35
Total Premium Total Gov't Subsidy
Exchange
67%
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Current Contribs
$
205.01
$
224.99
$
85.02
$
85.02
$
85.02
$
190.02
$
85.02
$
205.01
$
85.02
$
205.01
642.49 $
143.82
151.91
134.00
214.54
88.46
120.67
180.26
114.90
$
$
$
$
$
$
$
$
0 $
260.91 $
131.68 $
124.26 $
$
$
$
$
$
$
$
$
$
$
85.02 $
85.02
190.02
85.02
190.02
85.02
85.02
85.02
85.02
$
$
$
$
$
$
$
$
224.99 $
Pre-tax
168.11
184.49
69.72
69.72
69.72
155.81
69.72
168.11
69.72
168.11
$
$
$
$
$
$
$
$
$
$
69.72 $
69.72
155.81
69.72
155.81
69.72
69.72
69.72
69.72
$
$
$
$
$
$
$
$
184.49 $
205.01 $
85.02 $
224.99 $
168.11 $
69.72 $
184.49 $
$
4,071.73 $
Total EE Contribs
Monthly Difference
198.57
317.33
130.25
83.64
86.91
(26.56)
91.57
206.38
492.67
479.45
572.77
74.10
(3.90)
64.28
58.73
18.74
50.95
110.54
45.18
(184.49)
92.80
61.96
(60.23)
4,650.88
14%
Total Share Exchange
Monthly
$
$
$
$
EE
EE/SP
EE/child(ren)
Family
Contribs
250.00
625.00
550.00
750.00
$
$
$
$
Monthly Rate
500.00
1,250.00
1,100.00
1,500.00
% Contribs
50%
50%
50%
50%
Affordable Care Act
$
$
$
$
$
$
$
$
$
$
Income
39,726.00
57,429.00
28,536.00
24,000.00
23,897.00
26,500.00
24,000.00
36,089.00
68,977.00
60,000.00
$ 59,285.00
$
$
$
$
$
$
$
$
23,000.00
26,648.00
20,784.00
37,110.00
19,339.00
20,496.00
20,695.00
21,000.00
$ 26,745.00
$
$
$
20,285.00
22,000.00
41,000.00
$
Avg. Income
33,167.43
Employee
Benefits
18%
People Covered
2
3
1
1
1
2
2
2
1
2
$
$
$
$
$
$
$
$
$
$
Rate
1,199.93
1,463.56
261.54
558.38
325.87
520.98
699.61
784.24
562.39
1,569.22
$
$
$
$
$
$
$
$
$
$
1 $ 642.49 $
1
2
1
3
1
1
1
1
$
$
$
$
$
$
$
$
605.95
519.23
510.47
895.04
274.81
382.38
584.37
488.85
$
$
$
$
$
$
$
$
4 $ 942.66 $
2 $
1 $
$
1,518.55 $
297.52 $
955.80 $
Subsidy
833.25
961.74
61.57
405.02
169.24
391.73
538.32
409.75
921.66
462.13
367.32
376.47
680.50
186.35
261.71
404.11
373.95
$
$
$
$
$
$
$
$
$
$
Monthly Cost
366.68
501.82
199.97
153.36
156.63
129.25
161.29
374.49
562.39
647.56
$
$
$
$
$
$
$
$
$
942.66
1,257.64
165.84 $
831.54 $
$
26,515.96 $
17,793.35
Total Premium Total Gov't Subsidy
Exchange
67%
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Current Contribs
$
625.00
$
750.00
$
250.00
$
250.00
$
250.00
$
550.00
$
250.00
$
625.00
$
250.00
$
625.00
$
$
$
$
$
$
$
$
$
$
Pre-tax
512.50
615.00
205.00
205.00
205.00
451.00
205.00
512.50
205.00
512.50
$
$
$
$
$
$
$
$
$
$
642.49 $
250.00 $
205.00 $
143.82
151.91
134.00
214.54
88.46
120.67
180.26
114.90
250.00
550.00
250.00
550.00
250.00
250.00
250.00
250.00
205.00
451.00
205.00
451.00
205.00
205.00
205.00
205.00
$
$
$
$
$
$
$
$
0 $
260.91 $
131.68 $
124.26 $
$
$
$
$
$
$
$
$
750.00 $
$
$
$
$
$
$
$
$
615.00 $
625.00 $
250.00 $
750.00 $
512.50 $
205.00 $
615.00 $
$
12,361.50 $
Total EE Contribs
Monthly Difference
(145.82)
(113.18)
(5.03)
(51.64)
(48.37)
(321.75)
(43.71)
(138.01)
357.39
135.06
437.49
(61.18)
(299.09)
(71.00)
(236.46)
(116.54)
(84.33)
(24.74)
(90.10)
(615.00)
(251.59)
(73.32)
(490.74)
(3,638.89)
-129%
Total Share Exchange
ABC Company
2014 ACA "Pay or Play" Worksheet
Incremental Cost
Number of Current Covered Employees
500
Number of Newly Eligible Employees Based on 30 Hour Minimum Definition
500
Affordable
Care
Actand enrolling in Medicaid (if applicable)
Estimated EEs
qualifiying
4%
Employee Benefits
40
Number of EEs exempted from Plan A penalty calculation (ACA amount for 2015)
80
Average Hourly Wage
$
10.50
$
16,380
Average Weekly Hours Worked for Eligibles
30
Average Annual Salary for Eligibles
$
16,105
medicaid expansion qualification for family size 1
Monthly
Penalty A Calculation - $2,000 No Offer Penalty
Penalty for not offering coverage
LESS Annual Corporate Tax Saving
Annual Per Employee
$
$
$
0%
2,000
2,000
Annual Total
$
1,840,000
Penalty B Calculation - $3,000 Annual Penalty
(Additional Money Added to Current Costs)
Penalty for offering coverage that's not affordable and/or does not meet minimum value
LESS Annual Corportate Tax Deduction
Estimated Employee accepting subsidy on exchange
Monthly
Annual Per Employee
$
$
$
0%
Annual Total
3,000
3,000
10%
$
300,000
Employer Affordable and Minimum Value Coverage Calculation
(Additional Money Added to Current Costs)
Estimated Monthly Single Premium
Minimum monthly EE contribution based on affordability calculation
Employer monthly net cost
LESS Annual Corporate Tax Deduction
Overall Estimated Net Cost To Employer
Participation Assumption
FICA Savings
Pre-Tax Contribution Calculation
Monthly Net Cost to Employee
MEC "Skinny Plan" Calculation
Estimated Skinny Plan (preventive only)
Less Annual Corporate Tax Deduction
Overall Estimated Net Cost To Employer
PLUS penalty for offering coverage that's not affordable and/or does not meet minimum
value
(applies only to those accepting subsidy on exchange)
LESS Annual Corporate Tax Deduction
Estimated EE Accepting Subsidy on Exchange
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Monthly
9.5%
$
$
$
500
130
370
30%
Annual Per Employee
$
$
4,444
(1,333)
$
3,111
80%
7.65%
Annual Total
$
1,430,936
$
$
47,617
1,097,132
20%
30%
0%
5%
$
103.74
$
Monthly
45
Annual Per Employee
$
540
$
(162)
$
378
$
3,000
$
-
$
3,000
Annual Total
$
173,880
$
$
75,000
248,880
Drop Spouses
Affordable Care Act
Employee Benefits
Drop Spouses
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
•
ACA does not require
employers cover spouses
•
If you offer affordable and
minimum value coverage, the
spouse is not eligible for a
subsidy
•
Got a good PR firm?
Offer Plans Matching
Metal Tiers
Affordable Care Act
Employee Benefits
Metal Tiers
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
90%
80%
70%
60%
Platinum
Gold
Platinum
Gold
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Silver
Silver
Bronze
Bronze
Show Taxes and Fees
Affordable Care Act
Employee Benefits
Employee Share of ACA Fees
Single
Two Person
Family
$400.00
$960.00
$1,200
Health Insurer Tax
$8.00
$19.20
$24.00
Transitional
Reinsurance Program
$5.25
$10.50
$17.85
PCORI
$.083
$.166
$.283
TOTAL
$413.33
$989.87
$1,242.13
Employee Contribution
$100.00
$240.00
$300.00
Employer Subsidy
$313.33
$749.87
$942.13
Health Insurance Rate
ACA Fees
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Another Look
Single
Two Person
Family
Health Insurance Rate
$400.00
$960.00
$1,200
Employer Subsidy
$313.33
$749.87
$942.13
Employee Share of
Insurance Rate
$86.67
$210.13
Health Insurer Tax
$8.00
$19.20
$24.00
Transitional
Reinsurance Program
$5.25
$10.50
$17.85
PCORI
$.083
$.166
$.283
$100.00
$240.00
$300.00
$257.87
ACA Fees
TOTAL EE COST
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Medicaid
Affordable Care Act
Employee Benefits
Help Employees Get Medicaid
•
Availability depends on State
•
Not clear on new approach on old rules
•
Moving an employee from employer
family coverage could save an employer
$15,000 - $20,000 per year on an
insured plan!
•
Way cheaper for employee!
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Michigan
With Medicaid
Affordable
Care
Act Expansion
Employee Benefits
2014 Poverty Guidelines
All States (except Alaska, Hawaii) and D.C
Annual Guidelines
Family
Size
1
2
3
4
5
6
7
8
$
$
$
$
$
$
$
$
100%
11,670
15,730
19,790
23,850
27,910
31,970
36,030
40,090
$
$
$
$
$
$
$
$
120%
14,004
18,876
23,748
28,620
33,492
38,364
43,236
48,108
$
$
$
$
$
$
$
$
133%
15,521
20,921
26,321
31,721
37,120
42,520
47,920
53,320
$
$
$
$
$
$
$
$
Percent of Poverty Guidelines
138%
139%
150%
16,105 $
16,221 $
17,505
21,707 $
21,865 $
23,595
27,310 $
27,508 $
29,685
32,913 $
33,152 $
35,775
38,516 $
38,795 $
41,865
44,119 $
44,438 $
47,955
49,721 $
50,082 $
54,045
55,324 $
55,725 $
60,135
$
$
$
$
$
$
$
$
200%
23,340
31,460
39,580
47,700
55,820
63,940
72,060
80,180
250%
$
29,175
$
39,325
$
49,475
$
59,625
$
69,775
$
79,925
$
90,075
$ 100,225
300%
$
35,010 $
$
47,190 $
$
59,370 $
$
71,550 $
$
83,730 $
$
95,910 $
$ 108,090 $
$ 120,270 $
400%
46,680
62,920
79,160
95,400
111,640
127,880
144,120
160,360
Estimated Percent Contribution on the Exchange/Marketplace
Family
Size
1
2
3
4
5
6
7
8
100%
120%
133%
Medicaid 2% HSA Medicaid 2% HSA Medicaid 2% HSA
Medicaid 2% HSA Medicaid 2% HSA Medicaid 2% HSA
Medicaid 2% HSA Medicaid 2% HSA Medicaid 2% HSA
Medicaid 2% HSA Medicaid 2% HSA Medicaid 2% HSA
Medicaid 2% HSA Medicaid 2% HSA Medicaid 2% HSA
Medicaid 2% HSA Medicaid 2% HSA Medicaid 2% HSA
Medicaid 2% HSA Medicaid 2% HSA Medicaid 2% HSA
Medicaid 2% HSA Medicaid 2% HSA Medicaid 2% HSA
Percent of Poverty Guidelines
138%
139%
150%
Medicaid 2% HSA
3.0%
4.0%
Medicaid 2% HSA
3.0%
4.0%
Medicaid 2% HSA
3.0%
4.0%
Medicaid 2% HSA
3.0%
4.0%
Medicaid 2% HSA
3.0%
4.0%
Medicaid 2% HSA
3.0%
4.0%
Medicaid 2% HSA
3.0%
4.0%
Medicaid 2% HSA
3.0%
4.0%
200%
6.3%
6.3%
6.3%
6.3%
6.3%
6.3%
6.3%
6.3%
250%
8.05%
8.05%
8.05%
8.05%
8.05%
8.05%
8.05%
8.05%
300%
9.50%
9.50%
9.50%
9.50%
9.50%
9.50%
9.50%
9.50%
400%
9.50%
9.50%
9.50%
9.50%
9.50%
9.50%
9.50%
9.50%
Estimated Monthly Amount of Individual Contribution or Cost on the Exchange/Marketplace (Silver Plan)
Family
Size
1
2
3
4
5
6
7
8
100%
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
120%
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
133%
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
2% to HSA
Percent of Poverty Guidelines
138%
139%
150%
2% to HSA
$
40.55 $
58.35
2% to HSA
$
54.66 $
78.65
2% to HSA
$
68.77 $
98.95
2% to HSA
$
82.88 $
119.25
2% to HSA
$
96.99 $
139.55
2% to HSA
$
111.10 $
159.85
2% to HSA
$
125.20 $
180.15
2% to HSA
$
139.31 $
200.45
$
$
$
$
$
$
$
$
200%
122.54
165.17
207.80
250.43
293.06
335.69
378.32
420.95
$
$
$
$
$
$
$
$
250%
195.72
263.81
331.89
399.98
468.07
536.16
604.25
672.34
$
$
$
$
$
$
$
$
300%
277.16
373.59
470.01
566.44
662.86
759.29
855.71
952.14
Percentages above vary depending on FPL. For example, between 150% and 200% will be an amount between 4 and 6.3%.
Individuals with incomes over 400% are not eligible for a subsidy.
Individuals who work for employers who provide coverage that is minimum value and affordabilty by definition of ACA are ineligilbe to receive
subsidies.
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
$
$
$
$
$
$
$
$
400%
369.55
498.12
626.68
755.25
883.82
1,012.38
1,140.95
1,269.52
Affordable Care Act
Employee Benefits
Help COBRA Event Employees get Coverage Elsewhere
•
COBRA Event
– Individual Marketplace allows for
enrollment if lose coverage
– Individual Market may subsidize
former employee
– If experience-rated or self-funded,
reduced liability on employer
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Private Exchange
Affordable Care Act
Employee Benefits
What is an Health Insurance Exchange/Marketplace?
•
A health care exchange is a
marketplace that connects insurance
companies with individuals or
employees wishing to purchase
heath insurance
•
The more exchange participants the
greater the economies of scale that
increase insurers ability to offer
competitive prices
•
In the insurance marketplace, the
popular thought is the element of
competition will ultimately reduce
prices
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Private Exchanges
•
One big reason for a private exchange is to move employers and their employees to
a defined contribution model
•
Also, to give employees more choice ( And Responsibility)
•
Flexibility of an employer has also been a cited value proposition of an employer,
however, flexibility will depend on the size of the employer and the ability of the
technology.
– Flexibility may include:
• Number of Medical Plans
• Number of Dental Plans
• What other ancillary plans to be offered?
• Even non-insurance will be offered?
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
The Private Exchange Model
Online Mall
•Consumer shops for services
Employer
•Decides on Partner/
Technology/Insurer
•Deposits money on behalf of each
member into account (HRA) or
makes credits/cash available
through cafeteria plan
$
$
Private Exchange
(Technology)
Created by:
Insurer or Agent or Technology
•Insurer or agent partners with
technology
•Manages health accounts for employees
Health
Insurance
Pharmacy
Wellness
•Has various products and services “on
the shelf”
Consumer
•Uses dollars to purchase
insurance and other
benefits
•Educated about available
options and tradeoffs
•Helps individuals buy services tailored to
their needs
Ancillary
•Can offer many more options than most
employers can offer outside of exchange
Other
•Brings stakeholders closer to impending
health care reform changes (Can be
designed with metal tiers to look like
Health Insurance Marketplace)
Source: Society of Actuaries - 2013
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Defined Contribution
Affordable Care Act
Employee Benefits
Defined Contribution
Medical
Dental
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Life
Disability
Affordable Care Act
Employee Benefits
Defined Contribution
Medical
Dental
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Life
Disability
Affordable Care Act
Employee Benefits
Defined Contribution
Medical
Medical
Single
Two Person
Family
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Defined Contribution
Medical
Medical
Single
Two Person
Family
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Trade Dollars
Affordable Care Act
Employee Benefits
Cadillac Tax
Cadillac Tax Ceiling
Affordability
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Minimum Value
Affordable Care Act
Employee Benefits
Cadillac Tax
Cadillac Tax - Projection
crisaro:
Current Premium should
include, HRA, Health
Active Employee Savings ER Contribution
Current
Premium
Single
EE + Spouse
EE+ Child(ren)
Family
$
$
$
$
600
1,320
1,140
1,680
Annual
$
$
$
$
7,200
15,840
13,680
20,160
Assumed Annual Trend
9.00%
Assumed Trend
Cadillac Tax Active
10,200
27,500
27,500
27,500
$
$
$
$
9%
10,163
22,359
19,310
28,457
Cadillac Tax
Qualified
Retiree/Individual
$
11,850
$
30,950
$
30,950
$
30,950
$
$
$
$
10,163
22,021
18,633
28,796
$
$
$
$
2018
FSA Reimbursement
to Employee
$
2,500
$
2,500
$
2,500
$
2,500
Total Towards
Cadillac Tax Cap
$
12,663
$
24,859
$
21,810
$
30,957
Tax Applied
TRUE
FALSE
FALSE
TRUE
$
$
$
$
$
$
$
$
$
$
$
$
Tax Applied
FALSE
FALSE
FALSE
FALSE
$
$
$
$
Amount to be taxed
2,463.39
3,457.49
Qualified Retiree/Individual
Single
EE + Spouse
EE+ Child(ren)
Family
Current
Premium
$
600
$
1,300
$
1,100
$
1,700
$
$
$
$
Annual
7,200
15,600
13,200
20,400
Number of Employees in Each Category
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
-
10,163
22,021
18,633
28,796
-
Affordable Care Act
Employee Benefits
“Cadillac” Tax on High-Cost Health Coverage
•
For taxable years beginning in 2018, the Affordable Care Act (ACA) imposes a 40
percent excise tax on high-cost group health coverage. This tax, also known as the
“Cadillac tax,” is intended to encourage companies to choose lower-cost health plans
for their employees.
•
The aggregate cost of an employee’s applicable employer-sponsored coverage is the
sum of the costs for each coverage. In general, the cost of a particular coverage is
determined under rules similar to the rules for determining the “applicable premium”
for COBRA purposes.
– The cost of the health FSA coverage is the sum of the employee’s salary
reduction contributions plus the cost of any reimbursement in excess of the
employee’s salary reduction contributions.
– If reimbursements are limited to the amount of the employee’s salary reduction
contributions, the cost of coverage will be the dollar amount of the employee’s
aggregate salary reduction contributions for the year.
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Cadillac Tax
•
The annual limitation will be adjusted each year to reflect the cost of living. The initial
dollar amounts may be adjusted in 2018 if there are significant increases in the cost
of health care between 2010 and 2018, and may also be increased by an age and
gender adjustment in 2018 and later calendar years.
Family Status
Annual Amount
Single
$10,200
Two Person
$27,500
Family
$27,500
Amounts included include, applicable premium, employer funded HSA,
HRA and/or employee funded FSA.
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Trade Dollars
•
For groups concerned about “Cadillac Tax”
•
Move dollars spent on medical by reducing to lowest level (Bronze)
– Remove possibility of Cadillac Tax for as long as possible
•
“Buy Back” dollars employees spend with better benefits in other areas
•
Think holes!
– Deductibles
– Lower Paid need more disability
– Ancillary coverage can supplement medical but not count against Cadillac Tax
OR Affordalitiy
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Employee Benefits
Trade Dollars
•
STD
– 2013 Survey
• 40% of employers do not offer
• Of 60% who do, 45% of those have employees pay some portion of
premium
•
LTD
– 2013 Survey
• 36% of employers do not offer
• Of the 64% who do, 36% of those have employees pay some portion of
premium
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Affordable Care Act
Trade Dollars to Fill Holes
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Employee Benefits
Other Thoughts
Affordable Care Act
Other Thoughts
• Advocacy Services
• Tele-Doc
• Healthcare Blue Book
• Consider self-funding
This seminar was presented on April 30, 2014. Because regulatory guidance
is evolving rapidly, reliance on this information after that date may not be advisable.
Employee Benefits
Questions ?