Outreach on the Affordable
Care Act to Farm Families in
Wisconsin
Heidi Johnson
Dane County University of Wisconsin-Extension
Crops and Soils Agent
Outreach Specifically to Farmers:
Why me???
• ACA affects them in many ways
– A tailored presentation
• Thinking like a farmer
• Extension provides non-biased information
– Trusted resource
• Ag agents are already invited to farmer
meetings
Where to begin?
• UW – Covering Kids and Families
• You and health insurance: Making a Smart
Choice for Farm Families – Barbara O’Neil
and Roberta Riportella
• UW- Center for Dairy Profitability
• Information was refined through discussions
with other Ag Agents and farmers
Presenting the information
Initial webinar to other agents – 32 attended
Live presentation to farmers – 18 attended
Made revisions
Statewide webinar for farmers – 24 counties,
95 people (snowstorm)
• Many other presentations to farm groups –
around 220 people
• 3 major ag papers wrote long features
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What did I add in for farmers?
• More statistics
• The challenge of calculating AGI
• Section 105, HRAs, HSAs, FSAs
– Farmers think in terms of taxes!
• Scenarios for:
– Farm families with young children
– Farm families with adult children
– Farm businesses
• Helping farmers calculate FTEs
• Advising them to how to advise their workers
Farm families as insurance consumers
• Farmers are more likely to have insurance than the average
American (90% and 85%, respectively)
– Except dairy farms, only 64%!
• 57% of farmers rely on off-farm job for benefits
• Others rely on individual policies (17% vs. 9% of all Americans)
– Few group options previously
– May use a high-deductible policy paired with a HSA
• High deductible policies are often used to “protect the farm”
Adjusted Gross Income is the basis for
determining subsidy
• AGI must be estimated for the coming year!
• Difficult for famers with fluctuating income
• If AGI is overestimated
– reduced subsidy
– subsidy will be credited at tax time
• If underestimate AGI – more subsidy – will
need to pay back at tax time
• Can choose to just take subsidy at tax time
Changes to Section 105 – HRA
accounts
• Employers were able to set aside money tax
free for employees to use to purchase their
own insurance policy
– This was also taken as a business expense
• Beginning in 2014, farms with more than 1
employee can no longer use pre-tax money to
purchase individual plans
•
Special thanks to Apel and Associates (Tracy Nodolf) for this information
Other tools: HRA,FSA and HSA
• Health Reimbursement Account
– Funded by Employer
– Now can just be for Vision and Dental, not premiums!
• Flexible spending account
– Funded by employee
– Limit of $2500, Employer may add $500
– To be used for medical expenses, not premiums
• Health savings account
– Can be used in conjunction with high deductible plan
– Limit of $3300 for individual, $6550 for family
Possible Farm Business Scenarios
• Husband and wife (minor
children)
• Husband, wife and adult children
under 26
• Multiple Families and non-family
employees
Husband, wife, minor children
• Possibly in the past had Section 105 – wife as
employee. Could still do this if she is the only
employee.
• Individual marketplace
– Family plan
– Could qualify for subsidy depending on income
Example
• Farming family with 2 minor children
– Parents are 40 and 42
– AGI = $55,000
– Monroe, WI (prices may vary greatly by region)
• Results
– 234% of poverty level
– Maximum to pay would be 7.47% of income
– Subsidy = $5523
– Out of pocket premiums = $4111, $342/month
Husband, wife, adult child (24 yrs old)
• Children can be covered on family
plans up to 26
– Do not need to be dependents or living
with parents
– Can be married
• The child’s income must be included
in AGI
Example
• Total AGI (with child) = $92,000
• Parents are 57 and 58, child is 24
• Results
– 471% of poverty
– NO subsidy
– Premiums = $14,888, $1240/month
Farm businesses with multiple families
and non-family employees
• Group plan through SHOP
– Eligible for tax credit if you meet criteria
• Group plan purchased outside of SHOP
– Still taken as business expense
• Do not provide group insurance
Example
• 6 people in group plan: 36, 42, 24, 42, 60 and
63 years old
• Average salary $35,000
• Monroe, WI
• Results:
– about $2600/month
– Tax credit of $1300/month
Tax credit for larger business
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20 employees
Average salary of $30,000/year
Tax credit goes down to 16% of premiums paid
If premiums are $60,000/year, credit would be
$ 9,600
How do you calculate your number of
Full Time Equivalents (FTE) Employees?
• For every month
– Number of employees that worked >130 hours
– Then add up hours of part timers and divide by
120
– Add two previous numbers together
• Do this for every month of the year and divide
by twelve to get average
• Must be 50 or more, not 49.8
What if you have less than 50?
• Small employers (less than 50 FTEs) are not
mandated to offer health insurance to full-time
employees
• But small businesses are eligible for a tax credit to
offset the cost of providing insurance
• Criteria for credit
– Less than 25 FTE employees, average salary of less
than $50,000/year and contribute at least 50% of
employees premuims
Requirements for Small Business Credit
• Maximum tax credit is 50% of the premiums paid
– Only receive maximum credit for 10 employees @
$25,000, more employees and higher salary fades out
credit!
• SHOP (Small Business Health Option Program)
Marketplace must be used
– WEBSITE DELAYED – must use paper application with
agent
– https://www.healthcare.gov/marketplace/shop/#stat
e=wisconsin
Calculating FTEs for small businesses
• Exclude the following people entirely from your
calculation of hours worked
– The owner(s)
– Family members or dependents living in their household
– Ministers considered by the common law tests to be selfemployed
– Seasonal employees who work for you 120 or fewer days
during the tax year
• Count up the total hours of all other employees in a tax
year and divide by 2080
• If the result is not a whole number, round down to the
next lowest number
The Reaction
• Many good questions and interest
– Private phone calls and conversations
• Questions often revealed the amount of
misinformation out there
– Farmers in Wisconsin tend conservative
• It is very difficult for people to get
information about how health care choices
will impact their taxes
Evaluation
• 105 returned evaluations
• Increase in knowledge in how the ACA impacts:
– Insurance consumers (from 1.8 to 3.6)
– Businesses (from 1.5 to 3.6)
• 90% indicated their questions were answered
about their personal health insurance
• 88% indicated their questions were answered
about their health insurance for their business
• Most said they would use the Smart Choices
workbook
• Most said they would use the website links
provided
The Future of ACA and Farmer
Education
• One more presentation for DATCP Farm
Center Volunteers
• We may have only seen the first wave of
questions and issues
– Next sign-up time – not good for farmer
– Tax time
– All of the issue made people walk away –
they may reconsider