Transcript The New Health Care Law - What Does it Mean for Me & My

The New Health Care Law
What Does it Mean for Me & My Authority?
Robert E. Hagan, Jr., CPA
American HealthCare Group
Pittsburgh, PA
7/17/2015
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Background Information
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Health Care Professionals
Financial Background
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www.American-HealthCare.net
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History of Health Care Reform
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History of Health Care Reform
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Goals
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Uninsured access to high quality, affordable
health care
Reduction of cost of health care coverage
Promote wellness & change lifestyles
Consequences
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Many changes will come as implementation
proceeds and states digest costs
www.American-HealthCare.net
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History of Social Legislation
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1913: Establishment of IRS
1935: Social Security Administration
1948: Health Insurance as an Employee Benefit
1965: Medicare & Medicaid
1973: HMO Act
1974: ERISA
1985: PPOs
1994: Managed Care Initiatives
1996: HIPAA
1996: Community Health Centers
2010: Patient Protection and Affordable Care Act
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www.American-HealthCare.net
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Cost Containment
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Health Care Professionals
System based on their advice, referrals
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Cost Containment
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Wellness
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Use expertise to encourage prevention
Stats about Americans (WELCOA)
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83% don’t have a good diet
65% are over weight or obese
67% don’t get enough exercise to get the health
benefits
Up to 70% of all causes of death are lifestyle related
and preventable
www.American-HealthCare.net
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Entities Affected by Reform
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Entities Affected by Reform
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Employers
Individuals
Medicare
Medicaid
Uninsured
Foreign nationals
State governments
Federal government
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Doctors
Hospitals
Insurance companies
Pharmaceutical
companies
Other health care
professionals
www.American-HealthCare.net
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By the Numbers
40,000,000 uninsured
180,000,000 now insured
45,000,000 Medicare
45,000,000 Medicaid
310,000,000 people
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www.American-HealthCare.net
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The Good & The Bad
What is good
 Shrink costs by 33%
 Universal Coverage
 Mandatory Coverage
 Move more people
paying into the pool.
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What is bad
 Providers will come
under intense pressure
 Cost is unknown
 Cost to administer will
increase
 Mandatory coverage
www.American-HealthCare.net
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Current Health Care Reform
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The facts
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Majority of doctors like reform
Healthcare system needed to be reformed
Cost unknown
Utility
Access to health care system
Creation of state-based exchanges for individuals
and small businesses
www.American-HealthCare.net
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Tax Consequences
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10% excise tax on indoor tanning –
6/30/2010
0.9% Medicare tax on wages – 2013
3.8% Medicare tax on unearned income
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Single – over $200,000
Couples – over $250,000
Increase from 7.5% to 10% medical
deductions floor – 2013
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www.American-HealthCare.net
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Tax Consequences
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40% tax on high-cost health plans - 2018
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Medical Device Companies – 2012
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Annual Fees
Insurance Companies
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2.3% tax
Pharmaceutical Companies
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Individuals - $10,200
Families - $27,500
Annual Fees
Long Term Care
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www.American-HealthCare.net
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Public Programs
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CHIP
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Medicare
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Continue current law through 2019
Increased federal subsidies
Added coverage for annual physical exams and other
preventive services
Eventual elimination of doughnut hole affecting 14%
 2010 – doughnut hole participants receive $250 rebate
 2011 – discounts and subsidies will decrease doughnut
hole to 25% in 2010 from 100% today
Medicaid
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Varies State by State
Expand Medicaid to 133% of the federal poverty level.
www.American-HealthCare.net
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Health Insurance Exchanges
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Aimed at the now
uninsured, underinsured
and those who buy
insurance on their own
Employers
State run or will be run by
Feds
More organized and
competitive market
Choice of Plan
Establish common rates
regarding the offering
Understanding options
Common pricing methods
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Way to achieve universal
coverage
No national government
plan
Cut out agents/brokers from
commissions
Available to all individuals
and small businesses of
100 employees or less
Could be lowered to 50
employees or less
www.American-HealthCare.net
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Health Insurance Exchanges
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Only US citizens and legal immigrants
At least 2 multi state insurers in each exchange
At least 1 non profit
4 benefit tiers – bronze, silver, gold, platinum
Catastrophic – up to age 30
Require guarantee issue and renewability
Rating variation on age, geography, tobacco use
www.American-HealthCare.net
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Affects on Employers
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The Business Case for “Wellness”
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Although we spend more dollars on health
care than any other industrialized nation, we
are not the healthiest.
Over 70% of illnesses today are attributable
to preventable causes.
Obesity alone is estimated to cost an
employer at least $460 per employee per
year.
The workplace is the ideal setting to address
an employee’s health & well-being.
Wellness programs should aim to reduce
health benefits costs through SUSTAINED
improvements in workforce health.
It is a long-term strategy that may not produce
significant
ROI in the short-term.
www.American-HealthCare.net
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Wellness and Healthy Lifestyles
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Up to 30% of total premium discounts can be offered
as incentives for employees maintaining a health
standard. Can go to 50%.
Typical wellness initiatives
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Blood testing
Body mass index (BMI)
Strength/flexibility
Education on Lifestyle/habits
 Tobacco Cessation
 Excessive Alcohol/Drugs
 Weight control
 Lack of Exercise
www.American-HealthCare.net
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What to Expect
10 or less employees
 If average wage $25K or less, tax credit will
be 35% of premium
 Do not have to provide health insurance
benefits
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www.American-HealthCare.net
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What to Expect
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24 or less employees
Small Business Health Care Tax Credit is
available if average wage $50K or less – up
to 35% of premium
Do not have to provide health insurance
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www.American-HealthCare.net
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What to Expect
49 employees or less
 Do not have to provide health insurance
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What to Expect
50 or more
 If health insurance is not covered, will be
assessed a fee of $2K per FTE. The first 30
FTE are excluded from assessment.
 If health care is offered, but someone collects
the premium tax credit, the employer is
charged a fee of $3K/employee who
accesses the credit or $2K for all employees.
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www.American-HealthCare.net
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What to Expect
201 and more
 Employees must be automatically enrolled in
the plan with an opt out option
 Employees must be informed of the Health
Insurance Exchange
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www.American-HealthCare.net
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Employers
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No adequate coverage - 2014
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50 + employees - $2,000 per worker, not counting
the first 30 workers
www.American-HealthCare.net
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Employer Mandates
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Free Choice Vouchers – if an employee opts out and their share
of the premium is greater than 8%, but less than 9.8% of the
employees household income and they buy through a Health
Insurance Exchange
Inform employees of Health Insurance Exchange
Inform employees if they are eligible for premium assistance tax
credits and cost-sharing reductions. Employer pays less than
60% of the cost of coverage.
A minimum package of benefits to be designed and defined by
Feds. Only four types of plans to be allowed. The Health
Insurance Exchange will only offer those qualified health benefit
plans.
Effective 2014
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Employers
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Value of health benefit reportable on W-2’s – 2011
Elimination of Part D prescription drug deduction –
2013
Health Savings Accounts – double to 20% penalty
for non qualified distributions – 2011
Unaffordable Coverage – if an employee opts out of
plan because premium is greater than 9.5% of family
income the employer pays a $3K penalty for each FTE
who receives a government subsidy and buys through
an exchange
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www.American-HealthCare.net
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Employers
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Actuarial values – at least 60% of base plan
Cadillac plans – in 2018 a 40% excise tax on
insurance companies and employers
FSA limits - $2.5K limit with no OTC, w/out a
prescription
HSA – 20% penalty on non-medical distributions
W-2 – include value of employer health benefits
Long term care enrollment – optional program
Nursing mothers – must allow time, space and privacy
to mothers who are expressing milk.
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www.American-HealthCare.net
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Employers
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Small Business Tax Credit – Effective 1/1/2010
Receive both State and Federal Tax Credits
 Non Profits – 25% credit – up to 35% in 2014
 Dental & Vision Coverage eligible for credit
 Credit – 35% of premiums – up to 50% in 2014
Example
ABC, Inc.
10 FTE w/average wage: $24K
ABC’s contribution to health insurance: $100K ($10K/FTE)
State Small Business Health Care Tax Credit: $40K
Federal Tax Credit: $35K
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www.American-HealthCare.net
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Affects on Residents/Individuals
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Individuals
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Individual tax - $95 or 1% of income – 2014
Individual tax - $695 or 2.5% of income – 2016
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Some exemptions: financial, short term loss of coverage (3
months)
Premium subsidy for individuals – 133 – 400% of
federal poverty level - 2014
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Singles – up to $44,000
Families – up to $88,000
www.American-HealthCare.net
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Individuals
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Waiting period cannot exceed 90 days
Health insurance contract cannot be canceled other than fraud or
intentional misrepresentation
No copayments or deductibles for preventive care and medical
screenings
Group plans must:
 Prohibit lifetime limits
 Prohibit rescissions
 Restrict annual limits
 Include limitation on excessive waiting periods
 Include coverage for non-dependent children under age 27
 Prohibit pre-ex condition exclusions and prohibit annual limits
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www.American-HealthCare.net
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Individuals/Residents
Wellness: Service Coordinator/Nurse
Coordinator
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www.American-HealthCare.net
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Strategic Planning/Summary
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Strategic Planning Considerations
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Senior management should make final
decisions
Determine total annual budget for health plan
CFO – involved in analysis & plan selection
3 Brokers/agents competing for your
business
Assess employee’s health care needs
Review claims data annually
Wellness – assessment & incentives
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www.American-HealthCare.net
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Strategic Planning Considerations
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Benefit Structure
 Determine if existing benefit plan is aligned with prevention and
wellness goals & objectives
 Identify screens & tests not covered
 Evaluate the potential costs and benefits of preventive services
Analyze employee attitudes
 Interest in participating in specific programs
 Barriers to participation in prevention programs
Perform a Health Risk Assessment
 Health risks and habits of employees and other beneficiaries
 Readiness to change unhealthy lifestyle habits
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www.American-HealthCare.net
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Strategic Planning Considerations
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Medical claims analysis
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Identify “top ten” costliest conditions
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Understand services being under- and over-used by workforce population
Health plan
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Understand existing health plans’ current and potential capabilities
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Are conditions preventable or related to lifestyle choices?
Ability to incorporate coverage changes
Ability to track preventive service utilization by employer or by plan
Efforts to educate primary care physicians about appropriate
preventive care benefit administration
Ability to support efforts to educate employees about preventive
services
Identify possible gaps between prevention program goals and the
capabilities of health plans
HIPAA Wellness Incentives
www.American-HealthCare.net
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Questions & Answers
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Contact Information
Bob Hagan
American HealthCare Group
www.PathwaysToSmartCare.com
1910 Cochran Road
Manor Oak One, Suite 405
Pittsburgh, PA 15220
Phone: (412)563-7804
Fax: (412)563-8319
[email protected]
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