Monday, March 18, 2013

Field Report


THANK YOU TO EVERYONE WHO ATTENDED OUR FEBRUARY SEMINARS ON HEALTHCARE REFORM FOR EMPLOYERS.  GREAT TURNOUT and EXCELLENT Q&A.   MORE TO COME...

As many of you know, I was one of the delegates from Charleston in Washington, DC last week to attend the Capitol Conference on Health Insurance.   Overall the experience was very positive and I look forward to sharing the latest insurance news with our clients.  

Below are some updated Snapshots of hot items regarding Healthcare Reform. ALSO, please use our  presentation as a complete point of reference. It is available on our website and stays up to date.  Or contact me and lets schedule a time to discuss. 

Snapshots from DC Insurance Conference and HC Reform. - 
1. The Value of a good Insurance Broker/Agent - Having a knowledgeable and pro-active broker/agent will be very important for employers and individuals.  This is complicated information and a mistake or poor strategy will prove costly to employers and individuals alike. 
THE TIME TO PREPARE IS NOW!
2.  The Essential Health benefits (EHB) for individuals and small groups is likely to change to higher deductibles as the Administration is realizing  that the original $2,000 deductible max is likely to cause an undue strain on premiums.   Qualified plans will still need to have at least 60% actuarial value.  And there will be out of pocket caps for all plans. 
3.   3:1 age ratio - unless this ruling is reversed (LIBERTY ACT -  encourage your representative to vote for repeal) , young healthy people(less than age 40) should expect to see "rate shock" as their rates will not be allowed to be more than 3 times less than age 64 rates.  This will affect small group and individual policies.  
4. Calculating 50 Full Time Equivalent (FTE) employees for purposes of the Penalties - You should use a consecutive 6 month period in 2013 to determine if you have 50 FTE..  Seasonal employees working less than 120 days for 2013 can be excluded. Employers should be keeping track of these numbers as of January 1, 2013 for 2014 calculation.  
5. Who must be offered Coverage?  Employees who work 30 hours or more per week based on a 3 to 12 month measurement period.   Employers need to offer coverage but employees will continue to have the right to waive coverage. 
6. Employer Penalties if employee waives coverage  -  If a large group employer offers qualified and affordable coverage to at least 95% of all Full time employees and employee waives coverage and seeks a subsidy,   the employer will not be liable for the penalty/ fine.  There will be an IRS triggering process "e-mailed" to the employer if a waived employee tries to collect subsidy so the employer can confirm they offered qualified and affordable coverage and avoid the penalty.  I recommend all employers keep on file waivers for proof of coverage offer.
7.  Premium Contribution Discrimination -  Can't discriminate in favor of highly compensated employees.  Premium contributions based on job classification or tenure should be clearly defined by employer....though expect changes and more clarification especially with the 9.5% affordability clause.
8.  9.5% affordability clause - Employees that  are forced to spend more than 9.5% of their  individual gross income (BOX 1 on W-2) will be eligible for exchange subsidy.  The 9.5% rule is based on employee only premium.  If they are spending less than 9.5% of premium and have a qualified employer plan they will not be eligible for subsidy. 
9. Common Ownership - Common ownership rules apply when calculating 50 FTE to determine if a penalty applies for not offering qualified, affordable coverage.  Common ownership can't be defined based on EIN alone.  The ruling is based on "Controlled Group" status and can be defined by parent/subsidiary companies or sister companies.  I will ask all groups to confirm their controlled group status with a qualified CPA.  I can refer one if needed. 
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Thank You, Marshall

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