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Health Care Reform Challenges #1 2000 pages of legislation 100,000 pages of rules

Repeal will be challenging

Funding will be a problem

How to pay for it? Is it enough? Navigating Health Reform 2010

 0.9% Additional Medicare tax on earned income (2013)  Due on earned income in excess of $200K for single taxpayer or $250K for

married filing jointly or $125K married filing separately.

 3.8% Medicare tax on unearned income (2013)  Due on un-earned income on individual taxpayers with a modified

adjusted gross income of in excess of $200K for single taxpayer or $250K for married filing jointly or $125K married filing separately.  Consult your tax professional

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Tanning tax 10% (2010) Annual Pharma fee (2011 ) begins in at 2.5Billion ($27B) Annual Medical Device fee (2012) 2.3% of sales ($20B) Annual Insurer fee (2014) ($60B) Cadillac Tax, (2018) 40% excise, ($32B) Matthew Byrne (614) 336-3636,

EMPLOYER SPONSOREDCOVERAGE Navigating Health Reform 2010

Employer Mandate (2014)

 Employers are NOT required to offer coverage  BUT employers who choose not to offer coverage will pay a penalty starting in 2014  Penalty applied to employers with 50 or more

FTEs (30hrs/wk)  Penalty is $2000-3000 per employee, per year.  Applied to employee count over 30 (exempt on the 1st 30 FTEs) Matthew Byrne (614) 336-3636,

• Employer plans must be at least 60% actuarial value • Employer plan must cost less than 9.5% of income.

Individual Mandate (2014) Navigating Health Reform 2010

All U.S. citizens and legal resident are required to have coverage. You must comply with the individual mandate if. . .  If you work for an employer who has OVER 50+ employees who chooses to pay the penalty and not offer coverage  If you work for an employer who has UNDER 50 employees (no penalty) and does not offer coverage  Individual Penalty = $695 per year in 2014 and phases to 2.5% of

taxable income.

 Subsidies will be available for up to 400% of the poverty

level (88,000/yr for a family of four)  Medicaid expanded to 133% FLF in all states.

 Exchanges Matthew Byrne (614) 336-3636,

Grandfathering Navigating Health Reform 2010

 Grandfathering allows groups and individual members

with an existing plan prior to 03/23/2010 to be exempt from the new product requirements effective in 2014 and most of the 09/23/2010 requirements. To maintain grandfathered status, a client must continue to keep the plan and the plan’s benefits “essentially” the same.  Examples;  Reductions of benefits or increases to out of pocket spending (higher deducible and co-pays)

Matthew Byrne (614) 336-3636,

Grandfathering Navigating Health Reform 2010

Grandfathered Exempt until next renewal Not Grandfathered

• Plans issued prior to March 23, 2010 • No significant changes to benefits (deductibles + co pays)

• Plans started/modified after 03/23 but before 09/23

• Plan started or significantly modified after September 23, 2010.

Matthew Byrne (614) 336-3636,

High Risk Pool Navigating Health Reform 2010

 Must be with out coverage for 6 months  Must have been declined for coverage by 2 carriers  Available Sept 1,2010  I’m told, 2000 spots available (perhaps more in future)

Matthew Byrne (614) 336-3636,

Dependent Coverage Navigating Health Reform 2010

 Expanded to 26 (28 for Ohio)  Only if no other coverage is available

 Most dependent s will be eligible for addition to their

employer plan starting at their next open enrollment.  Additions are made regardless of student or marital status.  Additions need NOT be a dependent based on IRS definition.  Child may be married and still be added  Spouse cannot be added (but could be added to her parents plan).

 Employer not required to pay for dependent

Matthew Byrne (614) 336-3636,

Health SavingsAccount Changes Navigating Health Reform 2010

What is a Health Savings Account? A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). Similar to an IRA, the money you deposit in an HSA is tax-free. You don't pay taxes on qualified withdrawals, either. In effect, it's like getting extra money from the government to pay for health-care.

 OTC are not considered a qualified medical expense

starting in 2011.  Penalty for early withdraw jumps from 10% to 20%  FSA contributions are limited at 2500/year.

Matthew Byrne (614) 336-3636,

Exchanges (2014) Navigating Health Reform 2010

 Online shopping for people utilizing any federal subsidy or


 Small Health Insurance Tax Credit (50% in 2014)  Medicaid  Subsidies (400 FPL)

 Plans may be packaged based on actuarial value    

60% (Bronze) 70% (Silver) 80% (Gold) 90% (Platinum)

 Likely another sales channel for subsidy takers, facilitated and

navigated with the help of licensed brokers.

Matthew Byrne (614) 336-3636,

Changes September 23, 2010 Navigating Health Reform 2010

 No pre-existing conditions under 19 years old  Dependent coverage to 26 (if no other coverage is


 Ohio law expands this to 28

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No lifetime limits on essential benefits Restricts annual limits on essential benefits No rescission (except for fraud) Participant may choose PCP No pre-authorization for OB/GYN ER covered in and out of network No cost sharing on preventive Matthew Byrne (614) 336-3636,

Changes in 2011 Navigating Health Reform 2010

 2011 Medicare Advantage cuts begin  2011 No longer allowed to use FSA, HSA, HRA, Archer MSA    

distributions for over‐the counter medicines Americans begin paying premiums for federal long‐term care insurance (CLASS Act) (Abandoned) Health plans required to spend a minimum of 80% of premiums on medical claims Penalties for non‐qualified HSA and Archer MSA distributions double (to 20%) Employers required to report value of health benefits on W‐2 (postponed to 2012)

Matthew Byrne (614) 336-3636,

2014 Navigating Health Reform 2010

 All health products will be guarantee issue  No health status rating; ratings limited to  Age 3:1  Tobacco 1:5:1  Family Size  Geography

 Health Insurance products must exhibit at least 60%

“actuarial value”  Employer mandate (Play or Pay)  Individual mandate (Play or Pay) Matthew Byrne (614) 336-3636,

Larger Group Reform Areas of Interest  Value of employer-sponsored coverage on W-2s for 2012 tax year – meaning W-2s issued in January 2013 (originally required earlier, but the IRS delayed the requirement until the 2012 tax year for large employers and the 2013 tax year for employers who issue fewer than 250 W-2s)  Uniform coverage summaries/60-day notice for material modifications  Employee notification of exchanges and premium subsidies

MaintainingCoverage Navigating Health Reform 2010 INDIVIDUAL






Matthew Byrne (614) 336-3636,


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Navigating Health Reform  

Health Care Reform Challenges Repeal will be challenging Funding will be a problem