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Health Care Reform The “Reader’s Digest” Version or What Does All this Really Mean for My Business? Presented b

Health Care Reform The “Reader’s Digest” Version or What Does All this Really Mean for My Business? Presented by John Owens Sr. Vice President – Special Markets. Health Care Reform’s Impact on My Business… … and the decisions I need to make today: The impact on my business from

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Health Care Reform The “Reader’s Digest” Version or What Does All this Really Mean for My Business? Presented b

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  1. Health Care Reform The “Reader’s Digest” Version or WhatDoes All this Really Mean for My Business? Presented by John Owens Sr. Vice President – Special Markets

  2. Health Care Reform’s Impact on MyBusiness… … and the decisions I need to make today: • The impact on my business from • nowuntil January 1, 2014 • The impact on my business • effectiveJanuary 1, 2014

  3. Health Care Reform: • What do I need to decide right away? • Decision on your current Major Medical Plan: • “Do I Grandfather my current plan* or not”? • (*Applies to medical plans in existence prior to March 23, 2010)

  4. Health Care Reform: • Grandfathering? Why? • Extending coverage to participants' children up to age 26 • Removing lifetime limits on "essential health benefits” • Setting minimum annual caps via regulation • Waiting periods to enter plans cannot exceed 90 days • Non-discrimination rules (now applying to fully-insured plans now) • Can I afford to Grandfather my current plan? All these mandates come with a cost • Do I need design flexibility or a new carrier to mitigate my increasing plan cost?

  5. Health Care Reform: • Loss of Grandfathering Status • The six changes described in the grandfathered plan regulations are: • Elimination or substantial elimination of a benefit, • Increase in a cost-sharing requirement expressed as a percentage, • Increase in a deductible or out-of-pocket maximum by an amount that exceeds medical inflation plus 15 percentage points, • Increase in a copayment by an amount that exceeds medical inflation plus 15 percentage points (or, if greater, $5 plus medical inflation), • Decrease in the employer's contribution rate towards the cost of coverage by more than 5 percentage points, and • Imposition of annual limits on the dollar value of all benefits below specified amounts.

  6. Health Care Reform’s Impact on My Business… … and the decisions I need to make: • Depends on the size of your business by – • Do I have Less than 51Full Time Employees? • (Averaging 30 hours a week or more) • Do I have More than 51 Full Time Employees? • (Averaging 30 hours a week or more)

  7. Health Care Reform: • Do I qualify for tax subsidies by offering group health insurance for this year and beyond? • Groups with up to 10 employees: possible tax credit up to 100% for companies who pay at least 50% of employee premiums • Groups with 11 to 25 Employees: possible 35% tax credit for companies who pay at least 50% of the employee premiums • For employers with 26-50 full time employees no tax credits available , but exempt from Play or Pay requirements • For employers with more than 50 full time employees the decision by 2014 is Play or Pay

  8. Do I Have 50 or 51 Employees? Who is counted? To determine if you reach the 50-employee threshold, count each full-time employee and then add part-time employees to the total. Example: You have 41 full-time employees and an additional 60 part-time employees working 20 hours each. Multiply part-time employees by number of hours worked, and then divide that number by 120. (60 x 20) divided by 120 = 10 41 full-time + 10 part-time = 51 employees* *You are now subject to penalties!

  9. Health Care Reform by Employee Segment

  10. Health Care Reform – Timeline • 2010 • Eligible dependents may be covered until age 26. • Individuals previously uninsurable will have coverage. • Eliminate pre-existing condition limitations for new coverage for children. • Eliminate annual and lifetime internal plan maximums. • 2011 • Carriers must meet expense ratios and pay rebates when not met. • Over the counter drugs will no longer be eligible under FSA’s, HRA’s, or HSA’s. • 2012 • Employers must show the premium value of coverage on employee W-2.

  11. Health Care Reform – Timeline • 2013 • Maximum allowance for Cafeteria Plan health expenses is $2,500 • Additional Medicare taxes on investment income and higher brackets • Taxes on health carriers, medical device manufacturers and drug companies • 2014 •   Employers with 50 or more full-time employees must “pay” (penalty) or “play” (coverage) • Most Americans must also “pay or play” with acceptable coverage levels • Health Insurance Exchanges (multi or single state pools) will be created

  12. Serving the marketer business community since 1956. John Owens Sr. Vice President, Special Markets The Lewer Agency, Inc. 4534 Wornall Road Kansas City, MO 64111 jmowens@lewer.com 1 800 821 7715 x 109

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