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How PPACA (Obamacare) affects businesses

UNDERSTANDING and PREPARING

We must prepare for the upcoming changes.

Please contact Robert at 800-762-4130 or 407-671-7331

to discuss implications and implementation

guidance on PPACA for companies with

*Important: New Full time definition and

full time equivalents will change your benefit

eligible counts as of 10/1/2013

1. Less than 25 employees

2. Less than 50 employees

3. More than 50 employees

 2013

• Impose $2,500 annual cap on FSA contributions (indexed to CPI)
• Increase Medicare wage tax by 0.9% and impose a new 3.8% tax on unearned, nonactive business income for those earning over $200,000 or $250,000 for families (not indexed to inflation)
• Increases (7.5% to 10%) threshold at which medical expenses, as a percentage of income, can be deductible
• Eliminate deduction for Part D retiree drug subsidy employers receive
• Impose 2.3% excise tax on medical devices
• Medicare cuts to hospitals which treat low income seniors begin
• Post acute pay for quality reporting begins
• Secretary of Health and Human Services awards loans and grants for establishing nonprofit health insurers
• $500,000 deduction cap on compensation paid to insurance company employees and officers
• Part D “donut hole” reduction begins, reaching a 25% reduction by 2020

2014

• Individuals without minimum coverage are subject to a tax of the greater of $695 or 2.5% of income
• Employers who fail to offer “affordable” coverage would pay a $3,000 penalty for every employee that receives a subsidy through the Exchange
• Employers who do not offer insurance must pay a tax penalty of $2,000 for every full-time employee
• More Medicare cuts to home health begin
• States must have established Exchanges
• Employers with more than 200 employees can auto enroll employees in health coverage, with opt out
• All non grandfathered and Exchange health plans required to meet federally mandated levels of coverage
• States must cover parents /childless adults up to 138% of poverty on Medicaid, receive increased FMAP
• Tax credits available for Exchange based coverage, amount varies by income up to 400% of poverty
• Insurers cannot impose any coverage restrictions on pre existing conditions (guaranteed issue/renewability)
• Modified community rating: individual or family coverage; geography; 3:1 ratio for age; 1.5:1 for smoking
• Insurers must offer coverage to anyone wanting a policy and every policy has to be renewed
• Limits out of pocket cost sharing (tied to limits in HSAs, currently $5,950/$11,900 indexed to COLA)
• Insurance plans must include government defined “essential benefits ” and coverage levels
• OPM must offer at least two multi state plans in every state
• Employers can offer some employees free choice vouchers for health insurance in the Exchange
• Government board (IPAB) begins submitting proposals to cut Medicare
• Impose tax on nearly all private health insurance plans
• Medicare payment cuts for hospital acquired infections begin (fiscal 2015)

2015

• More Medicare cuts to home health begin

2016

• States can form interstate insurance compacts if the coverage with HHS approval (2016)

2017

• Physician pay for quality program begins for all physicians
• States may allow large employers and multi employer health plans to purchase coverage in the Exchange.
• States may apply to the HHS secretary for a limited waiver from certain federal requirements

2018

• Impose “Cadillac tax on “high cost” plans, 40% tax on the benefit value above a certain threshold: ($10,200 individual coverage, $27,500 family or self only union multi-employer coverage)