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PHYSICIANS AS BUSINESS OWNERS:The Effects of The Health CareAffordability Act (ACA)ION Community Counts Practice Effectiveness Web SeriesJune 27, 2013Risë Marie Cleland, Oplinc Inc.www.oplinc.com

Important to RememberThe information provided in this presentation is forinformational purposes only. Information is provided forreference only and is not intended to providereimbursement or legal advice.Laws, regulations, and policies concerning reimbursementare complex and are updated frequently and should beverified by the user. Please consult your legal counsel orreimbursement specialist for any reimbursement or billingquestions.You are responsible for ensuring that you appropriately andcorrectly bill and code for any services for which you seekpayment. Oplinc does not guarantee the timeliness orappropriateness of the information contained herein foryour particular use.2

ACA - Employer RequirementsWatch for Final Rules, Clarifications & Updates



Small Business Tax CreditsSmall employers with fewer than 25 employees may qualify for this taxcredit to help offset costs. Qualifying employers must:‣ Have average annual wages of less than $50,000 and‣ Contribute 50% or more toward employees’ self-only premium costsPhase I (2010-2013)Tax credit up to 35% (25% for non-profits) of employer costPhase II (2014)Tax credit up to 50% (35% for non-profits) of employer cost,only applies if coverage is through the SHOP MarketplaceNote: Credit works on a sliding scale, for each FTE above 10 and averageannual wages above $25,000, the credit is reducedwww.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers6



The Small Business Health OptionsProgram (SHOP)SHOP Marketplace or ExchangeWill be available in every state, run by the state, federalgovernment or a collaboration of both• October 1, 2013: Opens for enrollment• January 1, 2014: Coverage begins• In 2014: For employers with 50 or fewer FTE (up to100 FTE in Hawaii)• In 2016: For employers with up to 100 FTE in allstates9

SHOPs in 2014State or Federally RunSTATE• Can set the size of the smallgroup market at either 1-50or 1-100 employees• May permit employers tooffer their employees achoice of Qualified HealthPlans (QHPs) at a singlelevel of coverageFEDERAL• For businesses with 50 orfewer FTE (up to 100 inHawaii)• Employers will have thechoice of one QualifiedHealth Plans (QHP) (will notoffer the employee choicemodel in 2014)11

SHOPs Employee Choice ModelBronze60%Silver70%Gold80%Platinum90%*Starting Jan. 1, 2015: All state and federal SHOPs must allow employers to offertheir employees a choice among all QHPs at the level of coverage (bronze, silver,12gold, or platinum) chosen by the employer


Large BusinessEmployers with 50 or More FTE• A business that has 50 or more FTE is subject to a penalty for failing toprovide affordable and adequate health insurance to its full-timeemployees and their dependents• Full-time is defined as working thirty-hours a week (or more) on averageduring a one-month period• Part-time (non-seasonal) workers are counted on an aggregate basis todetermine whether the 50 full-time threshold is crossed (in general, dividingaggregate hours worked – if paid hourly — by 120)• While part-time employees count toward whether an employer is over50 the employer does not have to pay any penalties for failing toprovide insurance for those part-time employees• Independent contractors or rented employees do not count for the 5014

Large Employer Does Not Offer CoverageThe ACA assesses a fee of $2,000 per full-time employee,excluding the first 30 employees, on employers with more than 50employees that do not offer coverage and have at least one fulltimeemployee who receives a premium tax credit.*EXAMPLEEmployer has 60 full-time employees60 – 30 = 3030 x $2,000 = is $60,000.*Note: The penalty is triggered when at least one employee gets atax credit or government assistance in obtaining health care15

Large Employer Offers Coverage –Is it Affordable?• Large employers are subject to a penalty if thecoverage they provide is not “affordable”• Employers have 3 safe harbors to meet the“affordable” test, if the insurance costs:1. Less than 9.5% of the employee’s W-2 wages for thatyear, or *2. Is 9.5% of an employee’s hourly wages multiplied by130, or3. Are less than 9.5% of the federal poverty level for oneperson*at least through 2014 according to notice 2012-58www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions16

Large Employer Offers Coverage –Is it Adequate?• Large employers are subject to a penalty if thecoverage they provide is not “adequate”• A plan is considered adequate if:• The actuarial value (the total allowed costs the plan isexpected to cover) is at least 60% , and• The plan covers dependents (under age 26) the plandoes not have to cover the employee’s spouse• Or, employers may use the MV (minimum value)calculatorNote: Employers may rely on this guidance until the Final Rule is publishedwww.irs.gov/irb/2013-23_IRB/ar08.html17

If Not…• The large employer is subject to a penalty• If at least one full-time employee receives a premiumtax credit, the employer will pay the lesser of:• $3,000 for each employee receiving a premium credit or• $2,000 for each full-time employee, excluding the first 30employees.• This penalty is waived if the employer is providingaffordable and adequate coverage to 95% of itsemployeeswww.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act19

Employees to Which Penalty AppliesEmployeecategoryFull-timePart-timeTemporaryAgencyEmployeesHow is this category of employeeused to determine “large employer”?Counted as 1 employee, based on a30-hour or more work weekProrated (calculated by taking thehours worked by part-time employeesin a month divided by 120)Generally counted as an employee ofthe temporary agency (except forindependent contractors)To be a “large employer,”could the employer besubject to a penalty ifthis type of employeereceived a premiumcredit?YesNoYes, for those employedby the temporary agency& who are determined tobe full-time, on average,for up to 12 months20

Determining Minimum Value ofEmployer-Sponsored Plans• On April 30, 2013, the Treasury Department and the IRS issuedproposed regulations relating to minimum value of eligibleemployer-sponsored plans and other rules regarding thepremium tax creditThe proposed rule is open for comments until July 2, 2013• Starting in 2014, whether such a plan provides minimum valuewill be relevant to eligibility for the premium tax credit andapplication of the employer shared responsibility payment.Proposed Rulewww.gpo.gov/fdsys/pkg/FR-2013-05-03/pdf/2013-10463.pdfhttp://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions21

Reporting Requirement Employers• For employers with 50 or more FTE employees, newinformation reporting requirements on healthinsurance coverage offered• First reports due 2015• The Internal Revenue Service (IRS) has not yet issuedproposed regulations explaining the details of therequirements23

ALL EMPLOYERSLarge & Small Businesses

Insurance Exchange Notice• No later than Oct. 1, 2013, employers must notify allcurrent employees of coverage options availablethrough the Marketplace, and at time of hire on andafter Oct. 1, 2013• The U.S. Department of Labor has released 2 modelnotices you may use to comply with this rule1. For employees who do not offer a health plan2. For employees who do offer a health planTechnical guidance on the notice is alsoavailable on the DOL website:www.dol.gov/ebsa/healthreform/25

Insurance Exchange Notice• The written notice must inform the employee:• Of the existence of the Marketplace (Exchange) including a descriptionof the services provided by the Marketplace, and the manner in whichthe employee may contact the Marketplace to request assistance;• If the employer plan's share of the total allowed costs of benefitsprovided under the plan is less than 60 percent of such costs, that theemployee may be eligible for a premium tax credit under section 36B ofthe Internal Revenue Code (the Code) if the employee purchases aqualified health plan through the Marketplace; and• If the employee purchases a qualified health plan through theMarketplace, the employee may lose the employer contribution (if any)to any health benefits plan offered by the employer and that all or aportion of such contribution may be excludable from income for Federalincome tax purposes.26


Exchange Enrollment Periods• The initial open enrollment in Exchanges runs from October1, 2013, through March 31, 2014. In subsequent years,open enrollment will run from October 15 throughDecember 7.• Exchanges will also provide special enrollment periods tofacilitate enrollment for special circumstances.• The marketplace must permit individuals whose existingcoverage through an eligible employer-sponsored plan will nolonger be affordable or provide minimum value for his or heremployer’s upcoming plan year to access this specialenrollment period prior to the end of his or her coveragethrough such eligible employer-sponsored plan.28

Qualifying Events29

Form W-2 Reporting• Employers must report the cost of coverage under an employersponsoredgroup health plan on an employee’s Form W-2, Wage and TaxStatement, in Box 12, using Code DD.• Employers filing fewer than 250 Forms W-2 for the previous calendaryear do not have to report this until the IRS issues final guidance for thisreporting requirement.• The amount reported does not affect tax liability, the value of theemployer contribution to health coverage continues to be excludiblefrom an employee's income, and it is not taxable. This reporting is forinformational purposes only, to show employees the value of their healthcare benefits.W-2 Reporting FAQs:www.irs.gov/uac/Employer-Provided-Health-Coverage-Informational-Reporting-Requirements:-Questions-and-Answershttp://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions30

90-Day Maximum Waiting Period• Beginning January 1, 2014 employers must limit health plancoverage waiting periods to a maximum of 90-days after anindividual has satisfied all other plan eligibility requirements• On March 19, 2013, HHS, DOL and IRS issued proposedregulations on the ninety-day waiting period limitation• The proposed regulations clarify that it is not permissible to delaycoverage until the first day of the month following completion ofa 90-day waiting period• Employers that wish to use a first day of the month or first dayof the payroll period as their enrollment date would need toapply a shorter waiting period to ensure that coverage wouldbecome effective on or before the 91st day31

2014 Workplace Wellness ProgramsFinal RuleFive Basic Non-Discrimination Requirements:1. Each participant must be given an opportunity to qualify for the rewardat least once a year;2. The reward must not exceed 30% of the total cost of employeecoverage under the plan (or 50% if the program is designed to addresstobacco use);3. The reward must be available to all similarly situated individuals, withreasonable alternatives for those who cannot meet the standard formedical reasons;4. The program must be designed to promote health or prevent diseaseand not be a subterfuge for discrimination; and5. The plan must disclose in all descriptive materials the possibility ofalternative methods for qualifying for the reward or of a waiver of theapplicable standard.www.dol.gov/ebsa/pdf/workplacewellnessstudyfinalrule.pdfSummary Source: HealthLawProf32

Medical Loss Ratio Rebate Guidance• If the entire cost of group health insurance coverage waspaid by the employer, the employer may retain the entirerebate.• If plan participants paid the entire cost of coverage thenthe full amount of the rebate will be attributable toparticipant contributions and would be allocated amongthem.• If participants and the employer shared in the cost ofcoverage, each would receive a portion of the rebatecommensurate with the portions of the premium paid bythem respectively.www.dol.gov/ebsa/newsroom/tr11-04.html33

Reporting Requirement EmployersOffering Self-Insured Plans• New information reporting requirements for issuers ofhealth insurance coverage – applies to employers ofany size that have self-insured health plans• First reports due 2015• The Internal Revenue Service (IRS) has not yet issuedproposed regulations explaining the details of therequirements34

`Forty Hours Is Full Time Act of 2013'• A pair of centrist senators introduced a bill Wednesdayto soften the employer mandate in President Obama'shealthcare law.• The healthcare law requires employers to offercoverage to employees who work more than 30 hoursper week. Some employers have said they will reduceworkers' hours to avoid the mandate.• Sens. Joe Donnelly (D-Ind.) and Susan Collins (R-Maine) proposed a bill to move the threshold to 40hours per week, saying the employer mandate shouldmatch the traditional definition of a full-time worker.http://thomas.loc.gov/cgi-bin/bdquery/z?d113:s70135






Sponsored By41


ResourcesHealthCare.govwww.healthcare.gov/Sign up for email updates from HealthCare.govwww.healthcare.gov/subscribeThe Kaiser Family Foundation (KFF)http://kff.org/health-reform/Sign up for Health Care Reform Updates from KFFhttp://profile.kff.org/

ResourcesU.S. Small Business Administration (SBA)www.sba.gov/IRS ACA Tax Provisionswww.irs.gov/uac/Affordable-Care-Act-Tax-ProvisionsU.S. Department of Laborwww.dol.gov/ebsa/healthreform/Proposed Rule: Minimum Value of Eligible Employer-SponsoredPlans and Other Rules Regarding the Health Insurance PremiumTax Creditwww.gpo.gov/fdsys/pkg/FR-2013-05-03/pdf/2013-10463.pdf44

ResourcesDOL Sample Notice of Coverage Options – health plan not offeredby employerwww.dol.gov/ebsa/pdf/FLSAwithoutplans.pdfDOL Sample Notice of Coverage Options – health plan offered byemployerwww.dol.gov/ebsa/pdf/FLSAwithplans.pdfSmall Business Health Options Program (SHOP) Health coverageapplication for employerswww.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/shop-employer-application-5-31-2013.pdf45

ResourcesSmall Business Health Options Program (SHOP) Health coverageapplication for employeeswww.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/shop-employee-application-5-31-2013.pdfEstablishment of Exchanges and Qualified Health Plans; SmallBusiness Health Options Program – Final Rulewww.gpo.gov/fdsys/pkg/FR-2013-06-04/pdf/2013-13149.pdf46

ResourcesEmployers with questions on the Medical Loss Ratio (MLR)Insurance Rebate can contact the Department of Labor's EmployeeBenefits Security Administration:Electronically www.askebsa.dol.gov/WebIntake/Home.aspxPhone 1-866-444-3272Guidance on Rebates for Group Health Plans Paid Pursuant to theMedical Loss Ratio Requirements of the Public Health Service Actwww.dol.gov/ebsa/newsroom/tr11-04.html47

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