Tag Archives: health care reform

Affordable Care Act from De Pere at Dawn!

Good Friday afternoon everyone!   Hope this week has treated you well.

Today I bring you my promised post from last week’s De Pere at Dawn.  Getting the video parsed down and uploaded was a process.  *long process*.  Unfortunately, we don’t have the full segment from Daren Allen, the final presenter because there was a video failure.  We had part of it, but decided not to post only that segment since it was jarring.

I will post this with each presenter’s identifying information and a link to their PowerPoint presentation as well as the video link at YouTube (except for Daren).  In a future post, I will link to an upcoming edition of Wisconsin Eye featuring a town hall with J.P. Wieski that will have the most current information.

Summary statement?  Wow was it a great great panel.  “Best ever” in the words of one of our guests.  With no further ado:

Introduction section  (Cheryl Detrick, President/CEO De Pere Area Chamber)

Overview from the State perspective (J.P. Wieski,  Legislative Liaison/Public Information Officer from the Office of the Commissioner of Insurance, State of Wisconsin)

Overview from business organization perspective (Lori Compas, Executive Director of the Wisconsin Business Alliance)

More details, yet still overview from insurer in Health Insurance Marketplace (David Grunke, Manager Strategic Accounts, WPS Health Insurance/Arise Health Plan)

And, MORE details, overview from insurer, Common Ground Healthcare Cooperative (Daren Allen, Vice President of Sales & Business Development for the Common Ground Healthcare Cooperative)

Long story short … on October 1st, go look. It will cost you nothing but a bit of time, may save you money and will satisfy your curiousity!

 

October 1st is Just 3 weeks away!

October 1st in 3 weeks away.

If you are furrowing your brow and wondering why you should care … well, if you provide, have or need health insurance, it is an important date.

First of all, the “exchanges” will be open for enrollment and we will have the rate information. For individuals, families, business owners and employers of all sizes shopping “apples to apples” (should) be available.  If you want more information, *lots* more information, we still have some room at tomorrow’s De Pere At Dawn event.  This panel is going to be epic. Our panels always are, but wow. The brain power & knowledge of J.P. Wieski (OCI, Wisconsin), Lori Compas (Wisconsin Business Alliance, David Grunke (WPS Health Insurance/Arise Health Plan) and Daren Allen (Common Ground Healthcare Cooperative) will be more than worth the 90 minutes.  LINK HERE

Second, since the Health Insurance Marketplace (a.k.a. “the exchanges”) will begin offering health insurance on January 1st, on October 1st employers must give notice to their employees about coverage options available through the marketplace with a separate notice sent to dependents and others on their health insurance.

  • The notice must information employees of the existence of the Marketplace in each state, what the services are to be provided by the Marketplace and how to contact the Marketplace
  • The employer must also provided information on their sponsored/provided health insurance, if any, and state the intent of the employer to meet the Employer Mandates requirements (if more than 50 FTE employees).
  • Also, the notice must explain that employees may lose the employer contributed amount toward health insurance (if that is what the employer chooses to do and if the employer does contribute toward health insurance).
  • Finally, the notice must inform the employee of the employee’s potential eligibility for a premium tax credit if the employee purchases insurance through the Marketplace.

There is some dispute as to whether this requirement is limited to only those employers with 500k or more in annual revenue.  To be safe?  I’d say send it out.  To be certain for *your* business?  Contact your broker, your tax guy and/or your lawyer.

Hot off the road … health care!

No!  Wait!!  Don’t leave…

Well, I’m recording this on my way back from Madison after attending Wisconsin Manufacturers and  Commerce’s healthcare event that I mentioned earlier this week.  My plan is to get this transcribed to have it post yet this week as I promised.  With tomorrow being a half day and starting the day with our Maximizing Your Chamber Membership session and then a meeting with the Green Bay CVB regarding Restaurant Week (news soon!!) after that … it is tonight or late.  So, tonight it is!  Next week I will post about consumer driven healthcare and then the healthcare cooperative.  Are you excited?

First thing I learned today: there are still a lot of questions for which we don’t have answers.  That seems to be a consistent theme of the discussion.  Next thing I learned is that if you are one of the millions of employers in the US and one of the hundreds of employers in our area who have less than 50 employees –  the affordable care act will not penalize you in any way at all.

Not that you don’t need to pay attention and not that you don’t need to understand the affordable care act and its ramifications; but, you will not be penalized so you don’t have to worry about that.  Feel better?  Good.  I have heard from so many of you in that bucket of folks who are very concerned, so I want to ease your mind.

If you have close to 50 employees, even if a good number of them are part-time, you need to pay closer attention. Yes, I’ll get to more about that in a little bit.  Next, if you do have 50 employees and already offer decent health insurance at a reasonable cost, you probably don’t have much to worry about either. Let me asterisk that by saying one of the big takeaways from today is you need to talk to your insurance broker. Let me say that again – you need to talk to your insurance broker – if you are at the 50 employees threshold, it just makes good sense to know what you’re looking at for next year and beyond.

For the purposes of health care reform, you are a large employer if you have 50 or more employees. I have to say that is the smallest number I have ever heard referred to as a “large employer” by a governmental entity – but it is important to know the definition. Having said that, I’m going to try to explain the calculation in as simple a way as I possibly can. If you are even close or think you might be close to the 50 employee threshold, again, please talk to your insurance broker.   Don’t wait, get on their calendar soon.

Here’s a calculation: let’s say you have 30 full-time employees.  By that I  mean they work consistently week-in and week-out full-time.  They may be salaried,  they may be hourly, but as long as they work more than 30 hours every week (or at least most weeks) they are a full-time employee. To that number you need to add full-time equivalent employees. How do you calculate that number?  Well, this is a different calculation than I have heard before, so I want to make sure you hear it as well.  Total all of your part-time employees’ hours for a month and divide that by 120.  The answer to the equation is your full-time equivalent number. If you add your full-time employees plus your FTE number together and find your number is more than 50 you need to talk to your insurance broker because you are likely subject to the provisions of the healthcare act as a large employer and could be subject to penalties.

By the way, that “50” number of full-time employees including your full-time equivalent employees is an average. So, if in one month you had 75 employees and the rest of the year you only had 20 employees you would not have 50 employees and would not fall subject to the rules.  There are lots of details regarding measurement periods, administrative periods and stability periods.  Talk-to-your-insurance-broker.   One more point: nothing in this law says that you have to offer health insurance to your part-time employees.  You only have to consider your part-time employees when it comes to calculating if you are subject to the 50 employee rule or not.  You will no more be required to offer your part-time employees health coverage after January 1, 2014, than you do today.

The next important component, if you are over the 50 employees level, is the insurance package you offer must be “affordable.”  Affordable is defined as costing no more than 9.5% of your employee’s income. The short version is this: if you have an expensive health plan and a number of employees who make minimum wage, or near minimum wage, you need to be concerned about the affordability component – otherwise it probably won’t apply. Having said that talk to your insurance broker.

Something else repeated today is regarding the rates that will be charged both through the exchanges as well as premiums for private insurance. The general consensus is that the rates will go down for companies who have a high number of older or less “well” employees and will go up for those companies have a higher number of younger or healthier employees.  The fear is the exchanges will be “dumping grounds” for those who can’t get insurance elsewhere.  No one knows what those rates will be here in the state of Wisconsin.  As I mentioned earlier this week, only the states doing exchanges themselves have a sense of what their premiums will be, and at this point we’ve only heard details from California (and to some extent Washington and Oregon).  The news from California regarding premiums on their exchange have been positive.  We have our fingers crossed that we will hear similar news when our rates are announced here in Wisconsin.

A couple of other important notes that stood out to me:

First, the only people who will be eligible to buy insurance on the exchanges and receive subsidies from the federal government are those individuals who either have no insurance option at all through their employer or those who don’t have an “affordable” insurance option that also meets the “minimum essential coverage” requirements through their employer and make between 100% and 400% of the federal poverty level.   (Yes … yet another item to talk to your insurance broker about!)

Second, if you are one of the employers I mentioned who have more than 50 employees and do not offer an “affordable” option for your employees, you will be subject to what is called a “Pay or Play” penalty that will cost $2000–3000 per employee.  Please refer to my ongoing theme: if you have 50 or near 50 employees, you need to talk to your insurance broker.

The exchanges/cooperatives are to begin taking enrollments October 1 and then begin operation on January 1, 2014.  There was also conversation today on whether all of this will happen on the schedule as outlined. Here is the long and short answer: probably.  The general consensus is that a delay will only happen if an “operable” exchange is not in place in the state of Wisconsin.  “Operable” was defined as 71 of 72 counties in the state having coverage under an exchange available.  From what we heard today that will happen.

As I mentioned earlier this week, Common Ground Healthcare Cooperative will offer products in the counties that we serve.  We also learned that there were at least two health insurance companies that submitted rates at the end of April that will also serve our area for the exchange.  On the insurance panel today were representatives from both Humana and United Healthcare.  Humana indicated they have submitted rates for the individual exchange but not the small employer exchange. United Healthcare was not able to answer if they would be in the exchanges in Wisconsin at all.  It is a big decision for an insurance company to decide given the number of unknowns. However, given United Healthcare is not involved in the California exchange, it is a likely scenario United will not be involved in the exchange for Wisconsin either, at least not initially.

So that’s it from today.  You would think from a four hour meeting I would have more information!  However, the reality is we just don’t know all of the answers yet.  Next Wednesday I will be going down to Milwaukee for an informational meeting of the Common Ground Healthcare Cooperative.  When I return from there I will have more information regarding what that may mean for you and your family as well as potentially for your employees. At the very least, it will be another option.

Finally – no one took me up on my offer of car-pooling to Madison.  Trust me, I didn’t take it personally!  I know it’s hard to take a half day out at a busy schedule especially when you don’t know if you will hear anything that you can actually use.  It is still pretty early in the process.  The second Wednesday of October we will be holding a session that will give a lot more information. We will have detailed information by that time as the exchanges will be taking applications.  We plan to have a representative from the office of the Commissioner of Insurance, someone from WPS Health Insurance/Arise Health Plan as well as the Common Ground Healthcare Cooperative on hand to give information and answer questions. A lot more detail on the event to come, I promise.

I filled a good portion of the drive by listening to Olympia Snowe’s new book, “Fighting for Common Ground: How We Can Fix the Stalemate in Congress” on Audible via my iPhone.  In my post last week I was talking about Cassie Schuh’s reading list from our leadership session in May, I mentioned that I was planning to listen to some of those books.  So far, I would really add this book to that list.  I would say it is for anyone interested in the way our Congress is working (or not working as the case really is), anyone who has a political interest or just interested in the way things are happening (or not happening) in Washington.  If any of you have read it or plan on reading I’d love to hear your thoughts on it as well.

On tap this week – health care

Yes, I hear the groaning.  While the last several years have been punctuated by the “health care debate,” the rubber begins to hit the road over the next 7 months.  Many of the components of the Affordable Care Act are already in place (timeline here) but in 2014 is the 800 pound gorilla – the arrival of the health care (insurance) exchanges for individuals.  They will technically begin operation on October 1st of this year, according to www.healthaffairs.orgStarting in October 2013, people without access to coverage through an employer, Medicaid, or the Children’s Health Insurance Program will be able to purchase health plans through health insurance exchanges for coverage taking effect in 2014. These new marketplaces are one of the Affordable Care Act’s key mechanisms for expanding affordable coverage.  

This Thursday, June 6th, I will be attending an educational session sponsored by Wisconsin Manufacturers and Commerce, “Preparing for the New Normal Part 2:  Implementing the Affordable Care Act in Madison.  If anyone would like to attend and carpool, please let me know.  There is a $50 fee per attendee (link is the title), the ride will cost you nothing except 5 hours in the car with me!

However, according to an article in USA Today on May 30th, “Seventeen states and the District of Columbia have received HHS approval to create their own exchanges, and 15 states will work with HHS to run a marketplace, while the 19 remaining states will operate exchanges created for them by the federal government. Many states, particularly those with Republican legislatures and governors opposed to President Obama’s health care law, did not create exchanges.”  (Wisconsin was one of the states to not create an exchange.)  “Beginning in October, individuals will be able to do a side-by-side comparison of plans either through online state or federal exchanges. Insurers will not be able to charge more for or exclude those who have pre-existing conditions.

Insurers have submitted proposed pricing and plans, and, in the states that have released that data, there is a large variety of pricing. California’s premiums came in 50% lower than what had been projected, and in Washington and Oregon, people will pay less for premiums on the individual market than they did before the law, also called the Affordable Care Act.”

While we don’t know what the exchange will look like in Wisconsin, there was an additional option in the legislation: healthcare cooperatives.  The new cooperatives are an option that came out of the debate for “a public option” during the national discussion on this topic.

More from Healthaffairs.org: “The provision created what was originally a $6 billion federal fund–reduced by law in 2011 to $3.4 billion, and reduced again in January 2013 as described below–that would enable sponsoring organizations to apply for loans to create new health insurance cooperatives.

These nonprofit, consumer-driven organizations would offer health coverage–and possibly also care networks–through the exchanges under the same regulatory requirements imposed on private insurance companies at the state and federal level. The provision was incorporated into health reform legislation in the Senate, and became law when the Affordable Care Act was signed by President Barack Obama in March 2010. Under Section 1322 of the Affordable Care Act, CO-OPs will offer coverage through the exchanges primarily in the small-group market, which generally serves companies or organizations with fewer than 100 full-time employees, and in the individual market. Like other plans offered through the exchanges, CO-OPs must be ready for open enrollment beginning October 1, 2013. The law required the Department of Health and Human Services (HHS) to distribute funds to at least one CO-OP in each state. But because of the most recent funding cuts, no more new CO-OPs will be established beyond the 24 that have already been created, at least for now (Exhibit 1).”

"Health Policy Brief: The CO-OP Health Insurance Program," Health Affairs, February 28, 2013.2013.http://www.healthaffairs.org/healthpolicybriefs/

“Health Policy Brief: The CO-OP Health Insurance Program,” Health Affairs, February 28, 2013.2013.http://www.healthaffairs.org/healthpolicybriefs/

 

Wisconsin got one of the loans.  The Common Ground Healthcare Cooperativebased in Milwaukee, will serve individuals and small employers in Brown, Calumet, Door, Fond du Lac, Kenosha, Kewaunee, Manitowoc, Marinette, Milwaukee, Oconto, Outagamie, Ozaukee, Racine, Shawano, Sheboygan, Walworth, Washington, Waukesha, and Winnebago counties and any individual, non-profit or small business will become a member when they purchase health insurance through Common Ground Healthcare Cooperative..  There are, in fact, health care cooperatives already in Wisconsin, but this is not a purchasing cooperative, but rather an actual insurance company.   In answer to the question, “why will this work when similar concepts have failed?” According to their website, “Unlike other initiatives for small employers and individuals, Common Ground Healthcare Cooperative will not be contracting with an existing for-profit health insurance company to buy insurance and create a purchasing pool. Common Ground Healthcare Cooperative will be the insurance carrier and with its non-profit, member governed structure, Common Ground Healthcare Cooperative will provide quality plans that are affordable, coordinated, and responsive. Common Ground Healthcare Cooperative leaders have a strong vision for improving the health of members and for controlling the health care costs of its members which are the key factors to control premiums.”   Open enrollment will begin October 1, 2013 and coverage will become effective January 1, 2014. Enrollment will be continuous throughout the year so prospective members can enroll on January 1, 2014 or after.    The cooperative has been and will be holding education seminars.  The seminars are designed for individuals (under 65) without insurance, self-employed individuals, small business owners and nonprofit leaders. Topics for discussion include the new insurance  marketplace (exchange), subsidies for purchasing insurance, the individual mandate and other important issues. Each seminar is identical.  

I will be attending the June 12th session in Milwaukee and extend the same carpool offer as above.   I can’t find a fee for the session and the ride with me would be no cost (other than 4 hours in the car with me!).

I will report back here on what I learn and my thoughts if you can’t attend yourself (or just can’t bear to!).  Whether you plan to attend one of these sessions, or the one we will hold in the fall, I hope you will get yourself educated.  This is vital to you individually, your family and your employees.  Stay tuned…

 

Results of election 2012: economic outlook

This morning’s De Pere at Dawn was a great panel of  William Lepley, Associate Professor of Finance, School of Business Administration, University of Wisconsin, Green Bay; Wendy Scattergood, Assistant Professor of Political Science, St Norbert College; and Kevin Quinn, Associate Academic Dean and Professor of Economics, St. Norbert College discussed the economic outlook for the next bit of time based on the results of the election.  It was fun, fascinating and informative plus we gleaned a few tidbits about our panelists too!

So — from my notes!

Wendy Scattergood led off discussing the policy side of the election.  This just in … Wisconsin is a swing state.  Shocked.  You’re shocked aren’t you??  If you were like me (and admittedly I’m a bit of a wonk so I just *may* have followed all of this a bit too closely for my own mental health), but you were probably under the impression the “white male” voter was a staunch Republican and the “over 65” demographic was Democratic.  WRONG!!  Those white male voters, largely 65 and over, college degree holding and living in the suburbs are switch-voters and just slightly more Republican.  And the 65+ demographic?  Welll .. in 2004, they voted largely Democratic; in 2008 they were split and in 2012 they were the only age demographic carried by the Republican Presidential ticket.  The 30-44 year old demo was largely split.  Minority voters were more Democratic and it was the first time in Wisconsin for minorities to be enough of a block to swing an election.  Some other wonk-y things of note:  Urban (large cities) voted Democratic; mid-size cities (Green Bay/Appleton) voted Democratic and suburbs & rural voted Republican.  In state legislative races, redistricting was viewed as a factor, but not the only factor.  The reality of legislative races in Wisconsin is we know our legislators and vote based on knowing them – not their party affiliation.

You may have noticed Wisconsin has an electoral split-personality of sorts.  At the federal level, Wisconsin elected Democrats Barack Obama and Tammy Baldwin and at the state level gave both houses of the legislature to the Republicans. The other new factor in Wisconsin is the “straight party” voting option no longer exists (and you may not have noticed this on your ballot).   The theory is that with that off the top of the ballot, voters chose by individual in the “down tickets” races and party affiliation, as a blanket, was removed from the equation for voting.

Dr. Scattergood also shared the perspective that 2010 was a case of “retrospective voting,” where the voters look at the economy as they felt it at that time, said “no,” and changed directions.  She also talked briefly about the Friday deadline for Wisconsin to decide if the state will set up the health care exchange or let the federal government do so.  The feeling was Wisconsin will design its own.

Fun fact about Wendy – she is a cellist and plays with the Manitowoc Symphony as her great escape!

Dr. Kevin Quinn was next up and is not only an interesting economist with a great sense of humor, but was fascinatingly understandable too!  With a quick nod to Europe’s past and current problems (Greece, Spain, Ireland, Italy…) He started with the old adage of “In war, truth is the first casualty,” (Aeschylus Greek tragic dramatist 525-456 B.C.) expanding it include the new old adage that in politics, like war, truth is the first casualty; but when it comes to economics in politics they don’t just lie, they make things up.    Kevin shared that really, the Great Recession of 2008, really had its beginnings much earlier in the decade and became very visible in 2005-2007 when all the growth was in the housing sector and that, “turned out to be illusory.”

ed note: my favorite word of the day!  Illusory (adjective):  causing illusion, deceptive; misleading.  Of the nature of an illusion; unreal.  I love college professors!

Dr. Quinn then talked about the “fiscal cliff,” which he believes we will look back on as this year’s Y2K panic.  He reminded us that over about the last decade, the US has run up a debt of about $15 trillion (FYI that is 15,000,000,000.00 and is the first time, in round numbers, since World War II that our debt has equaled our GDP), about a trillion to China and most to ourselves (2 wars, drug benefit for medicare and tax cuts).  He summed it up that we lowered our income while we increased our spending then put a very large bandage on a very hairy part of our National anatomy and the time has come to pull it off!  When is that time?  Well, approximately January, but then the debt ceiling conversation is due again in February/March.  Kevin is optimistic that, in the end, we will resolve this issue nationally and the hand-wringing will be largely much ado about nothing.  He does think there is a chance we will go “off the cliff,” but will do so attached to a bungie cord and bounce back up.

Bill Lepley reminded us of all the things that were not the fault of bankers!  (Much to the delight of our bankers in attendance!!)   He talked about the health care legislation, a/k/a the Patient Protection and Affordable Care Act or Obamacare, as well as the Dodd/Frank Act that are both now laws-for-certain and not for-maybe-until-Inauguration Day.  Interestingly, he described Dodd/Frank as a framework of “we want to look like …” and then pushing it to the regulatory authorities to write the law.   That said, with certainty, we will all now move forward.

Fun factoid about Bill!  Not only does he LOVE baseball (only 5 1/2 months until baseball season!), but he plays too!

After a question regarding the health care implementation and would it be an increase or drag on the national economy, the panel talked about the long-term result of the health care changes. First that providers will be paid more on quality therefore likely seeing a much greater use of “evidenced-based” medicine.  This lead to a bit of a discussion that paying doctors for the health results of their patients is often viewed with the same eyes as paying teachers for the test scores of their students.  (a discussion that fascinates me!)  The other synopsis is that the most likely positive is that we will see a lowering in the rate of increase of health care costs.  Did you follow that bouncing ball?  Costs won’t go up as much.  Not a great slogan true, but sounds like could be real money. 

All in all, even if I couldn’t get Bill to bite on giving his stock market response prediction … it was a fascinating morning and I’m very appreciative to our panelists for their time, talents and humor and to their institutions for loaning them to us for the morning!

 

 

 

Small businesses & health insurance

If you are  small businesses, with fewer than 25 full-time workers, pay average annual wages below $50,000, and provide health insurance while covering at least 50% of the premium cost you are probably eligible for a tax credit under the recently passed health care reform legislation.

An eligible small business could qualify for a tax credit of up to 35% of premiums paid in 2010.  With the cost of health insurance, that could be significant!

Go to this link at irs.gov for more information.  Additionally, Senator Feingold’s office has created a small business tax credit calculator to give you an idea of the credit amount for your business.  Click HERE to get to it.

Health Care Reform Legislation- 2017

Our friends at Hawkins, Ash, Baptie & Company, Tax Advisors & CPA’s have published a great chart showing the impacts of the health care reform legislation.

Today’s focus: 2017 – Whew!  This is the last piece!

States may elect to allow large employers (more than 100 employees) to purchase coverage through their exchanges.

——–

That concludes the information provided as of now.  If it changes, I’ll let you know with an update.  It was a massive piece of legislation and will effect every single one of us.  No matter what anyone believes about the final product, we can all agree the system, without change – and big change, was unsustainable and was unavailable to far too many Americans.

One of my former government & public policy professors told me that the hallmark of a good piece of legislation is when everyone walks away from the table a little ticked off.  We shall see if he was prophetic as it relates to this piece of law!

Health Care Reform Legislation- 2014

Our friends at Hawkins, Ash, Baptie & Company, Tax Advisors & CPA’s have published a great chart showing the impacts of the health care reform legislation.

Today’s focus: 2014

The individual mandate requirement to purchase health insurance for all citizens and legal residents takes effect.  All employer plans, including self-insured plans, will have to provide documentation of coverage to all covered employees and their dependents and the IRS. The penalty structure for noncompliance to either a flat dollar amount per person or a percentage of the individual’s income, whichever is higher. In 2014, the percentage of income determining the fine amount would be 1%, then 2% in 2015, with the maximum fine of 2.5% of taxable (gross) household income capped at the average family bronze‐level insurance premium . The alternative is a fixed dollar amount that phases in beginning with $325 per person in 2015 to $695 in 2016.

The employer responsibility requirements take effect for companies that employ more than 50 FTEs (with no exemption for seasonal workers). Under current law, if an employer does not provide coverage and one or more employee receives a premium assistance tax credit to buy coverage through the exchange, the employers must pay a fine of $750 per year for each full time employee. Coverage must meet the essential benefits requirements in order to be considered compliant with the mandate.

An employer with more than 50 employees that does offer coverage but has at least one FTE receiving the premium assistance tax credit will pay the lesser of $3,000 for each of those employees receiving a tax credit or $750 for each of their full‐time employees total.

An individual with family income up to 400% of FPL is eligible for a premium assistance tax credit if the actuarial value of the employer’s coverage is less than 60% or the employer requires the employee to contribute more than 9.8% of the employee’s family income toward the cost of coverage.

When enacted, the reconciliation package increased the fine from $750 to $2000, but exempts the first 30 employees from the fine (i.e., if the employer has 51 employees and doesn’t provide coverage, the employer pays the fine for 21 employees). However, when determining whether an employer has 50 employees, both for the purposes of the fine and the responsibility requirements generally,  calculation of employees was changed so that part‐time employees must be taken into consideration based on aggregate number of hours of service.
It also revised the small employer exception to exempt all employers with 50 or fewer FTEs . The contribution threshold that makes an individual eligible for a premium assistance tax credit from 9.8% to 9.5%. For employers that have a waiting period for coverage for new employees, under current law if they have a waiting period of more than 60 days they will have to pay a $600 per FTE employee fine. Waiting periods of more than 90 days are prohibited and is extended to grandfathered plans.

All of the market reforms for all individual market and fully‐insured group markets take effect. All plans must be offered on a guarantee issue basis, preexisting condition limitations are prohibited, annual and lifetime limits will be fully prohibited, and the size of a small employer group will be redefined to 1‐100 employees (although states may elect to keep the size of a small groups at 50 employees until 2016). In addition, all fully insured individual and small groups up to 100 employees (and any larger groups purchasing coverage through an exchange) will have to abide by strict modified community rating standards with premium variations only allowed for age (3:1), tobacco use (1.5:1), family composition and geographic regions to be defined by the
states and experience rating would be prohibited. Wellness discounts will be allowed for group plans under specific circumstances. The lifetime and annual benefit limit prohibitions were extended  to grandfathered plans.

States are required to have their exchanges up and running. Each state can have a separate exchange for employers and individuals or merge their exchanges to include both markets. States can also apply for a waiver on their exchange design from DHHS, and currently operational state exchanges are exempt.

The standards for qualified coverage, which will apply to all fully insured group and individual products to be sold both inside and outside the exchanges, begin. The essential benefit standards will also used to determine if large employer coverage is sufficient enough relative to the employer responsibility requirements. The essential benefit standards include specific mandated benefits, cost‐sharing requirements, out-of‐ pocket limits and a minimum actuarial value of 60%. They also allow for catastrophic‐only policies for those 30 and younger.

The employee free choice voucher program takes effect. It requires employers that provides and contributes to health coverage to give vouchers to each employee who is required to contribute between 8% and 9.8% of their household income (indexed to the premium growth rate) toward the cost of coverage, if such employee’s household income is less than 400% of FPL and the employee does not enroll in a health plan sponsored by the employer. The value of vouchers would be adjusted for age, and the vouchers would be used in the exchanges to purchase coverage that would otherwise be unsubsidized. The employee can also keep amounts of the voucher in excess of the cost of coverage elected in an exchange without being taxed on the excess amount. The
amount of the voucher must be equal to the amount the employer would have provided toward such employee’s coverage (individual vs. family based on the coverage the employee elects through the exchange) with respect to the plan to which the employer pays the largest portion of the cost.

Employers of 200 or more employees will have to auto‐enroll all new employees into any available employer‐sponsored health insurance plan. Waiting periods in existing law can apply. Employees may opt out if they have another source of coverage. Important note: The effective date of this provision is unclear and may be determined via regulation to take effect earlier.

Employer‐sponsored wellness program rules for all employer‐group plans under HIPAA improve and employers can increase the value of workplace wellness incentives up to 30% of premiums with DHHS discretion to increase the incentives to 50%. In addition, a 10‐state pilot program to extend wellness programs to the individual market begins, with the potential expansion to the entire individual market in 2017.

Cooperative plans will be allowed to be sold. Multistate national plans will be offered to individual and small employers through the state‐based exchanges.

Premium assistance tax credits for individuals and families making up to 400% of FPL begin. These subsidies are available only for individual coverage purchased through the exchange, not employer‐sponsored coverage.

Expansion of the Medicaid program for all individuals, including childless adults, making up to 133% of the FPL begins. Mandatory state‐by‐state employer premium assistance programs begin for those eligible individuals who have access to qualified employersponsored coverage. States can also create a separate non‐Medicaid plan for those with incomes between 133‐200% of FPL that do not have access to employer‐sponsored coverage.

Under current law premium taxes on most private health insurers based on premium volume take effect, which can be passed directly down to fully‐insured plan consumers. This tax does NOT apply to self‐insured plans, governmental entities (other than those providing insurance through the Act’s community health insurance option), certain nonprofit insurers of last resort, and certain nonprofit insurers with a medical loss ratio of 90 percent or more.  

Tomorrow:  2015