First National Bank Alaska · OTC:FBAK
First National Bank Alaska — Alliant Employee Benefits — Investor Presentation (June 2013)
99 slides from First National Bank Alaska's investor presentation, Jun 12, 2013
Slide 1: Healthcare Reform 101
HEALTHCARE REFORM 101 The basics and beyond Presented by Amy Fossum, SVP Alliant Employee Benefits June 12, 2013
Slide 2: Agenda
AGENDA Healthcare Reform Why – What – Who Overview Strategy Interactive Timeline Grandfathered plans Summary of benefits Individual mandate Dependent coverage and coverage (SBC) Exchanges through age 25 Taxes & Fees Pay or Play Preventive coverage W-2 reporting Coverage
Slide 3: The Need for Change
THE NEED FOR CHANGE mMlhant EMPLOYEE BENEFITS U.S. Healthcare Costs Per Capita Dollars 8,417 8,680 7,922 8,163 7,636 7,255 6,875 6,497 6,121 5,695 5,240 4,878 | | 2000 §=2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Centers for Medicare and Medicaid Services
Slide 4: What Is Driving Health Care Spending?
WHAT IS DRIVING HEALTH CARE SPENDING? What is driving health care spending? While there is broad agreement that the rise in costs must be controlled, there is disagreement over the driving factors. Some of the major factors that have been discussed in cost growth are: Technology and prescription
Slide 5: What Is Driving Health Care Spending?
WHAT IS DRIVING HEALTH CARE SPENDING? 5
Slide 6: What Is Driving Health Care Spending?
WHAT IS DRIVING HEALTH CARE SPENDING? 6
Slide 7: The Bill and Amendments
THE BILL AND AMENDMENTS I’m Just a Bill 7
Slide 8: Impact on Employers
IMPACT ON EMPLOYERS Very small groups under 25 lives Small groups under 50 lives Large group 50+ 8
Slide 9: Small Group Market
SMALL GROUP MARKET mMlhant EMPLOYEE BENEFITS vay The recently enacted Patient Protection and Affordable Care Act could earn you a new tax credit this year IRS for providing health insurance for your employees lf your small business or tax-exempt organization pays employee health insurance premiums i
Slide 10: Small Group Market
SMALL GROUP MARKET On average, small businesses pay about 18% more than large firms for the same health insurance policy. And small businesses lack the purchasing power that larger employers have If you have fewer than 25 employees, pay average annual wages below $50,000, and provide health insu
Slide 11: Small Group Market
SMALL GROUP MARKET What You Need to Know about the Small Business Health Care Tax Credit To be eligible, you must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees. You must also have fewer than 25 full-time equivalent employees (FTEs). Th
Slide 12: Healthcare Reform - Why
HEALTHCARE REFORM - WHY Require health insurance Larger employers must offer comprehensive, affordable coverage Improve access to Create healthcare Exchanges healthcare No pre-existing conditions Coverage becomes guarantee issue Dependent coverage through age 25 No cost preventive care
Slide 13: Healthcare Reform - What
HEALTHCARE REFORM- WHAT Healthcare Exchanges No limits on Essential Health Benefits No pre-existing conditions Coverage must be Minimum Value (60%) Guaranteed issue coverage Improved preventive/women’s healthcare No rescission of coverage Limit waiting periods – benefits begin by 91
Slide 14: Healthcare Reform - Who
HEALTHCARE REFORM - WHO • Issues regulations • Healthcare Estimated & rules; Fed Govt. • Employers Pay or Play enforces • State Govt. Option to Individuals 30+ million Providers Penalties compliance expand new insured Medicaid • Most individuals • Benefit • Federal coverage required to mandates • Hi
Slide 15: Healthcare Reform - Overview (2010-2011)
HEALTHCARE REFORM - OVERVIEW 2010 2010, cont. Affordable Care Act passed on Young adult (through age 25) March 23, 2010 allowed to stay on parent’s plan Coverage expansion begins almost Grandfathered not req’d to offer immediately: if access to other group Grandfathered plans GF coverage
Slide 16: Healthcare Reform - Overview (2012-2013)
HEALTHCARE REFORM - OVERVIEW 2012 2013, cont. Accountable Care Medicare Tax increase from Organizations (ACOs) 1.45% to 2.35% (higher wage introduced earners) First MLR rebates issued Comparative Effectiveness Fee Plans must provide Summary of (PCORI) due 7/31/13 Benefit Coverage (SBC) $
Slide 17: Healthcare Reform - Overview (2014)
HEALTHCARE REFORM - OVERVIEW 2014 2014, cont. Individual Mandate Pay or Play Most required to have health Large Employers (50+) must insurance or penalty is: offer Minimum Essential 2014: greater of up to Coverage that is Affordable and $285/family or 1% of family provides a Minimum Value
Slide 18: Healthcare Reform - Overview (2014-2018)
HEALTHCARE REFORM - OVERVIEW 2014, cont. 2018 No pre-existing conditions Cadillac tax Coverage for clinical trials 40% tax on plan premiums Specific criteria will apply >$10,200/individual or Details pending $27,500/family Update SBC Include statement about Affordable, Higher limit
Slide 19: Healthcare Reform Strategy: Will employers drop coverage?
HEALTHCARE REFORM STRATEGY Will employers drop coverage? Still Covered? A recent International Foundation of Although penalties are well below the average employer Employee Benefit Plans survey, conducted in December 2012, showed cost of medical coverage, less than 5% of employers are that less than
Slide 20: Why will most employers choose to play?
HEALTHCARE REFORM STRATEGY Why will most employers choose to play? Dropping coverage competitive disadvantage increase pay to offset Cost challenges: Comparable Exchange based coverage more costly Adverse selection Higher cost of admin for individual policies Hard dollar Age-bands for ol
Slide 21: Cost containment approaches
HEALTHCARE REFORM STRATEGY Cost containment approaches • Add new “compliant” Conservative Moderate Aggressive lower cost plan as default plan • Leaner benefit levels (i.e. deductibles, copays, • Use permissible wellness • Design plans or coinsurance, out of surcharges to increase contributions to in
Slide 22: Reform Review Tool
HEALTHCARE REFORM STRATEGY Reform Review Tool Tool to review your plans and administrative procedures against the major ACA employer requirements including: Pay or Play Plan coverage levels Administrative processes Taxes and fees Tool to document Administrative elections (e.g., Measuri
Slide 23: ACA Timeline
ACA TIMELINE Pending Issues Automatic enrollment Non-discrimination testing 2014 & Beyond Individual mandate Exchanges 2011 2012 2013 Essential Health Benefits Medical loss ratio Summary of benefits an Flexible spending accounts Out-of-Pocket & Deductib Over-the-counter d coverag
Slide 24: Grandfathered Health Plans
GRANDFATHERED HEALTH PLANS What Grandfathered health plans are not required to comply with all ACA mandates GF Who Plans that established and have maintained grandfather status since March 23, 2010 Must have continuously covered someone since March How 23, 2010. Make limited, allowed plan change
Slide 25: Grandfathered Plans
GRANDFATHERED PLANS How can a grandfathered health plan lose its status? Significantly cut benefits Change insurance carriers before Increase out-of pocket costs 11/07/10 Reduce employer contribution towards the cost of the plan A plan may enhance its coverage or add options without jeopardi
Slide 26: Grandfathered Plans
GRANDFATHERED PLANS ACA Mandates that do not apply to Grandfathered Plans: Any provider designated as PCP Direct access to OB/GYN Access to out-of-network emergency services Coverage for clinical trials 100% preventive care coverage Including women’s preventive Non-discrimination for f
Slide 27: Dependent Coverage Through Age 25
DEPENDENT COVERAGE THROUGH AGE 25 What Plans must cover children through age 25 Who Any group health plan that covers dependent children Only requirement is relationship between child and How subscriber Marital, student, residency or tax dependency doesn’t matter Plan years starting September
Slide 28: Preventive Coverage
PREVENTIVE COVERAGE What Plans must cover preventive care services with no cost- sharing this includes women's preventive healthcare services Who GF Group health plans How Covered with no cost sharing: deductibles copayments coinsurance any other payments Plan years starting September 23,
Slide 29: Preventive Coverage
PREVENTIVE COVERAGE What is included under preventive care? Immunizations Evidence-informed preventive Well-woman visits care Contraception* Support for breastfeeding Domestic violence screening* equipment* * Women’s preventive care is effective for plan years on or after August 1, 2012.
Slide 30: No Rescission of Coverage
NO RESCISSION OF COVERAGE What Cannot retroactively cancel coverage (generally) Who Group health plans How 30-day notice required Retroactive cancellation allowed ONLY for: Fraud or intentional misrepresentation IF contract provision specifically allows Failure to pay required premiums or co
Slide 31: Medical Loss Ratio
MEDICAL LOSS RATIO What For every dollar in premiums Large groups: 85¢ spent on claims and other medical expenses Small groups: 80¢ spent on claims and other medical expenses Insurer must refund any difference to employers MLR Claims amounts to improve healthcare quality (total premiums certain
Slide 32: Medical Loss Ratio
MEDICAL LOSS RATIO Example: Giant Insurance Co. has $900MM in claims and $100MM in health quality expenses. Total premiums were $1.2B; no taxes or fees Giant’s MLR = $900MM+$100MM)/ $1.2B = 83.33% Giant owes the difference between the 85% and the 83.33% they actually spent Rebates must be prov
Slide 33: Medical Loss Ratio
MEDICAL LOSS RATIO ERISA (e.g., private Non-ERISA Non-ERISA, non- employer) governmental plan governmental plan (e.g., (e.g., city or county) some church plans) Reduce Yes Yes Yes, if insurer and employer participant Fiduciary decision Must be used to agree in writing to the use premiums whether
Slide 34: Medical Loss Ratio
MEDICAL LOSS RATIO ERISA (e.g., private Non-ERISA Non-ERISA, non- employer) governmental plan governmental plan (e.g., (e.g., city or county) some church plans) Provide benefit Yes Not specifically Not specifically allowed enhancements? allowed Return in cash Yes Yes Yes, if insurer and to participa
Slide 35: Summary of Benefits and Coverage (SBC)
SUMMARY OF BENEFITS AND COVERAGE (SBC) What Health insurers and self-insured group health plans are required to provide a SBC to all individuals eligible to enroll in a group health plan including: Mid-year enrollees Qualifying event enrollees Upon request Open enrollment Fully-insured and s
Slide 36: Summary of Benefits and Coverage (SBC)
SUMMARY OF BENEFITS AND COVERAGE (SBC) SBC Requirements Be no more than four double-sided Be printed in 12-point font pages Include consumer costs examples Use terms most people understand based on the specific plan’s (including a glossary) benefits Include description of coverage List c
Slide 37: Summary of Benefits and Coverage (SBC)
SUMMARY OF BENEFITS AND COVERAGE (SBC) What plans require an SBC? Generally required for any group health plan, some ? exceptions exist Excepted benefits do not need an SBC A group health plan is any employer-sponsored plan that provides medical care to employees directly or through insurance, r
Slide 38: Summary of Benefits and Coverage
SUMMARY OF BENEFITS AND COVERAGE Benefit Type Do SBC Rules Apply? Comments Dental Plan Usually not — Many dental plans are an Coverage must be limited to treatment excepted benefit under HIPAA of the mouth Health FSA Usually not — Most Health FSAs are Excepted benefits test for Health FSAs excep
Slide 39: Summary of Benefits and Coverage
SUMMARY OF BENEFITS AND COVERAGE Benefit Type Do SBC Rules Apply? Comments HRA Generally yes — An HRA generally is Final regulations provide that a "stand- a group health plan and usually the alone" HRA must satisfy the SBC rules. HRA is not an excepted benefit However, an HRA that is integrated
Slide 40: Patient Centered Outcomes Research Fee
PATIENT CENTERED OUTCOMES RESEARCH FEE What Also known as the Comparative Effectiveness Fee, will fund a private, non-profit corporation is to assist providers, payers and policy makers in making informed health decisions. Both self-funded medical plans and health insurance Who carriers $1 multipl
Slide 41: Reinsurance Fees
REINSURANCE FEES What TPAs of group health plans and insurers are required to contribute to a temporary reinsurance program for the individual market to offset risk of high-cost claims (in effect shifting risk from insurers to reinsurers) Who TPAs and insurance carriers TPAs and insurance carriers a
Slide 42: Annual Fees for Insurance Carriers
ANNUAL FEES FOR INSURANCE CARRIERS What Annual fee on covered entities that provide health insurance Who Fully-insured plans No guidance yet on how fee is calculated or collected How Insurance carriers likely to pass it along to policyholders Likely significant variation in how fees applied
Slide 43: Medicare Part D Subsidy Taxable
MEDICARE PART D SUBSIDY TAXABLE What Previously employers could subtract the cost of providing retiree prescription drug benefits, plus collect a subsidy (in effect, getting a deduction for expenses they did not actually pay) Who Employers receiving Medicare Part D subsidy How Starting in 2013, empl
Slide 44: W-2 Reporting
W-2 REPORTING What Value of applicable employer-sponsored group health plan coverage is reported on employee's W-2 Form Employers that distribute ≥ 250 W-2s for the previous tax Who year including: Private employers Federal, state and local government entities Churches and other religious orga
Slide 45: W-2 Reporting
W-2 REPORTING How does this rule apply to control groups? ? In a controlled group, each employer is considered separately (i.e., aggregation rules don’t apply). Will employees get taxed on the amount reported? ? No. W-2 reporting is done for informational purposes only. An amount is not taxable simp
Slide 46: W-2 Reporting – Cost of Coverage
W-2 REPORTING – COST OF COVERAGE $ Employee Employer Cost of contribution contribution coverage Cost of coverage is determined on a month by month, employee-by-employee basis Employer Employer can select between three methods to calculate cost of Action! coverage: 1) COBRA Applicable Premium – Repor
Slide 47: W-2 Reporting – Coverage Exceptions
W-2 REPORTING – COVERAGE EXCEPTIONS Coverage Discussion of exception Archer MSA with employer contributions COBRA coverage Employer has option to report cost of COBRA coverage. However, employer must be consistent under that plan (either including or not including the cost of such COBRA coverage). D
Slide 48: W-2 Reporting – Coverage Exceptions
W-2 REPORTING – COVERAGE EXCEPTIONS Coverage Discussion of exception EAP (employee Excluded if not a group health plan or assistance program) – if a group health plan but no premium charged under in some circumstances COBRA Excepted benefits Includes: Coverage only for accident, or disability
Slide 49: W-2 Reporting – Coverage Exceptions
W-2 REPORTING – COVERAGE EXCEPTIONS Coverage Discussion of exception Health FSA – with employer Rule applies if benefit under Health FSA > contributions or flex credits employee's contribution for the year. If so W-2 Health FSA Employee reportable benefit contribution amount Health FSA – with only
Slide 50: W-2 Reporting – Coverage Exceptions
W-2 REPORTING – COVERAGE EXCEPTIONS Coverage Discussion of Exception Hospital indemnity – Includes coverage that pays a fixed amount (e.g., generally, if paid for on $200 per day of hospitalization) after-tax basis and not Excluded if: coordinated with other paid for on an after-tax basis; and cov
Slide 51: W-2 Reporting – Coverage Exceptions
W-2 REPORTING – COVERAGE EXCEPTIONS Coverage Discussion of exception HRA (health reimbursement arrangement) Long-term care coverage Multiemployer health plan On-site medical clinic – in Excluded if not a group health plan or some circumstances if a group health plan but no premium charged under
Slide 52: FSA Limits
FSA LIMITS What Salary contributions to Health FSAs ≤$2,500 per year Who Limit applies to health FSA salary contributions When First plan year after December 31, 2012 Limit applies on employee-by-employee, employer-by- How employer basis Employer contributions not included in limit Penalty Contr
Slide 53: FSA Limits
FSA LIMITS $2,500 limit applies to each employee. Example: Employer employs two individuals who are married to each other, each of the employees may contribute $2,500 and receive a total family benefit of $5,000 ! An individual eligible for benefits at two separate employers can elect up to $2,500
Slide 54: Marketplace Notice (Notice of Exchange)
MARKETPLACE NOTICE (NOTICE OF EXCHANGE) What Provide information about the Marketplace and outline some differences between purchasing a health plan through the Marketplace and choosing group-sponsored coverage Who All employers For new employees hired on or after 10/1/13, the Notice When must be
Slide 55: Individual Mandate
INDIVIDUAL MANDATE What Individuals must have Minimum Essential Coverage Who All U.S. citizens and legal residents When Beginning in 2014 If individual or individual’s spouse or dependent does not How have Minimum Essential Coverage, penalty will be assessed against that individual Penalty is charge
Slide 56: Health Exchanges
HEALTH EXCHANGES Exchanges are new health insurance marketplaces that: What Help advance competition Improve choice Give small businesses larger purchasing power The Exchanges will perform a variety of functions: Certify qualified health plans (QHPs) Determine Determine eligibility for
Slide 57: Essential Health Benefits
ESSENTIAL HEALTH BENEFITS Fully-insured small group and individual health plans must cover What essential health benefits with no annual dollar limits or lifetime maximums. Large group health plans and self funded plans are not required to cover EHB. However, if they do cover a EHB the plan must cov
Slide 58: Out-of-Pocket & Deductible Maximums
OUT-OF-POCKET & DEDUCTIBLE MAXIMUMS GF Out-of-Pocket Maximums Applies to all non-grandfathered health plans (fully-insured & self-funded) Includes the plan’s annual deductible and all covered in-network services Maximums will likely be based on high-deductible health plans. 2013 maximums are:
Slide 59: Pay or Play
PAY OR PLAY What Health plan offers Minimum Essential Coverage that is Affordable and provides Minimum Value (60% actuarial) Who Large employers (50+ full-time + FTEs) How Provided coverage to full-time employees (130+ hrs/mo) and their dependents. When January 1, 2014 (non-calendar year plans may q
Slide 60: Pay or Play – Large Employers
PAY OR PLAY – LARGE EMPLOYERS Large Employer Determination # full-time # full-time # employees equivalents # months employees each month each month - combine all controlled group entities - Full-time employees = Work 130 hours in a month Full-time equivalents = Work <130 hours in a month Hours
Slide 61: Pay or Play – Effective Date
PAY OR PLAY – EFFECTIVE DATE Effective date Pay or Play penalties generally effective January 1, 2014 Non-calendar year plans effective date may be delayed to Big 1st day of 2014 plan year if: ! Deal! They offer Affordable, Minimum Value Coverage to full-time employees by the 1st day of the 2014 p
Slide 62: Pay or Play – Effective Date Example
PAY OR PLAY – EFFECTIVE DATE Example 1 ABCco has a plan year that starts on June 1st. ABCco does not offer coverage to employees that work less than 35 hours per week. At the end of their most recent open enrollment period (June 1, 2012) they offered coverage to 30 of their 100 employees. Of the 30
Slide 63: Pay or Play – Effective Date Example
PAY OR PLAY – EFFECTIVE DATE Example 2 XYZco has a plan year that starts on December 1st. XYZco offers coverage to salaried full-time employees, but not hourly full-time employees. At the end of their most recent open enrollment period (November 15, 2012), XYZco had offered coverage to 64 of its 200
Slide 64: Pay or Play – Effective Date
PAY OR PLAY– EFFECTIVE DATE Identifying your plan year Ideally plan year is identified in plan document (e.g., SPD) May not be the same as the policy (renewal) year In the absence of plan documents, defer to: 1) The deductible or limit year used under the plan 2) If the plan does not impose de
Slide 65: Pay or Play - Affordability
PAY OR PLAY - AFFORDABILITY Affordable Coverage Coverage must be Affordable for those with household incomes of 100-400% of Federal Poverty level Federal Poverty Level Annual single coverage costs ≤ 9.5% of Federal Poverty Level for single household Employer uses same base contribution for all
Slide 66: Pay or Play - Affordability
PAY OR PLAY - AFFORDABILITY Federal Poverty Level Safe Harbor Single coverage employee cost is ≤ 9.5% of single household Federal Poverty Level Continental US $11,490 x 9.5% = $1,091.55 Affordable base plan employee contribution ≤ $1,091.55/year or $90.96/month Alaska $14,350 x 9.5% = $1,363.25 Affo
Slide 67: Pay or Play - Affordability
PAY OR PLAY - AFFORDABILITY Rate of Pay Safe Harbor Single coverage employee cost is ≤ 9.5% employee’s hourly wage x 130 Calculation Each employee evaluated separately Employee earning $8.50/hr $8.50 x 130 = $1,105 x 9.5% = $104.97 Affordable base plan employee contribution ≤ $104.97/mo W-2 Safe
Slide 68: Pay or Play – Minimum Value
PAY OR PLAY – MINIMUM VALUE Minimum Value Coverage Must offer Minimum Value for those with household incomes of 100-400% of Federal Poverty level. Minimum Value = Plan pays 60% actuarial benefit Plan design calculators Plan design checklists ACTUARY Safe Harbor NOT REQ’D = $3,000 for each em
Slide 69: Pay or Play – Minimum Value
PAY OR PLAY – MINIMUM VALUE Minimum Value Safe Harbor Plan Designs $3,500 integrated medical and drug deductible, 80% plan cost- sharing and a $6,000 maximum out-of-pocket limit for employee cost-sharing Safe Harbor $4,500 integrated medical and drug deductible, 70% plan cost- sharing, a $6,400
Slide 70: Pay or Play – All
PAY OR PLAY – ALL All clarified Must offer coverage to all full-time employees De Minimus Exception Big All = at least 95% of full-time employees ! Deal! WARNING! Offering coverage to 95% of employees does not eliminate potential for other penalties (e.g., if coverage is not Affordable) Penalt
Slide 71: Pay or Play – Full-Time Employees
PAY OR PLAY – FULL-TIME EMPLOYEES Full-time Must offer coverage to full-time employees (130+ hrs/mo) Monitor status on monthly basis ? Stable workforce with full-time/part-time only Assume retroactive changes req’d based on hours worked Establish Measurement/Stability Periods Workforce i
Slide 72: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Will you use the Safe Harbor or another method to determine full- time status (eligibility for benefits)? Part-time Seasonal Variable Full-time hour Full-time Part-time 1099 Independent Part-time contractor Monitor status on Not counted Use Safe Harbor + a monthly
Slide 73: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Employee Definition In 2014 Category Full-time Averages (expected) 130+ Benefits begin by 91st hours/month (about 30 hrs/week). day. Starting in 2015 full-time employees include employees hired for a limited duration, but who will work 30 hrs/week. Part-time* Aver
Slide 74: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Employee Definition In 2014 Category Temporary* Hired for a limited duration to cover Not required to offer a special project, LOA, etc. benefits through 2014, initiate Initial Measurement Period. Thereafter, temporary employees must be deemed full or part-time. V
Slide 75: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Measurement framework Administrative Measurement Period Stability Period Period Time used to measure Time to calculate Employees averaging average hours worked average employee 130+ hours/mo offered 2 types hours, communicate benefits – can’t be Standard
Slide 76: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Measuring ALL Employees 76 Timeline
Slide 77: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Measuring NEW Variable Hour (<30)/Seasonal Employees Initial Measurement Period + Admin Period cannot extend beyond the end of the 13th month following or coincident with date of hire. Stability Period Limited Stability Period 77 Timeline
Slide 78: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Standard Measurement Period – January 1 plan year 2013 2014 2015 May-14 May-15 Aug-13 Sep-13 Nov-13 Dec-13 Aug-14 Sep-14 Nov-14 Dec-14 Mar-14 Mar-15 Feb-14 Feb-15 Jun-13 Jan-14 Jun-14 Jan-15 Oct-13 Oct-14 Apr-14 Apr-15 Jul-13 Jul-14 May- Jun- 13 15 1st Standard Ad
Slide 79: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Standard Measurement Period – October 1 plan year 2013 2014 2015 May-14 May-15 Aug-13 Sep-13 Nov-13 Dec-13 Aug-14 Sep-14 Nov-14 Dec-14 Mar-14 Mar-15 Feb-14 Feb-15 Jun-13 Jan-14 Jun-14 Jan-15 Oct-13 Oct-14 Apr-14 Apr-15 Jul-13 Jul-14 May- Jun- 13 15 1st Standard Ad
Slide 80: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR Initial Measurement Period – May 5, 2013 hire 2013 2014 2015 Nov-13 May-14 Sep-14 Dec-14 Dec-13 Nov-14 May-15 Mar-14 Aug-13 Aug-14 Feb-15 Sep-13 Feb-14 Oct-13 Oct-14 Apr-15 Apr-14 Mar-15 Jun-14 Jan-14 Jun-13 Jan-15 Jul-14 Jul-13 Jun- May- 15 13 Initial Measurement
Slide 81: Pay or Play – Full-Time Safe Harbor
PAY OR PLAY – FULL-TIME SAFE HARBOR July 1 Renewal 2013 2014 2015 Sep-14 April-15 Jan -13 Aug-15 May-14 Nov-13 Nov-14 Aug-14 Aug-13 Mar-14 Dec-14 Dec-13 Feb-14 Feb-14 Mar-15 May-15 Jun-15 Jan-14 Apr-14 Sep-13 Junr-14 Oct-13 Oct-14 Jul-13 Jul-14 Jul-15 1st Standard Measurement Period Admin (All emplo
Slide 82: Pay or Play – Full-Time Safe Harbor: MNOco Case Study
PAY OR PLAY – FULL-TIME SAFE HARBOR MNOco Case Study MNOco has a calendar year plan. Like most employers, they are choosing to align their Stability Period with their plan year. We will look at how they measure four different employees during their 1st Standard Measurement Period. Here are the key d
Slide 83: How is Amy measured?
PAY OR PLAY – FULL-TIME SAFE HARBOR Stability Period How is Amy measured? 1/1/2014 – 12/31/2014 Amy has been with MNOco for 5 years and is Amy is locked in as a full-time regularly scheduled to work 40 hours/week. Amy’s employee and offered benefits. If she enrolls, she cannot be Standard Measuremen
Slide 84: How is Barry measured?
PAY OR PLAY – FULL-TIME SAFE HARBOR How is Barry measured? Stability Period 1/1/2014 – 12/31/2014 Barry has been seasonal with MNOco for 5 years. He Barry is locked in as a full- works between 30-50 hours/week during the holiday rush, time employee and offered which usually lasts from August – Janua
Slide 85: How is Chris measured?
PAY OR PLAY – FULL-TIME SAFE HARBOR Stability Period How is Chris measured? 1/1/2014 – 12/31/2014 Chris is a new variable employee hired as of as of Chris is locked in as full-time 4/10/2013. He is scheduled to work 32 hours per employee and offered benefits. week. Chris’ Standard Measurement Period
Slide 86: How is Debra measured?
PAY OR PLAY – FULL-TIME SAFE HARBOR How is Debra measured? Stability Period Debra is a new, variable hour employee who is hired on 8/1/2014 – 7/31/15 June 15, 2013, after the Standard Measurement Period Debra is locked in as full-time begins. Debra’s Initial Measurement Period begins on employee and
Slide 87: Calculating hours worked during Measurement Period
PAY OR PLAY – FULL-TIME SAFE HARBOR Calculating hours worked during Measurement Period # hours of Average # # regular paid time off # months in hours hours + special Measurement worked per worked unpaid Period month leave # hours of paid time off: include Rehires vacation, PTO, sick time, teacher
Slide 88: Status change: Measurement Period not completed
PAY OR PLAY – FULL-TIME SAFE HARBOR Status change: Measurement Period not completed Part-time et al. full-time Employees in Initial Measurement Period: Offer benefits by 1st day of 4th month (e.g., change occurs 4/15/14, offer benefits by 8/1/14) Employees not in Initial Measurement Period:
Slide 89: Pay or Play - Dependents
PAY OR PLAY - DEPENDENTS Dependents Coverage must be offered to dependents Children Dependents include children under age 26 Child does not need to be a tax-dependent of the employee ? Child coverage does not need to be offered in 2014 as long as employer is taking steps to offer it in 2015
Slide 90: Pay or Play - Penalties
PAY OR PLAY - PENALTIES Penalties = $2,000 x (# full-time employees - 30) Coverage not offered at all OR fail to offer Minimum Penalty Essential Coverage to full-time employees and dependents if ONE employee enrolls in subsidized exchange coverage* = $3,000 for each employee that enrolls in subsidiz
Slide 91: Waiting Period – The 90 Day Rule
WAITING PERIOD – THE 90 DAY RULE What Benefits must begin by the 91st day Applies to group health plans and insurers Who When Plan years beginning on or after January 1, 2014 If an employee is expected to be full-time (130 hrs/month), How he/she must be eligible to enroll within 90 days of his/her s
Slide 92: No Pre-Existing Conditions for All Ages
NO PRE-EXISTING CONDITIONS FOR ALL AGES What Cannot deny coverage based on a pre-existing condition Who Group health plans and insurers When Plan years beginning on or after January 1, 2014 No restrictions on plan enrollment or coverage based on a How preexisting condition Penalty $100 per day per a
Slide 93: Wellness Incentives
WELLNESS INCENTIVES What Increase premium discount for rewards-based wellness program from 20% to 30% or 50% Who Employers with rewards-based wellness programs When Plan years beginning on or after January 1, 2014 30% premium discount allowed for wellness participants How 50% if nicotine cessati
Slide 94: Cadillac Tax
CADILLAC TAX What 40% tax on excess premiums Who Insurers and TPAs (assume costs passed onto employers) When 2018 Healthcare premiums >$10,200/individual and $27,500/ family How are “excessive” Higher limits for high risk jobs or workforces with older populations Tax = Penalty [(Individual premi
Slide 95: Non-Discrimination Testing
NON-DISCRIMINATION TESTING What Plans may not discriminate by giving highly-compensated employees better benefits or premium contributions Who Fully‐insured group health plans GF When Delayed (until 2014?) Fully‐insured group health plans cannot discriminate in favor How of highly compensated indi
Slide 96: Automatic Enrollment
AUTOMATIC ENROLLMENT Automatically enroll new full-time employees in group health What coverage Employers with > 200 full-time employees that a group health Who plan When Delayed (effective 2015?) Offer coverage to new full-time employees How Provide ample time for employee to make election If
Slide 97: Excepted Benefits – Dental & Vision
EXCEPTED BENEFITS – DENTAL & VISION There are two separate tests that an employer can use to determine if a dental or vision benefit is an excepted benefit. The tests apply based on the funding arrangement of the plan (i.e. fully-insured or self funded). Fully-insured test To determine if a fully-in
Slide 98: Excepted Benefits – Dental & Vision
EXCEPTED BENEFITS – DENTAL & VISION Self-funded Test To determine if a self-funded dental or vision plan is an excepted benefit the plan must meet two criteria: Employees must be able to elect the benefit separately (I.e. it is not bundled with another plan such as medical) AND Employees must co
Slide 99: Affordable?
AFFORDABLE? Mfhant EMPLOYEE BENEFITS
Alliant Employee Benefits — Investor Presentation (June 2013) on 6ix