1. Keep the conversation going: @dominionsystems
@GravesandCoIns
Navigating Health
Reform:
Then, Now, and
Tomorrow
We will begin at 1pm EST
Use the chat feature to ask
questions!
#ACA

2. Software company that helps businesses with their
payroll, time & attendance, and human resource
management. Dominion provides an integrated
web-based solution that allows businesses to run
more efficiently.

3. Specializes in insurance benefits for individuals
and employers from 2 employees and up. For
employer groups, Graves & Company provides
health, life, disability, vision, and
voluntary/worksite insurance.

4. Matt Graves
Benefit Specialist &
Certified Patient
Protection and
Affordable Care Act
Professional
Contact Matt: mgraves@gravesandco.com
Linkedin: www.linkedin.com/in/matthewpgraves/

5. To help you understand the Affordable Care Act and how it impacts you

6. Agenda
History
Timeline
Changes and Delays
Individual Mandate
Federal Poverty Level Guidelines
Taxes and Fees
Small Employer Groups and Health Reform
Large Employers and the Employer Mandate

7. PPACA
Legislatively known as the ‘Patient Protection and
Affordable Care Act’ (PPACA), but also referred to as
Health Reform, Health Care Reform, Affordable Care
Act, and Obamacare.
– Signed into law by President Obama on March 23, 2010

8. 2010 to 2011
• Eligibility option to remain on
parents health insurance
coverage until age 26.
• Medical underwriting
prohibited for children under
the age of 19.
• Implementation of ‘no cost’
preventative care visit
requirement.
• New limitations on usage
for HSA, FSA, and Health
Reimbursement
arrangements.
• New fee on
pharmaceutical
manufacturers.
• Introduction of Medical
Loss Ratio limitations.

9. 2012 to 2013
• Required distribution of
Summary of Benefits and
Coverage (SBC), provided
by carrier.
• Medical device ‘sales tax’
begins
• Employers to begin
reporting value of
benefits of employee W-
2’s.
• Employers required to
inform all employees of
exchange access and
insurance availability
through healthcare.gov
• Pre-tax contributions to
FSA limited to $2,500
annually.

10. 2014 to 2015
• Guarantee issue for all fully-
insured plans (group and
individual); elimination of pre-
existing condition clauses (fully-
insured plans).
• Essential Health Benefit
requirement (EHB).
• Limitation on waiting periods for
employer sponsored health
insurance eligibility.
• Individual mandate
• Opening of state and federally
managed health insurance
marketplaces, also referred to
• ‘Waiting on further
guidance’ (see delays)
• Employer mandate for
employers with 50 or more
employees.
• Implementation of health
plan excise tax, commonly
referred to as the ‘Cadillac
Tax’ (2018).

11. Changes and Delays
• Over 40 changes and delays to date
• Delay of SHOP
• Elimination of 1099, PPACA related, reporting requirement
• Extension of individual enrollment period, sans mandate
penalty
• Extension of individual deadline for April 1st effective date
• Carrier option to provide continuation of prior year
plan/extension of ‘non-compliant’ plans
• Removal of deductible ceilings for small group plans

12. Individual Mandate Penalty (Tax)
• 2014: $95 per uninsured individual or 1% of
household income.
• 2015: $325 per uninsured individual or 2% of
household income.
• 2016: $695 per uninsured individual or 2.5% of
household income.

13. Individual Mandate and Federal Poverty
Level Guidelines
Persons in
Family/Household
Income Guidelines
at 400%
1 $45,960
2 $62,040
3 $78,120
4 $94,200
5 $110,280
6 $126,360
7 $142,440
8 $158,520
• Individuals/families with
less than 400% of the
defined household income
may qualify
• Individuals/families with
less than 250% of the
defined household income
may qualify for cost-
sharing subsidies

14. Taxes and Fees
Comparative Effectiveness Research Fee (CERF) is an
annual fee on fully-insured and self-funded health plans until 2019.
• Created to fund comparative effectiveness research to determine
which treatments work best when applied to actual patients.
• A $2 per participant, annual fee, that may be future indexed on the
basis of national health expenditures.
• On fully-insured plans the insurer is responsible for fee payment;
self-insured plans the employer is responsible.

15. Taxes and Fees
Health Insurance Industry Fee is an annual fee on fully-
insured medical, dental and vision plans beginning at 2-2.5% in 2014
and increasing to 3-4% in future plan years.
• Implemented to help fund the Federal and State Marketplaces.
• Insurers are responsible for making sure fee is paid.

16. Taxes and Fees
Reinsurance Assessment Fee is an annual fee applied to
fully-insured and self-funded plans from 2014-2016.
• Purpose is to help offset high risk individuals entering the individual
market.
• Fee is $63 per insured per year beginning in 2014 with a decreasing,
to be determined fee, in 2015 and 2016.
• For fully-insured plans, the insurer is liable for the fee, while self-
funded plan sponsors are responsible for the payment but may utilize
the services of a Third Party to help administer.

17. Taxes and Fees

18. The ‘Cadillac’ Tax
Effective beginning 2018
40% annual tax on employers that provide
high-cost benefits through an employer-
sponsored group health plan.

19. The ‘Cadillac’ Tax
• Currently, the law states that the employer is
responsible for determining the tax and reporting it
to the plan administrator.
– The plan administrator pays the tax to the IRS
• Tax is applicable to premiums exceeding caps of
$10,200 for single coverage and $27,500 for family
coverage.
– The 40% tax is levied on each dollar of premium
exceeding the caps

20. W-2 Reporting Requirements
Coverage Type Report Do Not Report Optional
Major medical 
Dental or vision plan 
FSA funded by salary-
reduction amounts

FSA employer
contributions/excess
contributions

HRA contributions 
HSA contributions 
Hospital indemnity or
specified illness, paid
on pre-tax basis

Additional reporting information available at http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage

21. Reforming FSAs, HRAs, and HSAs
• FSA – (Flexible Spending Account), HRA – (Health
Reimbursement Arrangement), HSA – (Health
Savings Account)
– FSAs, HSAs, and HRAs are pre-tax, or tax deductible,
resources that can be utilized towards qualified medical
expenses.
• Under PPACA, FSA and HSA dollars can no longer
be used to purchase OTC medications and other
retail medical related items without a physician
issued prescription.

22. Reforming FSAs, HRAs, and HSAs
• FSAs are now limited to a maximum contribution of $2,500
per calendar year under PPACA.
– Dollars contributed to FSAs are usually provided through an
employee’s elected payroll deduction.
– FSAs are, usually, referred to as ‘use-it-or-lose-it’ accounts
• In late 2013 the IRS issued new guidance enabling a FSA balance roll-
over of, up to, but no greater than $500.
• HRAs, prior to September of 2013, could be offered by an
employer to reimburse employees for individually owned
health insurance policies.
– IRS ruled such actions were no longer compliant because it
qualified as a group health related offering.

23. Small Employer Groups and Health Reform
Small employer groups defined as employers with 49
or less Full-Time Equivalent employees.
• Not subject to penalties for declining to offer an
employer sponsored health insurance plan.

24. Small Employer Groups and Health Reform
All small employer group, fully-insured (FI) plan
requirements
– Must be guarantee issue beginning in 2014; elimination
of medical underwriting
– Groups no longer classified on basis of industry code
(SIC) for purposes of underwriting
– Elimination of composite rates
– Maximum 3-to-1 spread of rate differential amongst
employee population
– Adjusted Community Rating

25. Large Employer Groups and the
Employer Mandate

26. Calculating Full-Time Equivalents
• Step 1: Calculate the number of full-time employees for
each month of the previous calendar year.
– Full-time is defined as anyone that worked 30 hours a week per
month, or 130 hours total per month; includes any paid hours
(e.g., vacation).
• Step 2: Determine the number of FTEs for each month of the
previous calendar years.
– To calculate the FTEs take the total paid hours of service that
were not full-time for the defined month; defined as 30 hours or
less per week or a maximum of 120 hours per month, per
employee.
– Determine the sum total hours worked of all part-time employees
and divide by 120; result is the employer groups total number of
FTEs.

27. Calculating Full-Time Equivalents
• Step 3: Determine the final FTE count by finding the
sum of Step 1 and Step 2; divide the FTE total sum
by 12.
• If the employer group’s calculated result is greater
than 50, the group is subject to the Employer
Mandate.

28. Large Employers and the Employer
Mandate – The Penalties
• Large group employers not offering coverage are
subject to an annual penalty of $2,000 per full-time
employee, less 30 employees.
– Example: Penalty for employer with 75 full-time employees,
not offering coverage.
• (75 full-time employees minus 30) multiplied by $2,000 = $90,000 in
calendar year penalties.
• If the large group offers a health plan, but does not
meet ‘affordability’ standards, the employer is subject to
a $3,000 penalty per employee that is eligible to receive
a premium tax-credit through the State or Federally
Facilitated Marketplace.

29. Large Employers and the
Employer Mandate
The employer mandate
requires employers with
50 or more full-time
equivalent employees
(FTEs) to provide health
insurance.
Insurance must be
provided to all eligible
employees working the
equivalent of 30 hours or
more a week over a
defined ‘look back’
period.

30. Employer Mandate
Part-time employees (less than 30 hours)
• No requirement to offer part-time employees
coverage
• However, part-time employees are utilized in
calculating the Full-Time Equivalents

31. What happens next?
Ideas, Statistics, Expectations, and Actions

32. Questions?

33. Thank You