FAQs of 3 webinars on this subject that I participated in, along with speaking today to a representative of the Michigan Planners, Inc. group here in Michigan. Understanding Health Reform FAQs We in Michigan we will use the site https://www.healthcare.gov/ (for now) 1. Am I required to have health insurance? Yes. This aspect of the law is known as the individual mandate. It was upheld by the U.S. Supreme Court in July 2012. 2. Will employers pay a penalty if they don’t offer health benefits to their employees? No. Under the Affordable Care Act, employers with fewer than 50 full-time employees and full-time equivalents, are not required to offer employer-sponsored coverage. Unsure if you are a small or large employer? 3. Will my employees pay a penalty if they don’t have health insurance? Yes. The law requires Americans to carry health coverage or pay a penalty on their annual income tax filing. The penalty is the greater of 1% of household income or $95 per adult ($47.50 per child) in 2014. The fee increases to the greater of 2.5% or $695 per adult ($347.50 per child) in 2016. 4. How will small employers buy coverage in 2014? Employers can continue to use the same shopping methods they use today. For example, purchasing from a health benefits company with the help of an independent agent/broker. In addition, the federal government is introducing the Health Insurance Marketplace (formerly called the health insurance exchange). There will be both public and private exchanges. 5. What will coverage include? Beginning in 2014, all non-grandfathered health insurance coverage in the small group markets will be required to coverage essential health benefits. These services include benefits that most small employer plans cover today such as emergency services, preventive care, hospitalization and lab services. Small groups must have an annual limitation on cost-sharing for essential health benefits and they cannot set deductibles above $2,000 for self-only and $4,000 for family coverage. 6. What will coverage cost? Changes in rating rules and additional taxes and fees will have the most impact on the cost of health coverage in 2014. Under these changes, insurance carriers can set prices in the small group and individual markets based on three things: geographic factor, age and tobacco use. Plus, the ACA has added five taxes and fees to the purchase of most plans. 7. Will coverage have to change? All health plans in the small group market must be assigned to a metal tier, which reflects the value of the benefits package. The metal tiers measure the value of the essential health benefits within each plan tier: platinum or 90%, gold or 80%, silver or 70% and bronze or 60%. 8. Are there tax benefits to companies that offer employee benefits? Yes. Small businesses are eligible for tax credits. One of the biggest questions asked about health reform is “how are we going to pay for all of this?” Under the Affordable Care Act, five new taxes and fees will be added to the purchase of health insurance. The rules, timing and amounts for each of these vary...see below. The purpose of each of the taxes and fees: 1. Annual fee on health insurance carriers — This annual fee will be assessed on all fully funded health plans based on premium. (Note: Final regulations have not been released on this fee.) 2. Transitional Reinsurance Program — Fees collected from all commercial plans (fully and self funded) sold both on and off the exchange and in both the group and the individual markets. This will be used to pay for high-cost claimants insured in the individual market throughout the country. The program is temporary and runs from 2014 through 2016. 3. Risk Adjustment Admin fee — A fee used to develop a risk adjustment methodology that will compensate certain plans with membership that is less healthy than average by assessing plans with membership that is healthier than average. This fee is assessed on all individual and small group policies. 4. Patient-Centered Outcomes Research Institute (PCORI) fee — This fee will fund the PCORI, which conducts comparative effectiveness research. The fee will also be assessed on all fully-insured and self-funded plans including health reimbursement arrangements. The fee will be from 2012 through 2019. Self-funded employer groups are responsible for paying this assessment and filing an annual excise tax return (Form 720) with the IRS. 5. Exchange user fee — Fee that will be applied to all plans purchased from the exchange both individual and Small Business Health Options Program (SHOP). -- Marika Zemke - Adult Services Manager Commerce Township Community Library 2869 North Pontiac Trail Commerce Township, MI 48390 Direct Line 248-438-8163, Fax 248-669-3247 mzemke@commercelibrary.info