"Should I provide health insurance for my employees?" The process for determining the cost of providing health care benefits and the impact of health benefits an retaining and attracting best-in-class employees.
1. E D U C A T I O N S E R I E S Pay or Play? Date: August 10, 2010 Presented by: Dominic Franchini Vice President Market Development, HORAN William Freedman Attorney, Dinsmore & Shohl Marty Howard, CPA Cassedy Schiller
2. Agenda - Pay or Play Define the regulation, employers affected and timeline Review the moving parts Model options and costs Identify tax consequences Discuss employer notification requirements Share other key points to consider
3. Regulation Highlights Beginning in 2014, individuals must maintain “minimum essential coverage” or pay a penalty Applicable large employers with 50 FTE’s may owe penalties Failure to offer “minimum essential” health coverage Offering “minimum essential” health coverage that is not affordable Full time employee = 30 hours or more per week Full time employees may be eligible to purchase coverage through exchange Full time employee may qualify for premium credit
4. Who is affected Businesses with 49 employees or less Exempt from pay or play mandates Businesses with 25 employees or less Exempt from pay or play mandates Eligible for tax incentives IF currently offering group health benefits Businesses with 50 or more employees Required to comply with pay or play mandates
5. Timelines Insurance as “usual” until 2014 New discrimination rules New underwriting requirements W-2 reporting of 2011 benefits Small business tax credit 2010 - 2013 Exchanges established by January 1, 2014 Pay or Play begins January 1, 2014
6. Things to Consider How much does insurance cost my company today? How much would I pay in penalties? Is my benefit plan design compliant? Cost to change benefit design? Do I have employees a 100% to 400% federal poverty guideline? Is my contribution affordable for those employees? How much would penalty be for employees receiving assistance? How would employees purchase insurance outside employer? Cost?
8. 8 Employer Notification Required notifications to employees (Not later than March 1, 2013) Existence of an Exchange, description of services, how to get assistance Employer plan’s share of total allowed cost is less than 60%, eligibility for premium tax credit Purchase of health plan through exchange, outside free choice voucher, may forfeit employer contribution and tax deduction Required notifications to Secretary of Treasury Name / Address / TIN # / months enrolled for all FTE Waiting period Months during year coverage is available Monthly premium for lowest cost option Employer’s share of total allowed cost