This is an overview of the Penalties, Taxes, Fees, and other items that need to be considered and calculated by individuals and businesses as it relates to the Provisions and mandates under the Patient Protection and Affordable Care Act PPACA.
For more information for Individuals CLICK HERE OR For Employers CLICK HERE
Below in the BOX is a list of resources that you can use to understand what “EHB” or Essential Health Benefits are and how they work, who is respondible for providing them and who is exempt.
For more information for Individuals CLICK HERE OR For Employers CLICK HERE
Check out this folder below for resources that explain what the MLR (Minimum Loss Ratios) are and how they can affect you, your company.
For more information for Individuals CLICK HERE OR For Employers CLICK HERE
Preventive Care Available under the Affordable Care Act
For more information for Individuals CLICK HERE OR For Employers CLICK HERE check out the resources in the BOX folder below as well.
Why Healthcare Reform – An Overview
For more information for Individuals CLICK HERE OR For Employers CLICK HERE
English: (Photo credit: Wikipedia)
Here is a document that I commonly refer to that was created by the NATIONAL ACADEMY of SOCIAL INSURANCE: you will NOTE this is NOT a republican or democrat document, members of the panel are from all parts of this spectrum and political arena, it’s contributors and panelists are the who’s who in the academia, insurance, and medical world. From Yale to Johns Hopkins to Princeton, Chicago, Wellpointe and more. This document called “Reflections on Medicare” was published in 2001 and it also includes / recounts the transcription of a discussion made in 1992 with Robert M Ball (Commissioner of Social Security from 1962-1973) & Arthur E. Hess (Director of Health Insurance 1965-1967) … (the years when Medicare was passed and rolled out) … in which on page 17 of this PDF document or page 3 of the conversation, you will find a very interesting commentary about the creation of Medicare Part B and the unintended impact on our entire health care system …. basically it says that Part B (outpatient services part of medicare) was literally created overnight as an afterthought as part of a ways & means committee with NO actuarial studies of the impact that it would have on the delivery of healthcare, this one action was the single most important shift into the change of our entire healthcare system and the delivery of services and how they are paid. This is the exact kind of rash, impulsive, foolish “leadership” like Pelosi stating that we need to “pass the bill so we can see what’s in it.” not realizing that there is far more at stake that impacts not only our healthcare system, but a systemic impact and overflow directly into our entire nations economy. I DARE YOU TO READ THIS https://
US residents with employer-based private health insurance, with self insurance, with Medicare or Medicaid or military health care and uninsured in Million; U.S. Census bureau: Income, Poverty, and Health Insurance Coverage in the United States: 2007 (Photo credit: Wikipedia)
Federal News
Supreme Court 2012 Review of Reform Law Likely
The recent ruling by the 11th Circuit Court of Appeals makes it almost certain the Supreme Court will decide the federal health care reform law’s constitutionality in its 2012 term. To date, two circuit courts have produced contradictory rulings on the law’s individual mandate. The Obama administration, by virtue of being the loser in the latest ruling, will file the appeal to the Supreme Court, which rarely turns down requests from the federal government.
9th Circuit Rejects Reform Suit
In another case against the federal health care reform law, the 9th Circuit Court of Appeals threw out a suit filed by a former California state lawmaker and the Pacific Justice Institute. The court upheld the decision by a lower court that neither party had a legal standing to challenge the law.
Read more at: http://bit.ly/odeg08
Congress Takes a Break; Supercommittee Formed
Congress has taken its annual August recess after completing a last-minute deal to increase the nation’s debt limit. The House and Senate will not return until after Labor Day. Shortly after leaving town, House and Senate leaders appointed their representatives to the new “supercommittee” that was created as part of the debt limit deal. The supercommittee is charged with creating a proposal to eliminate $1.5 trillion in government spending over the next ten years. Their first meeting is September 16, with results due by Thanksgiving. Members include Representatives Dave Camp (R-MI), Fred Upton (R-MI), Jeb Hensarling (R-TX), James Clyburn (D-SC), Chris Van Hollen (D-MD), and Xavier Becerra (D-CA) and Senators Patty Murray (D-WA), Max Baucus (D-MT), John Kerry (D-MA), John Kyl (R-AZ), Rob Portman (R-OH), and Pat Toomey (R-PA)
Administration Releases Regulations on Exchanges & Subsidies
The Obama administration has published three new proposed regulations to (1) establish processes for enrolling individuals and families in plans offered by state-based exchanges; (2) lay out how an estimated 20 million Americans will get tax credits to help them pay the premiums charged by insurers through the exchanges; and (3) establish a “seamless” enrollment process in which people benefit from “one-stop shopping” in exchanges to easily enroll in Medicaid or the Children’s Health Insurance Program if they don’t qualify for the tax credits. Comments on the proposed regulations are due by October 31. The regulations can be found in the Federal Register at:
Exchange enrollment processes: http://www.gpo.gov/fdsys/pkg/FR-2011-08-17/pdf/2011-20776.pdf
Premium tax credits: http://www.gpo.gov/fdsys/pkg/FR-2011-08-17/pdf/2011-20728.pdf
Medicaid/CHIP eligibility changes: http://www.gpo.gov/fdsys/pkg/FR-2011-08-17/pdf/2011-20756.pdf
HHS May Not Be Able to Fund Federal Exchanges
The U.S. Department of Health and Human Services (HHS) is facing a funding dilemma with respect to establishing a federal health insurance exchange. Although the federal health care reform law gives HHS the authority to create a federal exchange for states that don’t develop their own, it does not provide funding. In comparison, the law provides robust financial resources to help states build their own exchanges. One expert says HHS will have to “get creative about the [federal exchange] financing,” by asking contractors to delay getting paid until the exchange begins collecting fees.
http://www.politico.com/news/stories/0811/61513.html
NAIC Warns Feds about Exchange Loophole
A part of the federal health care reform law requires each state-based health insurance exchange to offer at least two plans which will be available in every exchange nationwide. In a letter to the U.S. Office of Personnel Management (OPM), NAIC President and Iowa Commissioner of Insurance Susan Voss has expressed concern the Multi-State Plan program will create an uneven playing field for insurers by favoring large national insurers who would offer these plans. “Insurance Commissioners and the NAIC have serious concerns about the potential for market disruption and adverse selection, and the resulting negative impact on consumers and health insurance markets which would arise if Multi-State Plans are allowed to operate under different rules than their competitors.” Voss wrote.
Read more at: here
Feds Issue Proposed Rule on Benefits, Coverage Disclosures
The IRS, the Department of Labor (DOL), and HHS have released proposed rules on insurance-related forms required by the federal health care reform law. The “summary of benefits and coverage” and a uniform glossary for group and individual health insurance were released almost five months late due to infighting between HHS and DOL over the extent to which large employer plans will be expected to comply with the provision. Both rules were published in the Aug. 22 Federal Register with comments due 60 days after publication.
The proposed rules can be found at: http://www.ofr.gov/OFRUpload/OFRData/2011-21193_PI.pdf
Issa Questions Why HHS Is Ending Waivers for Mini-Med Plans
House Oversight and Government Reform Chairman Darrell Issa (R-CA) is questioning HHS’s decision to end the waiver process for health plans to comply with certain requirements of the federal health care reform law. Issa said in a letter to HHS Secretary Kathleen Sebelius that he wants HHS to explain why they are shutting down the waiver program and provide the committee will all the documents and communications related to the decision to stop it.
Read more at: here
“Small employers” who qualify for this 2010 income tax credit (including churches and section 501(C) (3) charitable organizations) must satisfy ALL of the following conditions:
One component of the huge healthcare legislation is a tax credit for small employers who pay at least 50% of their employees’ health insurance premiums. Unlike most of the future healthcare bill provisions, this employer federal tax credit can be claimed for year 2010 tax returns due this Spring.
Calculations for this new tax credit are very complex (even by tax law standards!) and are reported on new IRS Form 8941 – a one page tax form which requires completion of 7 different worksheets to accurately calculate the tax credit. You can review IRS Form 8941 with instructions at www.irs.gov. IRS information and resources
Initially, the IRS outlined rules for the tax credit in Notice 2010-44. A follow-up document, Notice 2010-82, explained transition relief related to the rules for a qualifying arrangement and provided more details about the requirements. For example, Notice 2010-82 clarifies how an employer that offers more than one plan determines whether its contribution amount meets the threshold for a qualifying arrangement. The IRS has released several additional items related to the tax credit, including:
Three Simple Steps Fact Sheet | Frequently Asked Questions | YouTube Video | More information is available on the IRS website
“Small employers” who qualify for this 2010 income tax credit (including churches and section 501(C) (3) charitable organizations) must satisfy ALL of the following conditions:
1) You paid at least 50% of the “single employee” premium cost for year 2010. Insurance costs are for primary health insurance and dental and vision insurance. Employer contributions to HSAs, HRAs and FSA medical accounts are not deemed insurance and thus are not eligible for the tax credit; AND
2) You employed fewer than 25 “full-time equivalent” (FTE) employees during 2010. In determining FTE employees, 30 employees who worked 20 hours per week count as 15 FTE employees. Employees who you exclude from this FTE “count” include:
3) Your “average annual wages” paid to employees during 2010 were less than $50,000 per FTE employee. For this purpose “wages” are gross wages paid before any tax or retirement withholdings.
IF YOU MEET ALL 3 OF THESE CONDITIONS, YOU LIKELY QUALIFY FOR THE TAX CREDIT.
How Much is the Tax Credit?
Small employers who pay at least 50% of their employees’ health insurance, have 10 or fewer full-time equivalent employees, with average annual wages of $25,000 or less per “FTE” employee, will receive a tax credit of 35% (25% for churches and 501(C) (3) charitable organizations) of the employer-paid health insurance premiums in 2010. This can be a large tax credit! HOWEVER, as the FTE employee count trends from 10 employees to 25, and the “average wages” per FTE employee trends from $25,000 to $50,000, the tax credit percentage decreases from the 35%/25% ”starting” tax credit rates.
CAN I “EYEBALL” IT?
Catalist has posted a “Short-Cut Small Employer Insurance Credit Percentage” worksheet as a downloadable form, CLICK HERE . Note that the worksheet is divided unto 2 sections, For-Profit Business and Nonprofit Entity. A for-profit business with 14 “FTE” employees and with average 2010 wages per FTE employee of $35,000 would be eligible to claim a federal tax credit of 12% of the employer-paid health insurance premiums paid during 2010. If the employer paid $30,000 of health insurance premiums for their employees in 2010, their 2010 tax credit would be $3,600.
CLAIMING THE TAX CREDIT
So you have met all three of the eligibility requirements and have “eyeballed” our worksheet and estimated you can claim a tax credit of several thousand dollars. Now what?
You begin the process of completing IRS Form 8941, which for-profit employers will attach to their 2010 business income tax return, and churches and other 501 (C) (3) charities/ministries will complete and attach to non-profit IRS Form 990-T.
Since the Form 8941 calculations are confusing and lack substantial guidance from the IRS, we recommend that you be “pragmatic” and make your best effort to complete an accurate Form 8941 and claim the tax credit based on your calculations. “Close is good enough” in horseshoes and with Form 8941 calculations! If your calculations are later found to be slightly incorrect by the IRS, and you have made a “reasonable effort” to accurately prepare Form 8941, then you will be fine.
The calculations require that you capture 2010 payroll information for employee hours paid during 2010, and gross wages paid for 2010. Legal updates and tax considerations intended to inform clients and colleagues of Catalist about current payroll issues and planning techniques. You should consult with your CPA or tax advisor before implementing any ideas, comments or planning techniques. For a recommendations, Catalist recommends first consulting with Strategic Partner Profitable Accounting Services.
Under the Patient Protection and Affordable Care Act (or health care reform law), the secretary of Health and Human Services will establish a voluntary long-term care (LTC) insurance program called Community Living Assistance Services and Supports (CLASS) by January 1, 2011. The program will offer the CLASS Independence Benefit Plan, but the new law does not specify a date for enrollment. This is a government program.
What the provision does
The long-term care provision of health care reform law is designed to help individuals and families pay for long-term care. Fewer than 10% of older Americans currently have private LTC coverage. The CLASS program attempts to address gaps in coverage by offering a long-term care insurance plan. However, it offers limited benefits.
Who can enroll
Employers will need to decide if they will offer the CLASS program to employees. If an employer chooses to participate, employees age 18 and older must be automatically enrolled in the program, regardless of their pre-existing conditions. Employees can choose to “opt-out” if they don’t want to participate. CLASS is also available to individuals who are self-employed, have more than one employer or have an employer who chooses not to participate.
How the premiums will be determined
Premiums will be established by the U.S. Department of Health and Human Services secretary and will be based on age and not health risk. Based on the information available, we believe premium subsidies will be available for workers with incomes below the federal poverty level and full-time students age 18 to 21 who work.
How to qualify for benefits
After paying premiums for five years, enrollees will be eligible to receive benefits.CLASS will be administered by the U.S. Department of Health and Human Services
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This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.
Obama Promises Made Promises Broken
If you like your health care plan, tough luck – if you’re on a Medicare prescription drug plan:
More than 3 million seniors may have to switch their Medicare prescription plan next year, even if they’re perfectly happy with it, thanks to an attempt by the government to simplify their lives.
The policy change could turn into a hassle for seniors who hadn’t intended to switch plans during Medicare’s open enrollment season this fall.
And it risks undercutting President Barack Obama’s promise that people who like their health care plans can keep them….”As a result of this policy, there are going to be fewer plans offered in 2011,” said Bonnie Washington, a senior analyst with Avalere Health, which produced the study.
If you like your health care plan, better luck next time – if you’re a college student:
Along comes word that the bill “could make it impossible for colleges and universities to continue to offer student health plans.” That’s how the American Council on Education and a dozen other higher-ed lobbies put it in a recent letter to the Obama Administration, warning that the insurance coverage they offer may get junked by ObamaCare’s decrees.
Between 4.5 million to 5.5 million students annually are insured by short-term plans sponsored by their schools, which are tailored to upperclassman who have aged out of their parents’ coverage or to international and graduate students. These plans are very low cost because the benefits are designed for generally healthy young people and often organized around campus health services and academic medical centers.
All of which means these plans aren’t likely to qualify under ObamaCare’s “minimal essential coverage” rules that mandate rich benefit packages, even if colleges have the flexibility to make exceptions for special needs. And given that insurance must now be sold anytime to everyone, colleges may be required to continue to cover students after they’ve graduated-leaving this type of coverage unaffordable.
If you like your health care plan, cross your fingers and hope you’ll like your new one better – if your employer sponsored plan doesn’t meet the law’s strict grandfathering requirements:
While many U.S. companies initially hoped they could preserve much of their existing group health plans under the new grandfather provision, a new survey by Hewitt Associates, a global human resources consulting and outsourcing company, shows that almost all now believe they will not. Ninety percent of companies said they anticipate losing grandfathered status by 2014, with the majority expecting to do so in the next two years.
Under the “grandfather” provision of the U.S. Patient Protection and Affordable Care Act, companies can maintain many of their current health care coverage provisions and are required to make fewer changes to plan documents and administrative procedures in order to comply with the new law. Companies can lose their grandfather status if they take certain steps such as reducing benefits, significantly raising co-payment charges, significantly raising deductibles or changing insurance carriers.
According to Hewitt’s survey of 466 companies–representing 6.9 million employees–most companies expect to lose grandfather status because of health plan design changes (72 percent) and/or changes to company subsidy levels (39 percent).
None of this is exactly surprising—at least if you’ve been paying attention. Any health system overhaul as sweeping as the PPACA was bound to upset existing coverage arrangements, especially given the dominance of insurance in American health care. But given how disastrous the possibility of forced plan changes proved to HillaryCare in the 90s, the law’s supporters couldn’t admit that. So President Obama and congressional leadership and the progressive activist class had to promise, repeatedly, that no one would have to change plans if they didn’t want to.
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Please watch this… some insight on what is going on in Healthcare.
