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Group Health Insurance Definitions

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Group Health Insurance Definitions

[usa_container toggle=”true” closeall=”true” animate=”fade” search=”true” theme=”theme-blue” highlight_bg=”#eeee22″ highlight_color=”#000000″ nav_box=”square” nav_icon=”angle_double” placeholder=”Type your search term here” msg_item_found=”> is the total number of categories your search phrase was found under. Each one is under a separate word or phrase below.” msg_no_result=”We couldn’t find anything…try another search term” limit=”3″][usa_item acc_title=”ACA / Affordable Care Act / “Obamacare””]This is the Health Care Reform law that was passed in March of 2010 that consisted of 2 laws that together make up the ACA.  The PPACA was passed on 3/23/2010 – the Patient Protection and Affordability Care Act.  A week later the HCERA – Health Care Education Reconciliation Act was passed 3/30/2010.  These 2 bills combined are the ACA.  This bill really “Amends” (or makes changes) to other laws that already exist within the government.  These laws regulate health care and health insurance.  So the bill “amended” the SSA – Social Security Act, the IRS – Internal Revenue Service, ERISA – Employee Retirement Income Security Act, the PHSA – Public Health Safety Act, HIPAA – Health Insurance Portability and Accountability Act, FLSA – Fair Labor Standards Act.  Cobra was not amended.  

The 3 divisions of Government that will oversee the implementation and regulations of the ACA will be from the Department of Health and Human Services – HHS, the IRS, and the DOL – Department of Labor.  The ACA has been and will continue to get guidance (interpretation of the law, changes, additions, clarifications, enforcement, or delays to the bill.)  There have been thousands of additional pages of regulations that have “filled in” the framework of the ACA, and it will continue to be defined as time goes on.

The bill also made changes to Medicare and CHIP.[/usa_item][usa_item acc_title=”Advanced Premium Tax Credit (Subsidy)”]A subsidy is an “Advanced Premium Tax Credit” that is available on the Individual Exchange but NOT the SHOP Exchange for small businesses.  A “subsidy” means that you get a reduced premium payment to pay for your medical insurance.  The factors that affect the premium you pay (the subsidy you receive), would be your income and the number of family members on your tax return.

The only way to get a “Subsidy” is to get a health insurance plan through the Governments “Exchange” and only if your income is between 138% to 400% of the federal poverty level.  Nevada Insurance Enrollment can help you with a “subsidized” or “unsubsidized” health plan, we are a Full Service Private Marketplace.

Your income will be checked with the IRS records or a Federal Database, so if you claim a certain income, the “Exchange” will check with the IRS of your past years’ income tax records – before you get approved for a subsidy.

Individuals and families will state their income based on their MAGI or Modified Adjusted Gross Income (see definition).  That information will then be verified through the IRS against your previous tax returns.  If the stated income on the application is more than 10% lower than what the IRS shows, the State will require the individual to prove their income within 90 days, but you’ll still get enrolled.  Your financial information is run through a Data Services Hub (a tool the government is using to verify applicant information and income for the “Advanced Premium Tax Credits”) to see if you qualify for a subsidy.

BE CAREFUL HERE!!!  You do not want to understate your income or you could end up owing money to the IRS.  For example, if your premiums are $1,000/month and you get an Advanced Premium Tax Credit of $800/month and you only have to pay $200/month.  When you do your taxes and file your tax return each year, the Government will check your income.  IF you were only supposed to have received an Advanced Tax Credit of $700/month instead of $800/month, you’ll owe the IRS an extra $100/month X 12 months equals $1,200.

How do you avoid this?  Read the “Redetermination for Income Changes” and the “Reconciliation of Premium Credits” definition(s).

The Advanced Premium Tax Credit is an “estimation” of your pre-tax credit, so if you’ve received too much “credit,” you’ll end up paying it back.

Please note:  If you are providing health insurance to your employees, and only to your employee, in Nevada the employee’s spouse and children are able to get a subsidized plan.  But the subsidy is based off of the “household” income.  HOWEVER, if you DO OFFER coverage to the spouse and dependents and they elect not to take the coverage for whatever reason (the spouse may feel your employer plan is too expensive), then that spouse is NOT able to get a subsidized plan!  Please keep this in mind.  You may repel employees if you are not careful.[/usa_item][usa_item acc_title=”Affordable”]The definition of affordable is different for employers and individuals.  The Government defines “affordable.”  For employees receiving their benefits from an employer, if the employee portion of the health insurance the employer provides costs more than 9.66% of the employee’s income, and it doesn’t cover at least 60% (Minimum Value) of the employees medical expenses, this is considered to be “unaffordable.”  If your insurance is “unaffordable,” you are then permitted to see if you qualify for a Subsidy (see Advanced Premium Tax Credit.)  If the employee’s insurance from their employer is affordable, then the employee is NOT eligible for a tax subsidy.

If you do not receive health insurance from your employer, as individuals or families, if your portion of the health insurance premium costs more than 8% of your household income, it is considered “unaffordable,” which means you don’t have to buy a medical plan “excludable.” [/usa_item][usa_item acc_title=”Age 26″]IF and emphasizing the word IF your plan covers dependents (children), your plan now must cover them up to their 26th birthday.  It does NOT matter if your children are married, live at home, are students, or are on your taxes.  Nothing matters but that they are your children.  The only exception would be that if your child is under 26 years old and you (the parent) have a grandfathered plan (a plan prior to 3/23/2010 – check with your plan to see if you are grandfathered,) then IF your child is offered insurance at THEIR job, they must take that insurance up until 1/1/2014.  After 1/1/2014 all dependent children up to their 26th birthday may stay on their parents plan if it is offered.  If your child has severe mental and/or medical conditions, they may be able to stay on the parents plan longer, see the plan benefits.  [/usa_item][usa_item acc_title=”Aggregation Rules”]If any “Common Control” aspect of 1 or multiple businesses is owned by 1 person or any member of his family or extended family or business partners (common owner/common interests) the number of employees will “Aggregate”.  It DOES NOT MATTER if the different businesses are separate in any way; TIN, etc.  The only thing that matters is what the relationship is, defined in the Aggregation Rules – all employees will get added together.  The aggregation rule is very complex and speaking with an Attorney and/or Accountant that specializes in the Affordable Care Act – Aggregation Rules is highly recommended.[/usa_item][usa_item acc_title=”Automatic Enrollment”]If an employer has over 200 employees, they will be required to automatically enroll their employees into their existing group health insurance plan.  The details of this are being worked out now at the Department of Labor, and will probably happen closer to 2015.  Details will follow.
[/usa_item][usa_item acc_title=”AV (Actuarial Value)”]This is a percentage of the costs that are covered by the insurance company.   It is the larger percentage of coverage the insurance company pays for.  This is not what the employee or employer is paying.  It is the insurance company’s portion.  Your portion will be the smaller portion for example, 40% for Bronze, 30% for Silver, 20% for Gold, and 10% for Platinum.  Don’t worry that your percentage goes on forever, there is always an “Out of Pocket Maximum” for you and your family.  This Out of Pocket Maximum you’ll see mentioned is your pocket.  This means the most you’d have to pay out of your pocket in the year.   There are no lifetime or annual limits for these 10 Essential Health Benefits the insurance company has to pay for:

♦ Ambulatory patient services (clinics, doctors office, same-day surgery centers, etc.)

♦ Emergency services

♦ Hospitalization

♦ Maternity and newborn care

♦ Mental health and substance use disorder services, including behavioral health treatment

♦ Prescription drugs (read below)

♦ Rehabilitative and habilitative services and devices

♦ Laboratory services

♦ Preventive and wellness services and chronic disease managemen

♦ Pediatric services, including dental and vision care (read below)

Dental for “Pediatrics” means anyone under the age of 19 must be offered a dental plan ON Exchange, and a built in dental plan OFF Exchange.

Vision for children under the age of 19 is covered, 1 visit per year, 1 pair of glasses per year are covered. The pediatric vision has to be covered on and off of the exchange.

Your insurance company must also allow members to request to have a drug covered that they need that the insurance company does not cover.[/usa_item][usa_item acc_title=” Benchmark Plan”]The State of Nevada is using the “Benchmark” plan from HPN – Health Plan of Nevada’s plan POS Group 1 C XV 500 HCR.  This plan will set the standard as to how all the other “Qualified Health Plans’” in Nevada will be.   It creates a baseline for the 10 “Essential Health Benefits” (see definition) that all other health insurance plans in Nevada are required to cover on the Individual and SHOP Exchanges, so all other plans must have essentially the same level of coverage as Nevada’s chosen “Benchmark” plan for these “Essential Health Benefits.” 

This benchmark plan will define the essential health benefits that must be covered in Nevada health insurance plans to follow from 1/1/2014 and beyond (except for grandfathered plans and large group insurance plans.)   

(See Essential Health Benefits definition.)[/usa_item][usa_item acc_title=”Cadillac Plans”]Not implemented until 2018.  We will find out much more as time goes on.[/usa_item][usa_item acc_title=”$2500 Cap on FSA and Cafeteria Plans”]Beginning on 1/1/2013 there will be a $2,500 limit on annual salary reduction contributions to health FSAs offered under Cafeteria Plans.  The Cap has been reduced from $5000 to $2500.  The same limit but indexed for inflation for 2014 applies.  There is not a limit for the employer to contribute, however.  A debit card program can be used to pay for eligible expenses tax free from the FSA but there are stipulations to make it eligible.  You must have a prescription for OTC (over the counter) medications, otherwise you cannot use your FSA.   If 2 adults in the home are working and both have FSA accounts, they both can have their separate $2,500 per account.  This $2,500 cap applies to grandfathered plans also.[/usa_item][usa_item acc_title=”CDHP (Consumer Driven Health Plans) HSA, FSA, HRA and Archer MSA”]FSA’s and HSA’s are allowed to reimburse for medicines and prescription drugs with tax free funds, but only if there is a prescription, whether the medication is OTC or not OTC (over the counter,) you MUST have a prescription.  Medical devices like crutches, and medical supplies like Blood Sugar kits do not require a prescription.  Make sure you have your receipt for reimbursement.[/usa_item][usa_item acc_title=”Child Only Plans – Kids”]Each insurance company that has plans on the Exchange for an individual or family MUST also have the same plan available for “children only” under age 21.  The plans will be the same as they are for adults; Platinum, Gold, Silver, or Bronze.    [/usa_item][usa_item acc_title=”CHIP (Children’s Health Insurance Program)”]Kids whose parents make less than 200% of the federal poverty level are eligible for CHIP.  Funding was extended to 2015.[/usa_item][usa_item acc_title=”Claims Appeal”]Starting in 2010, there is now has an enhanced, more thorough appeals process with the passage of the ACA (Obamacare.)  The purpose of this enhancement is to make it harder for insurance companies to deny claims from their members.  If you’ve had medical claims that have been denied, or if you’ve had a retroactive rescission (policy gets cancelled for months already in the past,) this appeal process applies to those scenarios also.  More protection is available to you, and the ability to go outside of the internal appeals process is now available.   You can get your claim looked at by an “external review” panel  up to 4 months after the internal review comes back denied, if it did indeed get denied by the internal review process.   This external review panel is called an “IRO” – an Independent Review Organization.  But this IRO review can only happen after the internal review completes its internal appeals process and gives the person appealing a “full and fair review,” which means you get to review the paperwork from the insurance company that is denying your claim.  The IRO will look at the claim as if it’s a brand new appeal.  Like fresh new eyes looking at your claim.  They will have a decision back in 45 days.  If you need or if the IRO wants additional information for your case, you’ll only have 10 days to get it to them after they begin their work.  Many folks still feel like they have to get lawyers involved in denied claims process.  If a claim gets denied after the IRO completes the review, the member will become responsible for the bill.

If the insurance company denies the claim at the lower level, you may then move up in ranks until you’ve exhausted the lower level appeals.  If the 2nd level of appeals within the insurance company results in a final result called a “final adverse benefit determination” (means you are still told no,) then you are now able to move to the external review process.   The external review is conducted by a 3rd party outside entity called an IRO (Independent Review Organization) that will review the claim.  You must ask and initiate the external review, it’s not an automatic process.

Websites that are available to assist with claims is:  www.dol.gov/ebsa/healthreform and on that page look for the section “Internal Claims and Appeals and External Review” or http://www.cms.gov/CCIIO/Programs-and-Initiatives/Consumer-Support-and-Information/External-Appeals.html

Conflict of interest – the insurance company cannot hire someone that will have the interest or support of the insurance company in denying claims.  The regulation says that the first person to review the claim and deny the claim has to be someone else that reviews the appeal, so the same person is not reviewing their own denial of the initial claim, and any medical experts involved in consulting the appeal has to be different than the same person that reviewed the claim initially.

The insurance company cannot stop providing coverage for ongoing treatment without providing advanced notice.  Those that have a very serious life-threatening medical condition can have their appeal pushed through more quickly.  In addition to denied claims there are other grievances that can be appealed.

Appeal  – Items you may appeal at the State of Nevada Exchange are:

♦ Advanced Premium Tax Credits amounts and eligibility

♦ Cost Sharing Percentage

♦ Catastrophic plan eligibility

♦ Incarceration

♦ Minimal Essential Coverage affordability

♦ Your residency

♦ Legal Status

♦ Dependent Eligibility

♦ Tribal affiliation

♦ Social Security Number

♦ Your ability to be exempt from the bill

♦ Medicaid and CHIP (handled by DWSS (Division of Welfare and Supportive Services)

♦ Life Events like Birth, Adoption, Divorce, Loss of Job, etc.

♦ Processing

♦ System functionality

♦ Timeliness of application

♦ Dropped from an Insurance Company

♦ Misconduct by your enroller

[/usa_item][usa_item acc_title=”Clinical Trials”]Starting 2014 there will be increased coverage in your health insurance plan for clinical trials phases 1-4 for qualified members.  You must use an in network provider.  The trials must be participating in cancer research, approved clinical trials, any life threatening disease that is funded by the Federal Government and conducted with an investigational drug (or exempt from an investigational drug).  In order to participate you may need an in network doctor’s recommendation to participate, or provide “medical and scientific information” showing that it is appropriate for you to participate in the trial.  Clinical trial participants cannot be discriminated against or charged more for routine patient costs for the trial, but the participant must see a provider in the network.  Ask your insurance company if your plan participates in clinical trials.  If yes, the clinical trial must also accept you.    [/usa_item][usa_item acc_title=”COBRA Insurance”]This acronym (COBRA) refers to the Consolidated Omnibus Budget Reconciliation Act of 1985.  The law requires group medical plans covering twenty employees or more to offer participants the option to receive continued healthcare benefits for up to eighteen months after the cancellation of their group plan.[/usa_item][usa_item acc_title=”Community Rating”]Everyone pays the same in an area.  Most of the plans in 2014 and beyond will be calculated using a “Modified Community Rating” (see definition.)

Composite Rating  – A composite rating is where premiums are the same for each member being covered.  Under a composite rating plan, all members receive the same benefits for the same price.   All members would have their age related risks added up and averaged out and dividing that number by the number of members, sometimes even health risks are averaged out.  This method of rating is easier to administer.  A disadvantage to this method is younger healthier members usually pay more.  We may see more Member Level Rating in the Small Group market with health care reform.[/usa_item][usa_item acc_title=”CO-OP (Consumer Operated and Oriented Plans)”]This is a new government program with the ACA (Obamacare) that gives loans to nonprofit companies to create member run (the board is elected to run the CO-OP and it must be members that are covered under these plans) consumer governed insurance plans.  These medical plans must be “Qualified Health Plans” and be on the public exchange and SHOP exchange and have interest in the well being of our community. [/usa_item][usa_item acc_title=”Cost Containment Strategies”]These were strategies employers and insurance companies used to help contain costs: medical underwriting, waiting periods, high deductibles, yearly maximums, limited number of co-pays, lifetime maximums, etc.  The ACA – Health care reform will not allow a lot of these techniques.  As a consequence, we can expect better health plans, but with it, costs are likely to rise. [/usa_item][usa_item acc_title=”Defined Contribution Health Plan”]Simply put, employers can “define a contribution” (different than “defined benefit” like group insurance) to allocate an amount of money each month (does not necessarily have to fund) to help their employees pay for medical expenses like Dental and vision premiums, critical illness, accident coverage, for seniors MAPD’s, Medicare Supplement plans, Part B, from their “Reimbursement” arrangement.  Employers can choose the monthly amounts, and if they will allow the funds to roll over at the end of the year, and if so, how much to roll over. 

There is great flexibility with an HRA.  Employers define the contribution amount according to groups of employees (floor staff, managers etc.).[/usa_item][usa_item acc_title=”Definition of Large Group”]In Nevada an employer that employed an average of at least 51+employees on business days during the preceding calendar year.  See “Full Time Equivalent Employees for the Tax Penalty” and “Play or Pay Tax Penalty “Employer Mandate” definitions. 

Large employers are required from 1/1/2015 to provide health insurance to their employees and dependents (kids).[/usa_item][usa_item acc_title=”Definition of Small Group”]Is an employer that employs 1 to 50 (in Nevada) employees.  This is not equivalent employees or part time or full time employees.  It’s just an employer that employs between 1 to 50 employees.  Small group employers are NOT required to offer health insurance to their employees.  Small Group Employers have the option to provide insurance if they so desire.

Only Large Employers with  50 or more “Full Time Equivalent Employees” are required to provide health insurance to their employees or get a tax penalty starting in 2015.  See definition for “Full Time Equivalent Employees for the Tax Penalty ”and “Large Group” and “Play or Pay Tax Penalty “Employer Mandate ”.[/usa_item][usa_item acc_title=”Dental Insurance”]Dental for “Pediatrics” means anyone under the age of 19 must be offered a dental plan ON Exchange, and a built in dental plan OFF Exchange.

Vision for children under the age of 19 is covered, 1 visit per year, 1 pair of glasses per year are covered. The pediatric vision has to be covered on and off of the exchange.

Your insurance company must also allow members to request to have a drug covered that they need that the insurance company does not cover.

The pediatric dental has to be offered on exchange and covered off of the exchange.[/usa_item][usa_item acc_title=”Dependent Child – Dependents on Taxes”]Could be Biological, Adopted, Foster, Step Child (check your tax filing,) Legal Custody.  Children who are defined as not being a dependent child would be:  grandchildren, domestic partners’ children that are not adopted (check your tax filing), spouse of an adult dependent (age 26 and younger who is married) and is receiving benefits from their parent.  A dependent child may stay on his parents plan until the age of 26 if coverage is offered for dependents, or a child may enroll in a “child only” plan (til age 21) also.  The age 26 rule has possible exceptions for severe cases of medically/mentally challenged dependents to possibly stay on the parents plan beyond age 26.  (See Age 26 definition)   We HIGHLY recommend you speak with your tax accountant in that this definition is based on the IRS’s definition of a dependent.[/usa_item][usa_item acc_title=”Do Not Qualify for Tax Credit or Subsidy (Financial Assistance) “]You will not qualify for a tax subsidy if you have been offered employer insurance for yourself that is “affordable” (see definition), or your spouse or kids have been offered insurance, or If you have a Federal insurance plan like the VA, Tricare, Medicare, etc., or if you get State assistance (Medicaid, etc.). 

Call us and we’ll help you determine if you qualify to get financial assistance (subsidy), and help you make a decision on which plan is best for you.[/usa_item][usa_item acc_title=”Doctors Bills and Free Preventative Visits”]If your doctor bills the insurance company 2 different bills for 1 visit, you will get a medical bill to pay.  For example, if you see a doctor for a routine preventative visit like a “check-up,” or a “well child check” or a “Female exam” and in the same doctor visit have your prescription for asthma medication renewed, if your doctor sends the insurance company 1 bill, you will not be billed.  If your doctor bills 2 bills, one for preventative and 1 for the asthma follow up, you’ll get a bill for the asthma. 

We suggest that if you go to see the doctor for preventative services, do not talk about or have any other services performed.  This way, your FREE preventative service will remain free and you should not see a bill.  

Be careful to stay within your network for preventative care.  [/usa_item][usa_item acc_title=”ERRP – Early Retiree Reimbursement Plan”]Starting 6/1/2010, $5 Billion was earmarked for employers to be reimbursed for medical costs they paid for their early retired employees.  Employers of approved group health insurance plans could get reimbursed for health cost claims they paid for from this ERRP program.  The purpose of the plan was to provide a bridge of medical expenses reimbursement to the employers for benefits paid for early retirees (age 55 or older, no longer an employee, and not eligible for social security benefits) between early retirement, and 2014, when the new ACA (health care reform) plans became available. 

Employers could get a reimbursement for claims paid for medical, surgical, hospital and prescription expenses paid.  The guidelines are that claims that were paid that cost more than $15,000 and less than $90,000 could get reimbursed to the employer up to 80% of the claims paid.  This means the maximum any employer could get reimbursed for any one employee would be $60,000.  Employers had to be accepted into this plan.  No more applications are being taken.  This benefit covered the employee, and their dependents, and their spouse’s claims.  The money reimbursed had to go back into the employer’s plan for their existing participants.  Documentation for this program must be kept for 6 years.[/usa_item][usa_item acc_title=”Essential Health Benefits (EHB’s)”]What are “Essential Health Benefits” and who has to have them?  From 1/1/2014 on, all new health plans (insured small group and individual health insurance plans) must cover the 10 bulleted benefits below, in order to avoid a tax penalty.   Qualified Health Plans MUST cover these 10 items without any lifetime or annual limits on these “Essential Health Benefits.”    There are exceptions to those that have to buy these plans.  Those folks that have a State or Federal plan (Medicare, Medicaid, VA, Tricare, CHIP etc.) or are a part of an Employer Group that provides benefits or are “Grandfathered” or that the insurance is “unaffordable” (see definition) won’t need to buy. 

All the rest of us, unless we are “Exempt” (see definition) our plan must cover these benefits to be the correct kind of insurance to avoid paying the tax penalty, or until our insurance company tells us our current policy we have now (only if it’s a major medical policy) renews and we must buy a “Qualified Health Plan” that has the following benefits:

♦ Ambulatory patient services  (clinics, doctors office, same-day surgery centers, etc.)

♦ Emergency services

♦ Hospitalization

♦ Maternity and newborn care

♦ Mental health and substance use disorder services, including behavioral health treatment

♦ Prescription drugs

♦ Rehabilitative and habilitative services and devices

♦ Laboratory services

♦ Preventive and wellness services and chronic disease management

♦ Pediatric services, including dental and vision care (see below)

Dental for “Pediatrics” means anyone under the age of 19 must be offered a dental plan ON Exchange, and a built in dental plan OFF Exchange.

Vision for children under the age of 19 is covered, 1 visit per year, 1 pair of glasses per year are covered. The pediatric vision has to be covered on and off of the exchange.

Your insurance company must also allow members to request to have a drug covered that they need that the insurance company does not cover.[/usa_item][usa_item acc_title=”Exchange”]An Exchange is a website with Health Insurance Plans to buy from.  It works kind of like how Travelocity works.  Travelocity is a website where you can shop for airline tickets with different airlines companies to choose from.  Different insurance companies (like Anthem BCBS, United Health Care, HPN, Sierra, Aetna, Humana, St. Mary’s, Nevada Health CO-OP) can sell their health plans on an Exchange (website).  There are many “Exchanges” kind of like there are many websites for buying an airline ticket, like Travelocity, Cheap O Air, Orbitz, Priceline etc.  

The Public (Government) Exchange can offer “subsidized” (see definition) plans and unsubsidized plans on their Exchange.  They cannot, however, sell insurance companies plans that do not offer subsidies.  For 2014, most of the subsidized plans that are on the Government Exchange are HMO’s.

There are also Private Exchanges (like this website here at the Nevada Insurance Enrollment Marketplace).  We are a full service “Private” exchange.  We can assist you with both subsidized plans where the government helps pay for your premiums, and also un-subsidized plans (if you make too much money to qualify to get help in paying for your insurance).

Depending on your household income, you may or may not qualify for financial assistance in paying for your health insurance plan.  We have a full spectrum of choices, HMO’s, PPO’s, Medicare and other supplemental plans like Dental, Vision, Critical Illness, Disability Insurance and many others – to keep you well covered.

You will not qualify for a tax subsidy if you have employer insurance for yourself that is “affordable” or if you have a Federal insurance plan like the VA, Tricare, Medicare, etc., or if you get State assistance (Medicaid, etc.)  Call us and we’ll help you determine if you qualify to get financial assistance (subsidy) and help you make a decision on which plan is best for you.

Only the “Individual Exchange” offers subsidies, the SHOP Exchange does not have subsidies.     [/usa_item][usa_item acc_title=”Exchange Notice”]By 10/1/2013 your employer is required to hand out a notice about the government Public Exchange.  It is required by law for almost all employers to inform their employees about the public exchange and that employees may be eligible for tax subsidies.[/usa_item][usa_item acc_title=”Exempt and Exemptions. Not Subject to Buying Health Insurance”]From 1/1/2014 and beyond we all must have health insurance that is considered to have “Minimal Essential Coverage” or have a “Qualified Health Plan” or have a State or Federal plan, or a “Self-Funded” plan. 

There are exceptions to that rule:  prisoners, anyone who’s health care goes against their religious conscious or healthcare ministry members, undocumented aliens.  Then we have those that are “Exempted” – those who’s wages are so low that they are not required to file a tax return, Native Americans, children of exempted adults (an example would be kids of prisoners), those that can prove they have a hardship (ex: death, extreme medical bills, etc.), those that live out of the USA, coverage is “unaffordable” (more than 8% of their household income).[/usa_item][usa_item acc_title=”Federally Facilitated Exchange”]A state that chooses to have the Federal Government set up and run their public Exchange for them is called a “Federally Facilitated Exchange.”  The State of Nevada initially operated its own public (Government run) Exchange, it was a State run exchange called a “State Based Exchange” but has now switched to a Federally Facilitated Exchange. [/usa_item][usa_item acc_title=”FSA (Flexible Spending Accounts)”]An FSA allows employees to set aside a portion of their pre-tax income to pay for “qualified expenses” from their cafeteria plan.  FSA’s are commonly used for medical expenses but can be used for childcare or other expenses.  A disadvantage to using an FSA is that money not used in the FSA by the end of the year is lost, there is the “use it or lose it” rule.  Starting in year 2013 Flexible Spending Accounts had their “contribution amount” limited from the employee’s salary reduction to $2500.  The same limit but indexed for inflation for 2014 also.  There is not a limit however, for the employer to contribute.  A debit card program can be used to pay for eligible expenses tax free from the FSA but there are stipulations to make it eligible.

You must have a prescription for OTC (over the counter) medications, otherwise you cannot use your FSA for OTC purchases.  This $2,500 cap applies to grandfathered plans too.  If 2 adults in the home are working and both have FSA accounts, they both can have their separate $2,500 per account.  Starting in 2011 and beyond, in order for an employee to get their medical expenses processed for reimbursement out of their FSA, the employee needs to have a prescription and/or a copy of the prescription and can require a receipt.
[/usa_item][usa_item acc_title=”Free Preventative Services”]From the Health and Human Services website, here are some examples of what is covered, without co-pays, co-insurance, or deductibles.

Make sure the doctor’s office bills you correctly for “Preventative” services.  If you see the doctor for preventative services only, you should not see a bill.  We suggest that if you go to see the doctor for preventative services, do not talk about or have any other services performed.  This way, your FREE preventative service will remain free and you should not see a bill.  

Be careful to stay within your network for preventative care.

Those preventative services rated an A or B rating from the U.S. Preventative Services Task Force:

Children (0-17): Coverage includes regular pediatrician visits, vision and hearing screening, developmental assessments, immunizations, and screening and counseling to address obesity and help children maintain a healthy weight.

Women (18-64): Coverage includes cancer screening such as pap smears for those ages 21 to 64, mammograms for those ages 50 to 64, and colonoscopy for those ages 50 to 64, recommended immunizations such as HPV vaccination for those ages 19 to 26, flu shots for all adults, and meningococcal and pneumococcal vaccinations for high-risk adults, healthy diet counseling and obesity screening, cholesterol and blood pressure screening, screening for sexually-transmitted infections and HIV, depression screening, and tobacco-use counseling.  For plan years (in the individual market, policy years) beginning on or after August 1, 2012, additional preventive services specific to women, such as well-woman visits, screening for gestational diabetes, domestic violence screening and counseling, prescriptions, FDA-approved contraception, must be covered with no cost sharing.

Men (18-64): Coverage includes recommended immunizations such as flu shots for all adults and meningococcal and pneumococcal vaccinations for high-risk adults, cancer screening including colonoscopy for adults 50 to 64, healthy diet counseling and obesity screening, cholesterol and blood pressure screening, screening for HIV, depression screening, and tobacco-use counseling.

 **PLEASE NOTE – If your doctor bills 2 separate bills for your one visit, you will be billed for the portion of the office visit that was not preventative.  For example, if you see a doctor for a routine physical, and in the same visit you need your prescription refilled, IF the doctor bills 2 separate bills for that visit, the physical will be free, but the prescription refill portion of that visit will be charged.  IF the doctor bills everything on 1 bill, you will not be charged.  We suggest that if you go to see the doctor for preventative services, do not talk about or have any other services performed.  This way, your FREE preventative service will remain free and you should not see a bill.

Be careful to stay within your network for preventative care.
[/usa_item][usa_item acc_title=”Free Preventative + Decrease in out of pocket expenses like Deductibles, Co-Insurance, Co-Pays”]With Health Care Reform –insurance companies (and group insurance plans) are required to limit how much they make their members pay (you and me) in deductibles, co-insurance and co-pays.  For example, with Preventative health care there are no co-pays, co-insurance or deductibles.  Preventative is FREE.   If you see the doctor for preventative services only, when you visit, you should not see a bill.  (See Cost Sharing Reduction definition.)

The most (out of your pocket maximum) in 2014 a single person would have to pay would be $6,350 and for families it would be $12,700.  This is for these “Essential Health Benefits.”  This does NOT include your premium payments, or for additional benefits your health insurance plan may offer.

Individuals and families without insurance from an employer whose income is less than 250% of the federal poverty level, their “cost sharing” is reduced even further.  This means your portion of the deductible, co-insurance, and co-pays will be less than what someone making over 300% or 400% or more of the federal poverty level would pay.

For Small Businesses buying on the SHOP exchange, the deductibles will be $2,000 for singles and $4,000 for families.  There may be provisions for that deductible limit in the SHOP exchange to be more in the bronze level, plus there can be adjustments for medical inflation cost increases also.   There are NOT cost sharing reductions on the SHOP Exchange for medium or for Large Employers.  Only on the “Individual Exchange” but preventative is free.    [/usa_item][usa_item acc_title=”Full Time Employees Hours Calculation to determine “Full Time Status””]This is different than your Full Time Equivalent Employees.  If your employees have worked different hours each week, to determine if they truly are full time, you can use the method below to calculate full time employees.  Full time is defined as working 30 or more hours per week.  There are 3 periods in this calculating cycle.

1). The Measurement Period:  As an employer you’ll have employees coming and going and this can create a problem in determining who is full time and who is part time.  Employers will need to figure out if their existing employees are considered to be full time.  (New employees see definition below)  The employer will need to pick any length of time to measure, somewhere between 3 to 12 months to measure hours. 

The 1st step in the calculation (measurement period) would be to track the ALL the hours worked by ALL these employees (best method).  Track each employee separately.  If you don’t track hours (we recommend you track hours), you can use the “days worked” or the “weeks worked” method also.  Days worked – you count 8 hours regardless of how many hours they actually worked in the day (not as accurate as hours worked).  Or Weeks worked, you count a full 40 hours week worked even if the employee only worked 1 hour in that week (not as accurate as hours or days worked).  For hourly employees you must include actual hours worked and for non-worked hours paid for sick days, vacation days, holidays, jury duty, any paid leave.  For employees that are salaried employees, you must credit 8 hours for each day the employee worked at least one hour in that day, or 40 hours per week for each week in which the employee worked one hour of service.

Add up ALL the hours worked by EACH employee during whatever “measurement period” you’ve chosen (3-12 months).  Take that number and DIVIDE it by the number of weeks in your measurement period.  If the number is greater than 30 hours in a week, then that employee is full time and for Large Employers, this requires that you must provide health insurance benefits starting in 2015 for the “Employer Mandate” also called the “Play or Pay Tax”.

For example, let’s say one of your employees works a total of 375 hours in a 3 month period.  So 375 divided by 12 weeks (12 weeks in a 3 month period) = 31.25.  This employee is full time.

2). The Administrative Period:  This is an optional period up to a maximum of 90 days where the administering of the plan begins.  Picking a plan, notify employees of plan options, enrolling employees.  The total length of the measurement period and the administrative period can’t be more than 13 months combined together.  Large employers will be required to offer health insurance coverage for the coming plan year to any of their full time employees that were determined during the standard measurement period to have full time status.  See “play or pay tax” definition.

3). The Stability Period:  When coverage begins for those employees that were determined to be eligible for coverage during the Measurement Period.  Large Employers will continue to cover or not cover employees as was determined in the Measurement period regardless of their average weekly hours they are working during the stability period for that plan year.

New Employees: For newly hired full time employees (work 30 hours+ per week) there is not a  measurement or administrative period.  The new full time employee must be offered coverage that becomes effective no later than 90 days following their date of hire.  This includes temporary employees that work full time hours too.

There are always different scenarios to each business’ circumstances.  This definition is to be used “generally” and not specifically.  Please call us here at the Nevada Insurance Enrollment Marketplace to go over your individual circumstances.     [/usa_item][usa_item acc_title=”Full Time Equivalent Employees for the Tax Penalty”]is used to figure out if a large employer will get penalized for the “Play or Pay Tax”.  First you must figure out if you have 50 or more Full Time Equivalent Employees.  If you have 50 or more Full Time employees (work over 30 hours / week) you know you fall in this Large Employer category and are subject to the Play or Pay Tax.  If the employer is considered a large employer or near large employer, it’s best if this calculation is done on a monthly basis.  If not, the preceding calendar year.  For example, if a large employer has 40 Full Time employees (employees that work >30 hours/week) and 32 Part Time employees (who’s average hours worked each week equal 20 hours weekly) they would have 61 Full Time Equivalent Employees.  (See calculations below)  This Employer WOULD be subject to the Pay or Play tax.  They have over 50 Full Time Equivalent Employees.

To calculate your FTE (Full Time Equivalent Employees):

1). Count the FT employees (work >30 hours/week) – In the above example we have 40.

2). Figure out first who your excluded employees are.  This would be seasonal workers that work less than 120 days in a calendar year, leased employees (temps) self-employed (owners) or any owner that owns 2% or more of an S-Corp, or 5% of a Corporation.  Certain family members such as: Children, Siblings, Step-siblings, Parents, Step-parents, Nieces, Nephews,  Aunts, Uncles, Sons-in law, Daughters-in-law, Fathers-in-law, Brothers-in-law, Mothers –in-law, Sisters-in-law, Dependents, Ancestry, and any member of the household of an owner or partner who qualifies as a dependent.  These folks you would exclude from the calculation.  Also exclude the employees in their waiting period before benefits begin.

3). Who’s left?  Your Part Time employees + seasonal employees (that worked over 120 days/year).  Add up ALL OF THEIR HOURS together, then divide by 120.  This gives you your “Equivalent” employees.

4). In the above example:  32 P.T. employees, they work 20 hours/week.   32X20 = 640 hours/week X 4 weeks in a month = 2560 hours worked by all part time employees in the month.  Now DIVIDE 2560 by 120 = 21.3 “Equivalent” Employees.   You always drop the remainder, so this gives you 21 “Equivalent” Employees.  Add this number to your full time employees.   In this example, we have 61 Full Time Equivalent Employees, 40 Full Time and 21 Equivalent employees, so in this example the employer would be SUBJECT to the tax. 

Most important note: You are penalized on your Full Time employees only.  Not on the equivalent employees.  We add the full time equivalent employees to the full time employees to see if we are subject to the penalty.  So using this example, we have 40 Full Time Employees MINUS the 1st 30 Full Time Employees.  Therefore we are going to be penalized for 10 Full Time Employees.  10x$166.67 each month = $1,666.70 monthly, or $20,000.40 yearly.  You will want to calculate this number each month.  Notice we didn’t calculate this number from 61 but from 40.  We only calculate the “equivalent” employees to see if we have over 50 full time equivalent employees for the play or pay tax.  Calculate this monthly. 

Aggregation rules (see definition) DO apply.  Be very careful here.  Splitting up your businesses into different entities will not relieve a business owner from becoming subject to the Pay or Play tax.  If any “Common Control” aspect of 1 or multiple businesses is owned by 1 person or any member of his family or extended family or business partners (common owner/common interests) the number of employees will “Aggregate”.  It DOES NOT MATTER if the different businesses are separate in any way; TIN, etc.  The only thing that matters is what the relationship is, defined in the Aggregation Rules – all employees will get added together.  The aggregation rule is very complex and speaking with an Attorney and/or Accountant that specializes in the Affordable Care Act Aggregation Rule is highly recommended. 

NOTE:  Seasonal Employees – if one (1) single seasonal employee that works over 120 days per year that is added to the Full Time equations and IF the seasonal workers put the employer above the 50 FTE threshold, then they are NOT to be subject to the tax.

ANOTHER NOTE:  Starting in 2015, Large employers that have 50 or more Full Time Equivalent Employees need to be aware that if you are providing insurance to your employees and their dependents (required by law to cover dependents – kids) and if you offer only to employee/dependent, the employee’s spouse is able to get a subsidized plan, BUT the subsidy is based off of the “Household” income.  HOWEVER, if you DO OFFER coverage to the spouse and they elect not to take the coverage for whatever reason (the spouse may feel your employer plan is too expensive) then that spouse is NOT able to go and get a subsidized plan!!  Please keep this in mind.  You may repel employees if you are not careful.
[/usa_item][usa_item acc_title=”Full Time Equivalents for the Play or Pay Tax”]To figure out your full time equivalent employees, you must first remove all of the “excluded” employees:  This would be your Full Time employees (work >30 hours / week), seasonal workers that work less than 120 days in a calendar year, leased employees (temps), self-employed (owners) or any owner that owns 2% or more of an S-Corp, or 5% of a Corporation.  Certain family members such as: Children, Siblings, Step-siblings, Parents, Step-parents, Nieces, Nephews,  Aunts, Uncles, Sons-in law, Daughters-in-law, Fathers-in-law, Brothers-in-law, Mothers-in-law, Sisters-in-law, Dependents, Ancestry, and any member of the household of an owner or partner who qualifies as a dependent.  This also includes employees in their waiting period before benefits begin.

Now, everyone else: Your part time employees + seasonal employees (that worked over 120 days/year).  Add up ALL OF THEIR HOURS together, then divide by 120.  This gives you your “Equivalent” employees.  To get your Total Full Time Equivalent Employees, add this number to your Full Time Employees (employees that work over 30 hours per week).  This gives you your “full time equivalent employees”.  We recommend you calculate this monthly for the “Play or Pay” tax.

If you need assistance figuring out your full time employees, see the definition.
[/usa_item][usa_item acc_title=”Goals for Health Care Reform – The ACA”]Insure more American’s, expand Medicaid to make more citizens eligible to qualify for Medicaid.  Make health care more affordable with subsidies.  Include many preventative care services for free to help reduce the overall cost of medical care by catching problems early before they turn into more serious expensive treatments.  To improve the quality of health care customers receive (Accountable Care Organizations – see definition).  Make costs more transparent for the customer.  Shift the burden of health care costs away from the customer.[/usa_item][usa_item acc_title=”Grandfathered Plans”]If you had your health insurance plan in place before 3/23/2010 and it has been continuously paid for and you have not taken any “restrictive actions” (see definition below) since 3/23/2010 and the required “notice” and “recordkeeping” requirements have been kept up to date, it may be a grandfathered plan.

Is there value in keeping your grandfathered status?  Some of the expensive changes to health care reform, grandfathered plans don’t have to comply with which may mean in the future you’d pay less for your premiums, but you’ll be missing out on some of the benefits.  Some of the DISADVANTAGES OF GRANDFATHERED PLANS is you lose flexibility in what you can and cannot do with your health plan.  Grandfathered plans are kind of considered frozen in time.

Probably one of the most important aspects to think about is, will your insurance company or your employer maintain the grandfathered plans?  Some of the insurance companies and employers that have grandfathered plans in existence today will not keep grandfathered plans because it is too costly for them to administer 2 different types of plans.  Grandfathered plans and the new Health Care Reform Qualified Health Plans.

If you are grandfathered, by law, the insurance company is required to describe benefits in any of its plan materials, and state that the plan is believed to be grandfathered.  You really should speak with your insurance company or employer to see if your plan is still grandfathered, and if yes, do they plan to keep that plan after 1/1/2014 grandfathered?  If they do not, you would be losing your grandfathered status.  Keeping a grandfathered plan will require homework and planning and patience.  You can keep your grandfather status indefinitely, but you must keep “Notice” and “Recordkeeping” regulation requirements indefinitely, as long as you have your grandfathered plan, to prove that it is grandfathered.  Keep your original records (policy) to prove you have a grandfathered plan in case you get audited, challenging your plan’s grandfathered status.

By 2014 Grandfathered plans must comply with all these changes from the ACA – Health Care Reform:

♦ Eliminate Lifetime and Annual maximums on “Essential Health Benefits.” (see definition)

♦ No more retroactive coverage rescission (see definition.)

♦ Dependents up to age 26 can go on parents plan

♦ There can be no more than a 90 day waiting period for new employees on a group plan before coverage starts

♦ Pre-existing conditions are covered for children under 19 years old, then total prohibition on all pre-existing conditions on grandfathered health plan members starting 1/1/2014

♦ Must get a copy of “Summary of Benefits and Coverage” which outlines what the plan covers

♦ Medical Loss Ratio Requirements– This is a new law that insurance companies MUST pay a minimum of 80% – 85% of all the dollars they collect in premiums MUST pay a medical claim.  In other words, if an insurance company collects $100 in a premium, $80 MUST pay a claim.  Not necessarily your claim, but some claim, or improve quality.

 

Grandfathered need NOT comply with these changes from the ACA – Health Care Reform:

♦ Transparency in coverage

♦ Clinical Trials (see definition)

♦ Quality of care reporting requirements

♦ Preventative health services

♦ Patient protections

♦ The new internal claims and appeals process

♦ Non-discrimination for health plans (means the plan can still underwrite)

♦ Fair health insurance premiums

♦ Guaranteed renewability/availability

♦ Essential health benefits (10 mandatory benefits – see definition)

♦ Comprehensive coverage

If you lose your grandfathered status on your plan, you can still keep the plan, it’s just the plan would then need to comply with ALL of the provisions of the ACA.

 

What is “Restrictive action?”  This means changes to your insurance plan that really are a disadvantage to the member – this causes a loss of the grandfather status.  These are restrictive actions that if taken will cause a loss of grandfathered status:

♦ Your insurance plan cannot reduce benefits or eliminate benefits.  Like if your plan covered mental health benefits on 3/23/2010, you must maintain mental health benefits coverage to maintain being grandfathered.

♦ The co-insurance cannot increase for the member, meaning going from an 80/20 down to a 70/30 (going from 20% to 30% for the employee to pay) is not allowed.

♦ Deductibles, an inflation adjustment of the “medical inflation” on your deductible or out of pocket max is allowed starting from 3/23/2010, (plus a maximum increase on deductible up to 15% for the life of your plan from 3/23/2010), but anything above that would cause you to lose your grandfathered status.  See your plan administrator to verify your grandfathered status.  There are mathematical calculations in this equation.

♦ Co-pays for the most part must be left alone with very minimal changes from the day the health care reform bill passed.  Like $5 or 15% above medical inflation for the life of the plan is the only allowed amount.  See your plan administrator before making changes to your co-pays to avoid losing grandfather status.  There are some mathematical calculations in this equation.

♦ Certain changes on “annual limits” or “lifetime limits” is a trigger to losing grandfather status.

♦ On employer plans, if the employer decreases his contributions to their employees over 5%  from what the employer contributed on 3/23/2010 could cause grandfather status loss.

♦ Anything that reduces benefits to the employee/member could cause you to lose your grandfathered status.   Your plan may still be “Grandfathered.”  You’d need to speak with your insurance company or plan administrator to see if you are still grandfathered.

You need to make sure the right paperwork has been filed and kept as long as you keep your grandfathered plan.  Notice and record keeping requirements means you can prove that your policy is still grandfathered, meaning you’ve not made “restrictions” or changes that are not allowable, and these records must be kept forever until you lose your grandfathered status.

The Can’s – You can change carriers, can eliminate coverage for a segment of your company, you can add benefits to the plan, you can change 3rd party administrators, and you can add new members.[/usa_item][usa_item acc_title=”HIPAA Coverage Insurance”]HIPAA plans will go away after 1/1/2014 because Nevadans will not need to go through underwriting anymore with the Affordable Care Act (Obamacare).  We are all guaranteed to get a health plan.[/usa_item][usa_item acc_title=”HRA’s – Defined Contribution (Health Reimbursement Arrangements)”]An HRA or Health Reimbursement Arrangement, is nothing more than a reimbursement, and there is no cap for reimbursement.  The HRA works the same way requesting reimbursements for a business trip would be.  If an employee needed to get reimbursed for their work related travel expenses, they would turn in their receipts to their employer for reimbursement. 

The same works for an HRA.  The employer with 100% tax deductible money reimburses the employee’s receipt tax free from the HRA for items like: dental and vision premiums, critical illness, accident coverage, for seniors MAPD’s, Med Sup plans, Part B.   The employer agrees to reimburse a certain dollar amount of receipts yearly or monthly, and that amount can roll over year after year and pay the above expenses.     [/usa_item][usa_item acc_title=”HSA’s (Health Savings Account)”]A Health Savings Account is an account that the employee puts money into that is tax free for medical expenses.  This money can grow year after year and can accumulate interest.  The HSA MUST be set up with a proper plan.  You cannot just choose any high deductible plan and open up an HSA at your bank.  You must have a plan that is HSA compatible.  You also must use the HSA funds properly for approved medical expenses only.  You can use your HSA account for OTC medications, but you MUST have a Doctor’s Prescription for it.  Otherwise, there is a hefty tax of 20% on top of your normal tax rate.  Be careful!

The contribution limits increase in 2014 to $3300 for individuals and $6550 for families.  The 2013 contribution limits for individuals are $3,250 and $6450 for families.[/usa_item][usa_item acc_title=”Individual Mandate”]We All Must Buy or Have Health Insurance.  This means we all must buy insurance or have a “Qualified Health Plan” (see definition) in place or “Minimum Essential Coverage” (see definition) or have a State or Federal plan, or a “Self-Funded” plan.  If you do not, you’ll pay a tax penalty (unless you are exempt – see below). 

Congress passed the Law and made it Constitutional to make everyone buy health insurance by Congress’ power to tax.  Your penalty for not buying health insurance will be:

♦ Penalty for 2014:  1% of your income OR $95/adult, $47.50/kid or $285 max – whichever is greater

♦ Penalty for 2015:  2% of your income OR $325/adult, $162.50/kid or $975 max – whichever is greater

♦ Penalty for 2016:  2.5% of your income OR $695/adult, $347.50/kid or $2085 max – whichever is greater

Those that are exempt are: prisoners, anyone who’s health care goes against their religious conscious or healthcare ministry members, undocumented aliens.  Then we have those that are “Exempted” – those who’s wages are so low that doesn’t require them to file a tax return, Native Americans, children of exempted adults (an example would be kids of prisoners,) those that can prove they have a hardship (ex:  death, extreme medical bills, etc.,) those that live out of the USA, coverage is “unaffordable” (more than 8% of their household income.)  Those individuals or families that had a short gap in coverage of less than 3 months.  The penalty is collected by taking the penalized amount from your tax return.
[/usa_item][usa_item acc_title=”Initial Enrollment Period (1st year of Obamacare)”]Initial Enrollment Period (1st year of Obamacare) is October 1st 2013 through March 31st 2014.  This is when we all enroll (unless you already have a major medical plan in place.)  If you enroll in October, November or December up to the 15th of December in 2013, your start date will be Jan 1st 2014.  After December 15th 2013, you’ll have a Feb 1st, 2014 start date.  Each month, if you enroll before the 15th, you’ll start the next month.  If you sign up after the 15th of Jan or Feb or March, you’ll start not the next month but the month after.   If you don’t qualify for a subsidy or you didn’t buy a health plan during the enrollment period, you may buy insurance anytime you would like, however, there is a 90 day waiting period, and you’ll be subject to a tax penalty for not having coverage, and the coverage can’t go back in time.   It is not wise to wait until you are sick to try and get coverage because you won’t be able to.  Small businesses can enroll into health insurance throughout the year.[/usa_item][usa_item acc_title=”Innovation Waiver”]On or After 1/1/2017 our State may be allowed to apply to wave any or all of the below requirements in the Health Insurance Exchange Market if we develop our own “innovative strategies” to provide our Nevadan residents with high quality affordable health coverage.  Waivable requirements are:

♦ Qualified Health Plans

♦ State Exchanges

♦ Individual Mandate (all must buy or get a tax penalty)

♦ Play or pay for large employers

♦ Cost Sharing reductions (see definition)

♦ Refundable tax credits for those that qualify

[/usa_item][usa_item acc_title=”Insurance Price Increases”]By law, 80-85% of all dollars collected in medical premiums will go towards paying for medical bills (claims) and improve quality.  So if your rate goes up, it’s because medical costs are going up, and overall there are more benefits and coverage in the new plans (called “Essential Health Benefits”) than there used to be with the new health care reform health plans, and no one can be turned down for insurance anymore for having pre-existing conditions.  These factors will cause premiums to rise.  New taxes and fees are in the end being passed down to members, law suits make prices go up, unhealthy choices in the way we eat makes prices go higher, new technological advances in health care makes prices go higher.  Many factors make insurance prices go higher. 

If the insurance company collects too much money from you, by law, they are required to send you back a check or give you credit.  With the price of health insurance, you may qualify for financial assistance call a “Subsidy” to help you afford a health insurance plan.  You may even qualify for Medicaid depending on your income.  Keep in mind, from now on, all dollars paid in medical claims, 80-85% of those premium dollars must pay claims or improve quality.[/usa_item][usa_item acc_title=”Large Employers NOT OFFERING Health Insurance – Penalty”]By Law, starting on 1/1/2015, an eligible large employer (an employer that has 50 or more Full Time Equivalent Employees (see definition) that is not providing health insurance to at least 95% of their Full Time Employees with a minimum coverage of 60% of the medical bills (called actuarial value – see definition) coverage is considered to be a “Paying” not “Playing” employer, or called a “Not Offering” health insurance employer.  They are subject to the tax penalty.  This is an “Employer Mandate”.  See also the Play or Pay Tax definition.

The Penalty begins for “Not Offering” Employers starting in year 2015, for those “large employers” (that have 50 or more Full Time Equivalent Employees or 50 Full Time employees) that do not offer health insurance benefits to their Full Time employees and their dependents (children), they will receive a penalty. 

These large employers that have 50+ full time equivalent employees, the penalty of $166.67/month for every single Full Time employee that doesn’t have insurance, will be charged to the employer (minus the first 30 Full Time employees).  This penalty gets triggered IF ONE Full Time employee buys a subsidized plan on the public individual exchange that is NOT offered “affordable” (over 9.66% of their Box 1 W2 income which is a “Safe Harbor” for employers) insurance.  The penalty is then calculated for all full time employees working over 30 hours each week MINUS the first 30 Full Time employees. 

IMPORTANT! TAX PENALTIES ARE NOT TAX DEDUCTIBLE. 

Employers, starting 1/1/2015, if you DO OFFER coverage to the spouse (by law you are required to offer to dependent children automatically) and they, the spouse, elect not to take the coverage for whatever reason (the spouse may feel like your employer plan is too expensive), then that spouse is NOT able to go and get a subsidized plan!  If you do NOT offer health insurance coverage to the spouse, then the spouse may get a subsidized plan, but the subsidy is based off of the “Household” income.  Please keep this in mind.  You may repel employees if you are not careful.  [/usa_item][usa_item acc_title=”Large Employers OFFERING Insurance”]By Law, starting on 1/1/2015, an eligible large employer that has 50 or more FT Equivalent employees that is “Playing” (providing health insurance) not “Paying” (will pay the tax penalty) is called an “offering employer”.  As an offering employer (providing health insurance),  you’ll need to make certain the plan you are offering covers at least 60% of all medical costs (this is called Actuarial value (AV) see definition).  This means the plan meets the “minimum essential coverage” (see definition) and that you are offering coverage to at least 95% of your Full Time employees and their dependents (kids).

You will also need to make sure the plan is “affordable”.  To do this, make sure the lowest cost “employee only” health plan you offer is not greater than 9.66 % of the employee’s [Box 1 W2] gross pay.  If employers follow this rule, this would be a “Safe Harbor” for them for tax penalties.  The easiest way to make sure the employer is compliant is to take the lowest paid employee and figure their Box 1 W2 Gross pay.  Make sure the yearly amount of the lowest priced “employee only” health plan that is offered to the employees is not greater than 9.66% of your employee’s Box 1 W2 wage.  Any of your employees’ portion of the premium that is over 9.66% of their Box 1 W2 Gross pay is considered “unaffordable”.

 The only way to trigger a penalty for a large employer offering health insurance is for a Full Time employee to go to the individual exchange and apply for a subsidy due to the plan that the plan being offered at work is “unaffordable” or that the plan doesn’t cover at least 60% (minimum essential coverage).  The employer would be responsible to pay the penalty of $250/month/FT employee (not equivalent) who receives a tax subsidy whose group insurance was considered “unaffordable” and didn’t cover at least 60% of their medical costs.  If the employer uses the Box 1 of the W2 income, the employer is considered to be compliant, and the Full Time employee will not be eligible for a tax subsidy.

If these requirements are not met, you will get a penalty for these Full Time employees that go to the Individual exchange and get a Subsidy (triggering the penalty).  The employee must be full time and it must be the employee that gets a subsidy in order for the employer to get charged with the penalty of $250/month/full time employee receiving subsidized coverage that their coverage is considered “unaffordable”.  The employer will not get penalized if it’s the dependent of the employee or the spouse that gets a subsidized plan, it must be the Full Time employee themselves that gets the subsidy in order for the employer to get the penalty.

The Penalty for “Offering” Employers is capped at whatever they would have had to pay if they were a “Not-Offering Employer”.  In other words, you cannot be charged more as a tax liability as an offering employer than you would if you were not an offering employer.  There are NO subsidies on the SHOP (Small Business Health Option Program Exchange).

NOTE:  There is NOT a 30 employee “reduction rule” for “Offering” employers (those employers that offer health insurance to their employees).  YOU ONLY PAY THE PENALTY FOR THOSE THAT ARE RECEIVING SUBSIDIZED COVERAGE, NOT ALL FULL TIME EMPLOYEES – BECA– USE YOU ARE AN “OFFERING” EMPLOYER.

ANOTHER NOTE:  Employers cannot make employees wait longer than 90 days for coverage to begin if the employer offers coverage.

LAST BUT NOT LEAST NOTE:  Large employers (50 or more Full Time Employees) need to be aware that starting in 2015, if you are providing group insurance to your employees and their dependents (required by law to cover dependents) the word dependent only means kids.  If you offer only to employee / dependent, the employee’s spouse IS able to get a subsidized plan, BUT the subsidy is based off of the “Household” income.  HOWEVER, if you DO OFFER coverage to the spouse and they elect not to take the coverage for whatever reason (usually because the spouse may feel your employer plan is too expensive), then that spouse is NOT able to get a subsidized plan!  Please keep this in mind.  You may repel employees if you are not careful.    

Call us here at the Nevada Insurance Enrollment Marketplace for options.  [/usa_item][usa_item acc_title=”Marketplace”]A Marketplace is a website where you can go and shop for different health insurance plans.  Different insurance companies and non-profit insurance companies will be selling their health plans in these “Marketplaces” (websites).  These Marketplaces are kind of like an online mall for insurance plans.  There are also Private Marketplaces (like this website here at the Nevada Insurance Enrollment Marketplace).  We are a full service “Private” marketplace.  We can assist you with both subsidized plans where the government helps pay for your premiums, and also un-subsidized plans (if you make too much money to qualify to get help in paying for your insurance).

The word Marketplace and Exchange kind of mean the same thing and they get used interchangeably.  A Marketplace works kind of like how Travelocity works when you are shopping for an airline ticket with all the different airlines.  Different health insurance companies (like Anthem BCBS, United (Golden Rule,) Sierra, Coventry, HPN, Aetna, Humana etc.) and many other types of coverage like Dental, Vision, Critical Illness, Medicare Supplements, Wellness, Property and Casualty, Life Insurance and much more can sell their health plans here at the Nevada Insurance Enrollment Marketplace.  We can also assist with subsidized plans from the Government.

Factors like your income and the number of family members on your tax return, all determine how much your premiums will cost if you are looking for a “subsidized plan.”  You will NOT qualify for a tax subsidy if you have employer insurance for yourself or your spouse or kids, or If you have a Federal insurance plan like the VA, Tricare, Medicare, etc., or if you get State assistance (Medicaid, etc.) 

Call us and we’ll help you determine if you qualify to get financial assistance (subsidy,) and help you make a decision on which plan is best for you.   [/usa_item][usa_item acc_title=”Maximums – Annual and Lifetime Maximums”]By 2014 all Individual and Family and Small Business Group Plans will be health care compliant and they will not have annual or lifetime maximums.  This applies to dollar limits and days in the hospital or days visiting your doctor also.  These unlimited benefits apply to the below benefits also called the “Essential Health Benefits”.

♦ Ambulatory patient services  (clinics, doctors office, same-day surgery centers, etc.)

♦ Emergency services

♦ Hospitalization

♦ Maternity and newborn care

♦ Mental health and substance use disorder services, including behavioral health treatment

♦ Prescription drugs

♦ Rehabilitative and habilitative services and devices

♦ Laboratory services

♦ Preventive and wellness services and chronic disease management

♦ Pediatric services, including dental and vision care (see below)

Dental for “Pediatrics” means anyone under the age of 19 must be offered a dental plan ON Exchange, and a built in dental plan OFF Exchange.

Vision for children under the age of 19 is covered, 1 visit per year, 1 pair of glasses per year are covered. The pediatric vision has to be covered on and off of the exchange.

Your insurance company must also allow members to request to have a drug covered that they need that the insurance company does not cover.[/usa_item][usa_item acc_title=” Medical Expenses / Deductions on your Taxes”]Starting 2013, a change to tax payers that allows a deduction of allowable medical expenses from your taxes has gone from 7.5% of your adjusted gross income to 10% of your adjusted gross income.  This means you must spend more of your income on medical bills in order to receive a tax deduction.[/usa_item][usa_item acc_title=”Medical Loss Ratio – Claims”]Starting in 2012, this law states that insurance companies MUST pay a minimum of 80%-85% of all the dollars they collect in premiums towards medical bills they receive (claims.)  In other words, if an insurance company collects $100 in a premium, $80 to $85 MUST pay a medical claim.  If at the end of the year they have collected too much from their members, they have to send their members back a “rebate” check, or give the members a credit for a future premium.  The insurance companies must pay 80% of all dollars collected for small businesses and families and individuals for medical claims.  The insurance companies must pay 85% of all dollars collected for large businesses medical claims.  Within the 80%-85% ratio’s, the insurance company can spend money on things that improve healthcare quality also.   If insurance companies worry that the health insurance market in Nevada will become unstable due to the strict MLR requirements, they can request the Department of HHS to make an adjustment to the MLR.  When you hear someone talk about their Premiums Going up, have them read this definition and explanation.

This medical loss ratio requires all insurance companies to send detailed reports to the Government about money being spent.  All States, all plans, the reports are a big responsibility and will be very time consuming for the insurance companies to comply with.  Self-insured plans do not have to comply with this requirement (this is a big deal) which means we’ll probably see more self-insured plans.  Grandfathered plans do have to comply. [/usa_item][usa_item acc_title=” Medical Records System – HIPAA”]As part of the Health Care Reform law, there was an addition to the HIPAA (Patient Protection) Regulation Act starting in 2013.  The new law requires streamlining (sharing) of all medical records between hospitals and doctors and health care providers.  For example, if you are admitted to a hospital in the future, all your past medical history would be available to the doctors at the hospital you are newly admitted to.  Medical professionals (doctors) will be able to access your baseline medical history and add to your medical chart all your new diagnosis and procedures into the same system.  This applies to all health care providers.  This new system will help to cut down on duplicate ordering of tests, and allow doctors to see results of prior tests.  It will assist in reducing overall medical costs and increase speed and accuracy of medical records.[/usa_item][usa_item acc_title=”Member Level Rating (Small Group)”]Modified Community Rating along with Member Level Rating may be the rating concept implemented in the Small Group Marketplace (SHOP).  Each employee would pay different rates based on age, tobacco use and location of each dependent being covered.  Also, each spouse and child being covered would be rated based on their age and tobacco use also.  This could be tricky for the employer to feel like they are being fair to all the employees.[/usa_item][usa_item acc_title=”Mini Medical Plans”]Are inexpensive low life time maximum plans.  These plans are not “Major Medical”.  There were some employers that were allowed to keep their employees on these plans without having to make some of the mandatory changes with health care reform if they got a waiver.  These waivers for employers to keep these “Mini Medical” plans will expire on 1/1/2014 when insurance can be purchased without any preexisting conditions, and subsidies become available to those whose income qualifies.  In 2014, all Americans with few exceptions will be required to have a “QHP” – qualified health plan.  An employee losing their mini medical plan may apply for a subsidized plan (based on their income and other factors) for an Effective Date of 1/1/2014.  Open enrollment for these subsidized plans begins 10/1/2013.  Subsidized means the premium will be reduced a percentage based on your income.  All of us MUST have a “qualified health plan” health insurance by 1/1/2014 or we’ll get a tax penalty when we file our taxes the following year with a few exceptions (see “Exempt, Exemptions, Not Subject to Buying Health Insurance” definition). 

If you don’t have a “QHP” – Qualified Health Plan now, or you are not covered by your employer, or if you don’t have a State or Federal insurance plan, or you had any kind of a change to your income or family, call us here at the Nevada Insurance Enrollment Marketplace and we’ll get you taken care of.[/usa_item][usa_item acc_title=”Minimum Essential Coverage”]This is a term that is used mainly for Large Employers to cover at least 60% of their employee’s medical costs if the employer offers coverage.  It is also a term that describes the Bronze plan on the Individual and SHOP Exchanges.  The Bronze plan covers at least 60% of all medical bills and is the lowest priced plan you can buy.  So the Bronze plan is the lowest tiered plan you can buy that meets the “Minimum Essential Coverage.”[/usa_item][usa_item acc_title=”Modified Adjusted Community Rating”]Starting in 2014, the only rating here in Nevada that health insurance companies can rate on now is age, tobacco use, and family size.  This is called a Modified Community Rating.  The law also limits the cost of health insurance on a percentage of the “household income”.  How much insurance can cost due to household income and these factors, individuals and families may qualify for subsidies.  There can only be a 3 to 1 ratio for more mature folks paying not higher than a 3 to 1 ratio compared to younger folks.  Rates cannot be based on one’s medical history, health, pre-existing conditions, height, weight, if they had previous coverage, claims history, genetic information, medications being taken or gender.  No health factors matter anymore that would prevent someone from getting a health plan.  Grandfathered plans and self-insured plans are exempt from this rating. [/usa_item][usa_item acc_title=” Multi-State Plans – Employees and College Students”]If you have a child in college out of state, or an employee working out of state, you may want to refer them to the Exchange in the state they are residing.  For college students, maybe look into a “Child Only” plan in the state in which they reside.  Nevada is working on a “Multi-State” plan, but we are waiting on more info on these “Multi-State” plans.  You can add them to your policy, however, you’ll need to understand the “network” of your insurance plan/company.   If you add your college student to your policy, what doctors will be “In Network” for them?[/usa_item][usa_item acc_title=”New Employees Waiting Periods on Group Plans”]On group insurance for new employees, starting in 2014, there cannot be more than 90 days before your health insurance becomes effective.  Your employer cannot have the waiting period start on the first of the month after 90 days.
[/usa_item][usa_item acc_title=”No more lifetime maximums”]Before healthcare reform, if your medical bills added up to be more than your lifetime maximum on your plan, you could be re-enrolled.  The new ACA from the time it passed in 2010 and beyond, no longer has lifetime maximum amounts the insurance company must pay.  In other words, your medical bills could be unlimited and it would be covered, minus your share.[/usa_item][usa_item acc_title=”Obamacare”]A nickname for the ACA – Affordable Care Act[/usa_item][usa_item acc_title=”Open Enrollment”]For families and individuals to have a January Effective Date with a subsidy, you must apply for a plan between October 15th and December 7th each year.  The 1st year of health care reform had an extended “Open Enrollment” of 6 months – October 1, 2013 – March 31st, 2014.  After open enrollment, the enrollment period will close for the remaining part of the year until enrollment opens back up each October 15th. 

The only way to make changes to your plan would be if a change in your family occurs for example, the birth of a baby (see “life event” definition.)  If you don’t qualify for a subsidy, you may buy insurance anytime you would like, however, there is a 90 day waiting period and the coverage will begin on the 1st day of the next month after the 90 day wait.  Also, the coverage can’t go back in time and you’ll be subject to a Tax Penalty for not having coverage.  It is not smart to wait until you are sick to try and get coverage because you won’t be able to. 

Small and Large businesses may buy health insurance at any time. 

Call us here at the Nevada Insurance Enrollment Marketplace to assist you with all your enrollment needs.
[/usa_item][usa_item acc_title=”Out of Pocket Maximum”]The maximum you have to pay in a year, not the insurance company.  In 2014 it is $6,350 for individuals and for a family it is $12,700.  For 2013 the limits are $6,250 for individuals and $12,700 for families.
[/usa_item][usa_item acc_title=”Out of State”]If a company’s main headquarters are here in Nevada, but has employees outside of Nevada, the State of Nevada in the SHOP exchange is required to allow those Full Time employees to enroll.  However, the employees would need to be aware that their services may be out of network, so it may be best if they could get insurance through the individual exchanges in the state in which they work.  Employers can look at “Multi-State” group plans.[/usa_item][usa_item acc_title=”Patient Centered Outcomes Research Institute”]This is a new Non-Profit Corporation instituted with the Affordable Care Act (Health Care Reform) who’s responsibility it is to conduct research to find out what medical procedures and medical tests are most effective.  This corporation is paid for by fees charged to “Specified Health Insurance Policies” and “Self Insured Health Plans.”[/usa_item][usa_item acc_title=”Patient Protections (there are 4 main items)”]With health care reform, there are new protections and benefits for Nevada’s Citizens on the new health plans. 

You can choose for yourself whomever you’d prefer to go to for your family doctor.  Just make sure the doctor is in the network of the plan you select.

♦ You can choose for your children whomever you’d prefer to take your children to as a family doctor, and this includes choosing a pediatrician.   Just make sure the doctor is in the network of the plan you select.

♦ You do not need a referral or a pre-authorization for Maternity or to see an OB-GYN for female members.

♦ With emergency room visits, you will now be charged the same for a hospital that is out of your network as you would for a hospital that is in your network, and you won’t need pre-authorization.  This is for true emergency situations only.

Additional Patient Protections with health care reform.

♦ Coverage for Pre-Existing Conditions

♦ Your policy can’t be unfairly canceled

♦ Up until your child’s 26th birthday, they may remain on your plan no matter if they are married, live at home, are on your taxes, or are a student.  The only exception is if you have a grandfathered plan and your child is offered insurance from their job until 1/1/2014, they must accept that insurance instead of the parents.   Then after that date it doesn’t matter if your child has a job from their employer or not.

♦ You may appeal a health insurance decision.  If you feel your insurance should pay for a medical bill and the insurance refuses to pay, you can appeal the decision (see Appeal definition) and the insurance company will be required to review the decision.  If you still are not satisfied, you have the right to have an outside independent agency review the appeal.

♦ Your policy may not deny participation in an approved clinical trial, deny routine patient costs in connection with the clinical trial, or discriminate against the individual participating in the trial.

♦ Free preventative care – from the Health and Human Services Website, here are some examples of what is covered, without co-pays, co-insurance, or deductibles.  Make sure the doctor’s office bills you correctly for “Preventative” services.  If you see the doctor for preventative services only, you should not see a bill.  We suggest that if you go to see the doctor for preventative services, do not talk about or have any other services performed.  This way, your FREE preventative service will remain free and you should not see a bill.  Be careful to stay within your network for preventative care.  Those preventative services rated an A or B rating from the Department of Health and Human Services Website:

◊ Children (0-17): Coverage includes regular pediatrician visits, vision and hearing screening, developmental assessments, immunizations, and screening and counseling to address obesity and help children maintain a healthy weight.

◊ Women (18-64): Coverage includes cancer screening such as pap smears for those ages 21 to 64, mammograms for those ages 50 to 64, and colonoscopy for those ages 50 to 64; recommended immunizations such as HPV vaccination for those ages 19 to 26, flu shots for all adults, and meningococcal and pneumococcal vaccinations for high-risk adults; healthy diet counseling and obesity screening; cholesterol and blood pressure screening; screening for sexually-transmitted infections and HIV; depression screening; and tobacco-use counseling.  For plan years (in the individual market, policy years) beginning on or after August 1, 2012, additional preventive services specific to women, such as well-woman visits, screening for gestational diabetes, domestic violence screening and counseling, and prescription, FDA-approved contraception, must be covered with no cost sharing.

◊ Men (18-64): Coverage includes recommended immunizations such as flu shots for all adults and meningococcal and pneumococcal vaccinations for high-risk adults; cancer screening including colonoscopy for adults 50 to 64; healthy diet counseling and obesity screening; cholesterol and blood pressure screening; screening for HIV; depression screening; and tobacco-use counseling.

PLEASE NOTE – If your doctor bills 2 separate bills for your visit, you will be billed for the portion of the office visit that was not preventative.  For example, if you see a doctor for a routine physical, and in the same visit you need your prescription refilled, IF the doctor bills 2 separate bills for that visit, the physical will be free, but the prescription refill portion of that visit will be charged.  IF the doctor bills everything on one bill, you will not be charged.  Make sure the doctor’s office bills you correctly for “Preventative” services.  If you see the doctor for preventative services only, you should not see a bill.  We suggest that if you go to see the doctor for preventative services, do not talk about or have any other services performed.  This way, your FREE preventative service will remain free and you should not see a bill.

Be careful to stay within your network for preventative care.[/usa_item][usa_item acc_title=”Penalty For Not Buying Health Insurance”]In order to avoid a tax penalty, you MUST buy a plan that covers the “Essential Health Benefits” (see bullet points below) or you must have a group health plan that covers the “Minimum Essential Coverage” (60% AV – actuarial value) or have a grandfathered plan, or a “self-funded” plan, or a Federal or State Government plan. 

Insurance companies began selling these new health insurance plans 10/1/2013.

If you get a penalty, a tax refund you may get or could have gotten will be reduced by the amount of your penalty.  You won’t go to jail.

Penalty for 2014:  1% of your income OR $95/adult, $47.50/kid or $285 max – whichever is greater

Penalty for 2015:  2% of your income OR $325/adult, $162.50/kid or $975 max – whichever is greater

Penalty for 2016:  2.5% of your income OR $695/adult, $347.50/kid or $2085 max – whichever is greater

The Essential Health Benefits (does not apply to large employers) that your plan must cover to be the correct kind of insurance to have to avoid the penalty covers all these benefits at a minimum without lifetime or annual limits:

♦ Ambulatory patient services  (clinics, doctors office, same-day surgery centers, etc.)

♦ Emergency services

♦ Hospitalization

♦ Maternity and newborn care

♦ Mental health and substance use disorder services, including behavioral health treatment

♦ Prescription drugs

♦ Rehabilitative and habilitative services and devices

♦ Laboratory services

♦ Preventive and wellness services and chronic disease management

♦ Pediatric services, including dental and vision care (see below)

Dental for “Pediatrics” means anyone under the age of 19 must be offered a dental plan ON Exchange, and a built in dental plan OFF Exchange.

Vision for children under the age of 19 is covered, 1 visit per year, 1 pair of glasses per year are covered. The pediatric vision has to be covered on and off of the exchange.

Your insurance company must also allow members to request to have a drug covered that they need that the insurance company does not cover.[/usa_item][usa_item acc_title=”PCIP (Pre-Existing Condition Insurance Program)”]This program was set up in 2010 when Health Care Reform was first passed to assist those folks that were turned down after applying for a health insurance plan and they hadn’t had health insurance for at least 6 months.  They could apply for this program to get a major medical plan until 1/1/2014 when pre-existing conditions are no longer a factor.  These members of the PCIP program can then receive a health plan guaranteed and not be turned down.[/usa_item][usa_item acc_title=”Platinum, Gold, Silver, Bronze”]From 1/1/2014 on, all individual and family health insurance plans will have these “Metallic” names whether they buy health insurance “On Exchange” or “Off Exchange” or on the “SHOP Exchange” (see definitions.)

The Platinum plan covers 90% of your medical bills, up until the “out of pocket maximum.”

Gold covers 80% of your medical bills, up until the “out of pocket maximum.”

Silver covers 70% of your medical bills, up until the “out of pocket maximum.”

Bronze covers 60% of your medical bills, up until the “out of pocket maximum.”

The Out of Pocket maximums for 2014 for individuals is: $6350 –  For families is: $12,700

Don’t worry that your percentage goes on forever, there is always an “Out of Pocket Maximum” so you’ll only pay your portion of the expenses until you’ve paid your out of pocket maximum.

Example of how this works.  You break your leg, it costs a total of $10,000 to fix your leg.  If you had the Silver plan, you’d pay 30% of $10,000 which would be $3,000, and your insurance would pay the rest.  If your FPL (federal poverty level) is less than 250%, you’ll pay less than the $3,000.

Another more dramatic example.  You have a massive heart attack and the medical bill is $1,000,000.  If you had the Gold plan, you’d pay  20% up until you’ve paid your “out of pocket maximum” which would be $6,350 for a single individual in 2014.  The insurance company pays the rest of the medical bill.

There is a “Catastrophic” plan for adults under 30 years old.  See definition.[/usa_item][usa_item acc_title=”Play or Pay Tax – Employers “Safe harbor””]A “safe harbor” for employers to avoid tax penalties would be to make certain that the lowest “employee only” offered health insurance plan costs less than 9.66% of the employee’s wages for their portion of the health insurance costs reported on the employees [W2 Box 1] wages.  The plan offered must also cover the Minimum Value of 60% actuarial value (cover at least 60% of medical costs) with an out of pocket maximum for the employee that coincides with the limit for that plan year. 

Employers:  Keep in mind that starting in 2015, if you DO offer only to your employee and or dependents (children are mandatory), the employee’s spouse is able to get a subsidized plan in Nevada, but the subsidy is based off of the “household” income.  HOWEVER, if you DO OFFER coverage to the spouse (dependent is mandatory in 2015) and they elect not to take the coverage for whatever reason (usually because the spouse may feel your employer plan is too expensive), then that spouse is NOT able to get a subsidized plan.  Please keep this in mind.  You may repel employees if you are not careful.
[/usa_item][usa_item acc_title=”Play or Pay Tax Penalty “Employer Mandate””]Starting 1/1/2015, also known as the Shared Responsibility for Employers, Large Employers that employ 50 or more Full Time “Equivalent” Employees as of 1/1/2015, MUST offer health insurance to at least 95% of their full time employees and dependents (children).  If not, employers will face a penalty of $166.67/month/full time employee (minus the first 30 Full Time Employees [not equivalent] employees IF the tax is triggered). 

Also, the coverage has to meet “Minimum Essential Coverage”.  This means it must cover at least 60% of the medical costs up to the out of pocket maximum.  If you provide a health plan that DOES NOT cover at least 60% of the AV (Actuarial Value), then you will be subject to the Tax Penalty if you have 50 or more full time equivalent employees and the tax is “triggered”.

This calculation should be done on a monthly basis for the preceding calendar year.  For example, if a large employer has 40 Full Time employees (employees that work >30 hours/week-see “full time” definition) and 32 Part Time employees (who’s average hours worked each week equal 20 hours weekly), he would have 61.3 Full Time Equivalent Employees.  (See calculations below)  This Employer WOULD be subject to the Play or Pay tax IF the tax gets triggered. 

If the employer chooses not to offer health insurance, he/she would have to pay $166.67/full time employee each month they are not in compliance for 10 employees (40 FT Employees minus the first 30 full time [not equivalent] employees).  In figuring the penalty, you do not count Equivalent Employees, only the Full Time employees.  This penalty would then cost $166.67/month x 10 = $1,666.70.  So in this example the penalty per month is $1,666.70 or $20,000.40/year.  This penalty would be calculated each month the employer is NOT in compliance. 

NOTE:  The penalty is ONLY calculated for Full Time employees, not Part Time Employees.  You will only pay the tax penalty for the months the full time employee received a subsidy.  THIS PENALTY IS NOT TAX DEDUCTIBLE

NOTE:  The tax is triggered by ANY of the Full Time employees going to the Individual Exchange and getting a subsidy.  If 1 (one) Full Time employee (not the spouse or dependents, or part time employees) gets a subsidy on the exchange, this triggers the penalty for the employer.

To calculate your Full Time Employees (see definition).

To calculate your “Full Time Equivalent Employees” follow these instructions:

1). Count the FT employees (work >30 hours/week) – In the above example we have 40.  (see definition for full time employee.)

2). Exclude all of your:  Full Time employees, seasonal workers that work less than 120 days in a calendar year, leased employees (temps), self-employed (owners) or any owner that owns 2% or more of an S-Corp, or 5% of a Corporation.  Certain family members such as: Children, Siblings, Step-siblings, Parents, Step-parents, Nieces, Nephews,  Aunts, Uncles, Sons-in law, Daughters-in-law, Fathers-in-law, Brothers-in-law, Mothers-in-law, Sisters-in-law, Dependents, Ancestry, and any member of the household of an owner or partner who qualifies as a dependent.  Also exclude employees in the waiting period before their benefits begin.

3). Who’s left?  Your Part Time employees + seasonal employees (that worked over 120 days/year).  Add up ALL OF THEIR HOURS together, then divide by 120.  This gives you your “Equivalent” employees.

4). In the above example we have 32 part time + seasonal employees, they work 20 hours/week.  32X20 = 640 hours each week X 4 weeks in a month = 2560 hours worked by all part time + seasonal employees in the month.  Now DIVIDE 2560 by 120 = 21.3 “Equivalent” Employees.  You always drop the remainder, so this gives you 21 “Equivalent” Employees.  Add this number to your full time employees.   In this example, we have 61 Full Time Equivalent Employees, so this example the employer would be subject to the tax.  TAX PENALTIES ARE NOT TAX DEDUCTIBLE.

Aggregation rules (see definition) DO apply.  Be very careful here.  Splitting up your businesses into different entities will not relieve a business owner from becoming subject to the Pay or Play tax.  If any “Common Control” aspect of 1 or multiple businesses is owned by 1 person or any member of his family or extended family or business partners (common owner/common interests) the number of employees will “Aggregate”.  It DOES NOT MATTER if the different businesses are separate in any way; TIN, etc.  The only thing that matters is what the relationship is, defined in the Aggregation Rules – all employees will get added together.  The aggregation rule is very complex and speaking with an Attorney and/or Accountant that specializes in the Affordable Care Act Aggregation Rules is highly recommended.

NOTE:  Seasonal Employees – if one (1) single seasonal employee that works over 120 days per year that is added to the Full Time equations and IF the seasonal workers put the employer above the 50 FTE threshold, then they are NOT to be subject to the tax.

NOTE:  Starting 2015 Large Employers need to be aware that if you are providing insurance to your employees and their dependents (required by law to cover dependents – the word dependent only means kids) and if you offer only to employee/dependent, the employee’s spouse is able to get a subsidized plan…BUT the subsidy is based off of the “Household” income.  HOWEVER, if you DO OFFER coverage to the spouse and they elect not to take the coverage for whatever reason (the spouse may feel your employer plan is too expensive), then that spouse is NOT able to go and get a subsidized plan!  Please keep this in mind.  You may repel employees if you are not careful.

We recommend you calculate this “Play or Pay” tax monthly, and you will only pay a tax penalty for the months your full time employee(s) received a subsidy.[/usa_item][usa_item acc_title=”Pre-Existing Conditions”]After 1/1/2014 you can no longer be turned down for having pre-existing conditions.  There will not be annual or lifetime limits on the 10 “Essential Health Benefits.” (See definition)  It no longer matters what medications you are on, your height or weight, how old you are, how young you are, your gender, what pre-existing conditions you have, if you become pregnant or not, if you’ve had a ton of medical bills in the past, your genetic information, if you have a disability.  Nothing matters.  You qualify.  You cannot be turned down for health issues.  Insurance can no longer discriminate based on pre-existing conditions.  Factors affecting your health will no longer cause your premium to go up in price either. 

Smoking, however, will make your premium go up.[/usa_item][usa_item acc_title=”Principle Place of Business”]This is not the headquarters of the company where you’d set up your Small Group Insurance (SHOP) health insurance plan, but where the majority of your upper management of the company resides and where the company’s records are kept.  This is the state where you’d want to get your health insurance plans from.  Before setting up your Small Business Group Insurance plan, if you have out of state branches of your company, you’ll want to speak with someone that understands the ACA law.[/usa_item][usa_item acc_title=”Prohibit Retroactive Rescission”]The insurance companies cannot go back to a past date and cancel your health plan now because of simple “clerical” errors.  They still can “Rescind” (take away/cancel) your health insurance plan if you lie on your application or if you forget to make your payments.  If you smoke, you must be truthful about smoking.  Just make sure you are truthful on all your documentation.  The insurance company can also retroactively rescind for “normal course of business.” – This is where the employer has a chance to get caught up with their documentation with the status of their employees that are not paying premiums anymore due to loss of income or loss of job or whatever the circumstances are, or if you don’t tell your health plan that you got divorced.[/usa_item][usa_item acc_title=”Qualified Health Plans (QHP’S) – Health Care Reform Compliant”]All the major medical plans that will be sold from 1/1/2014 and on that sell on the individual “Exchange” and the “SHOP Exchange” must comply with all the rules and regulations in order to be a “Qualified Health Plan”.  All health insurance plans for families and individuals MUST cover these 10 items called “Essential Health Benefits.” These 10 benefits must be covered without any lifetime or annual limits on the “Essential Health Benefits.”

From 1/1/2014 and beyond, all new health plans (insured small group and individual health insurance plans) must cover the 10 bulleted benefits below.  These are the plans you’ll want to have in order to avoid a tax penalty.  These “Essential Health Benefits” will be covered.  There are exceptions to those that have to buy these plans.  Those folks that have a State or Federal plan (Medicare, Medicaid, VA, Tricare, CHIP etc.) or are part of an Employer Group that provides benefits, or are “Grandfathered,” or if the insurance is “unaffordable” (see definition) then you won’t need to buy.  All the rest of us, unless we are “Exempt” (see definition) our health insurance plan must cover these benefits to be the correct kind of insurance to avoid paying the tax penalty, or until our insurance company tells us our current policy we have now (only if it’s a major medical policy) renews and we must buy a “Qualified Health Plan” that has the following benefits:

♦ Ambulatory patient services  (clinics, doctors office, same-day surgery centers, etc.)

♦ Emergency services

♦ Hospitalization

♦ Maternity and newborn care

♦ Mental health and substance use disorder services, including behavioral health treatment

♦ Prescription drugs

♦ Rehabilitative and habilitative services and devices

♦ Laboratory services

♦ Preventive and wellness services and chronic disease management

♦ Pediatric services, including dental and vision care (see below)

Dental for “Pediatrics” means anyone under the age of 19 must be offered a dental plan ON Exchange, and a built in dental plan OFF Exchange.

Vision for children under the age of 19 is covered, 1 visit per year, 1 pair of glasses per year are covered. The pediatric vision has to be covered on and off of the exchange.

Your insurance company must also allow members to request to have a drug covered that they need that the insurance company does not cover.

**This list does not apply to large employers in 2015 or Self-Funded Insurance plans.  Starting in 2015 Large employers (see definition) have to have plans that are “affordable” (employee’s portion is not more than 9.66% of the employees Box 1 income) and cover at least 60% of the medical costs, and cover their dependents (kids.)

The Nevada Insurance Enrollment Marketplace can assist with any of these plans.
[/usa_item][usa_item acc_title=”Quality of Care Reporting”]Starting 2012, one of the goals to improve patient outcomes can be accomplished through “Quality of Care Reporting.”  The Department of HHS is instructing health insurance companies that they must report back to The Department of Health and Human Services (HHS) once a year on how benefits are being delivered to their customers and how they pay their doctors and providers in their networks.  The Department of HHS wants to accomplish results in improving patient outcomes through case management and health care coordination, with chronic disease management and maintenance, through “medical homes” that will treat and serve members, including medical care and prescription care.

Quality of Care Reporting emphasizes chronic disease management for medical conditions like diabetes, also by reducing hospital readmissions after being discharged from a hospital or facility, reducing medical errors, and improving patient safety with new computer electronic software and technology for record keeping.  These methods have been successful in the past for improved patient outcomes.  Health and wellness programs will become a big deal in the near future.  Large employer’s plans must submit reports on “Quality of Care” along with the insurance companies.  Other functions that are meant to improve the Quality of Care for patients will be “W2 reporting,” MLR (Medical Loss Ratio) and “Transparency in Coverage Reporting” (see definitions.)   [/usa_item][usa_item acc_title=”Reducing Hours of Full Time to Part Time Employees to avoid paying a Tax Penalty”]Reducing employees’ hours may be considered by the government to be in violation of the ERISA laws for reducing employees’ hours for the sole purpose of avoiding a tax penalty.  Employees could potentially file a case against the employer if the employer reduces hours for “no legitimate reason” other than to avoid paying at tax penalty that eliminates the employees from receiving a benefit like health insurance.  This may cause employees to sue their employers if their employers reduced their hours. 

If the DOL or IRS finds that avoiding paying a tax penalty is a “legitimate business reason” the employers could be fine.  We may have to wait and see how this plays out in the courts.

[/usa_item][usa_item acc_title=”Self-Insured or Self-Funded Plans”]These plans are not subject to the SHOP exchange (government small business exchange) deductibles, but ARE subject to the “out of pocket maximum.”  They are NOT subject to MLR (Medical Loss Ratio) nor do they need to cover the “Essential Health Benefits”.  IF the self-insured plan is grandfathered, all the restrictive rules do apply, otherwise it will lose its grandfathered status.  How a self-funded plan works is an employer generally agrees to cover all medical bills from their employees up to a certain level called the aggregate attachment point.  Employees still pay premiums and deductibles, but the employer covers medical claims up to an expected amount every coverage year.  Many employers will add stop loss coverage beyond the aggregate attachment point.
[/usa_item][usa_item acc_title=”SHOP (Small Business Health Options Exchange)”]This is a website where Small Business Owners that have 1-50 employees that want to provide “Group Insurance” can shop for health insurance for their full time employees.  Small business owners that have less than 50 Full Time Equivalent Employees are not required by law to provide insurance to their employees.  If the employer chooses to provide group insurance, the employer must cover 75% of all the Full Time employees.  All the plans on the SHOP must cover the “Essential Health Benefits” (see below) that are “Qualified Health Plans” (see definition)  If the employer cannot enroll 75 percent of the eligible full time employees, they will need to increase the amount they contribute toward the employees’ coverage.  There are exceptions to this 75% rule.  Employers are required to provide a minimum of 50% of the premium for the employee for the lowest tier plan offered that is “affordable” (see definition).

Keep in mind there are NO subsidy’s on the SHOP exchange like there are on the Individual Exchange.  There are, however, maximum deductibles for individual employees of $2,000 and for families $4,000 on the SHOP Exchange.  There are also calculators on the SHOP exchange to do the math for the enrollee to compare employer provided health insurance to health plans that are on the “Individual Exchange” that have the subsidies called “Advanced Premium Tax Credits”.  Employers will have a variety of plans to choose from, Platinum, Gold, Silver, or Bronze.  Small employers may qualify for the Small Business Tax Credit (see definition).

Employers must select a plan at least 60 days before their requested effective date, and employees have 30 days to select a plan in which the employer is offering in order to complete the application process.  These are the full time employees only.  Part time employees are not allowed to purchase insurance on the “SHOP” Exchange.  Full Time is 30 hours per week.  The employer’s enrollment and 1st payment must be provided at least 15 days before the effective date.

The health insurance plans MUST cover these 10 items without any lifetime or annual limits on the “Essential Health Benefits”.

♦ Ambulatory patient services  (clinics, doctors office, same-day surgery centers, etc.)

♦ Emergency services

♦ Hospitalization

♦ Maternity and newborn care

♦ Mental health and substance use disorder services, including behavioral health treatment

♦ Prescription drugs (see below)

♦ Rehabilitative and habilitative services and devices

♦ Laboratory services

♦ Preventive and wellness services and chronic disease management

♦ Pediatric services, including dental and vision care (see below)

SHOP enrollment is available throughout the year.

NOTE:  If an employer covers his or her employees in the SHOP exchange, and the number of employees grows to over 50 employees, the employer may continue to cover his or her employees as long as the employer is not disqualified for any other reason.

Dental for “Pediatrics” means anyone under the age of 19 must be offered a dental plan ON Exchange, and a built in dental plan OFF Exchange.

Vision for children under the age of 19 is covered, 1 visit per year, 1 pair of glasses per year are covered. The pediatric vision has to be covered on and off of the exchange.

Your insurance company must also allow members to request to have a drug covered that they need that the insurance company does not cover.[/usa_item][usa_item acc_title=”SHOP Insurance Options for 2014″]SHOP Insurance Options:

1).  Anthem

2).  Nevada CO-OP

 Standalone Dental Plan Issuers:

1).  Delta Dental

2).  Guardian Life Insurance Company[/usa_item][usa_item acc_title=”Simple Cafeteria Plans”]A Simple Cafeteria Plan allows employees a buffet of benefits to choose from in which they want to enroll into.  These simple cafeteria plans became available 1/1/2011.  What rules make employers “Eligible?”  The employer must only have employed 100 or fewer employees in at least 1 of the past 2 years.  All employees must be treated the same.  Employees get to choose which benefits they want.  The employer has to be an “eligible employer”, must contribute to the plan, and must meet participation requirements.  Aggregation and predecessor (common ownership of separate businesses – see definition) rules apply.  All employees with at least 1,000 hours of service during the preceding year must be eligible to participate (see Excluded and Excludable employees below).  The plan must have required uniform employer contributions (see below).  A simple cafeteria plan is a great option until the year after the employer employs over 200 employers.  Once the employer hits over 200 employees, the year after the year the employer hits 200 employees, they can no longer offer a Simple Cafeteria Plan.

For new employers:  If this is the 1st year the employer is in business, you can start a cafeteria plan if you “reasonably” expect to hire 100 or less employees.  Base your calculations each month on that number. 

For growing employers:  These employers were “eligible” meaning, the employer met the rules of eligibility (see eligibility above) to begin a Simple Cafeteria Plan.  They may grow above 100 employees, but cannot have over 200 employees.  The year AFTER the employer exceeds 200 employees, they are disqualified from offering a simple cafeteria plan.

Very Important!   Aggregation rules do apply (see definition.)

Contributions:  All eligible employees that have worked 1,000 hours in the preceding calendar year qualify and must be eligible to participate (unless they are excluded or excludable or – see below).  They must receive a uniform percentage of “non-elective” or “matching contribution” employer contributions of at least 2% of the employee’s income OR whichever is less of:  6% of the employee’s salary or double the employee’s salary reductions.   Whichever option is chosen the contribution amounts must be equal for all eligible employees participating in the plan.

Excluded employees for the simple cafeteria plan are:  2% or greater shareholders of Sub-Chapter S Corps, Sole Proprietors, Partners in a partnership, Self-Employed.  Excludable are employees that the employer can choose to exclude: this could be employees under 21 years old, employees that have worked less than 1 year, or employees belonging to a union, and non-resident aliens.
[/usa_item][usa_item acc_title=”Small Business Grants For “Wellness” programs”]An employer may be eligible if they have less than 100 employees, that work more than 25 hours per week, and if the employer didn’t have a wellness program before the law was passed on March 23, 2010, but has since started a wellness program.   Funds are tied up for now, there aren’t any grant monies available at this time.  The wellness program has to have health strategies for good health choices and awareness, to engage employees, to motivate change from unhealthy lifestyle habits, and have supportive help for the employees.   There are 2 kinds of Wellness Programs.

1). Standard Based

2). Participation Only.  Participation only wellness programs means the participants only needs to attend meetings.  The Standard Based Wellness Programs requires participants to meet specific goals.  Like quit smoking, lose weight, etc.   There will be an official application process to be granted these monies.    [/usa_item][usa_item acc_title=”Small Business Tax Credit”]YOU CAN DO THIS!  We’ve made it easy to understand how to calculate this, at least to see if you are in the ball park of qualifying for a tax credit.

Starting in 2010, a tax credit (different than a tax deduction) could be given to a small business employer who purchased or has/had group health insurance for their employees that met certain guidelines. 

These guidelines are that the business cannot have over 25 full time “equivalents employees” (see below) and that the average income for the employees did not or cannot exceed $50,000.  Also, the employer must be contributing towards the premium (meets IRS code for contribution, usually a minimum uniform percentage of at least 50% of the premium for the employee).  If the employer is NOT contributing the minimum per the IRS code Sec. 45R(d)(4) you will not qualify for a tax credit. 

The employer could get up to a 35% Tax Credit, and Tax Exempt 501C Employers can get up to 25% Tax Credit years 2010-2013.  These percentages increase in 2014 to 50% max credit for small employers and 35% for tax exempt employers.  In 2014, however, the employers MUST buy through the SHOP Exchange in order to qualify for the Tax Credit.

The maximum credit for the small business is if the average wage is $25,000 per year per employee or less, and has 10 full time equivalent employees or less.  As wages and number of employees grows, the tax credit decreases, until the average annual wage of $50,000 per employee and has 25 or more full time equivalents is reached.  Beyond this point, there is no more tax credit eligibility.

To figure out if a small business owner qualifies for the Small Business Tax Credit.

Determine who’s hours are counted.  The 1st PHASE – Step 1 is to see if you qualify for a tax credit.  You must first calculate the number of Full Time Employees AND Full Time Equivalents to see if you have 25 or fewer full time equivalents employees to qualify for the Tax Credit.  Who is included and who is not included (excluded?)

Figure out first who your excluded employees are.  All of the following in this paragraph are to be excluded from the equation.  This would be seasonal workers that work less than 120 days in a calendar year, self-employed (owners) of any company that owns 2% or more of an S-Corp, or 5% of a Corporation, Sole Proprietors, Partners in Partnerships.  Certain family members such as: Children, Siblings, Step-siblings, Parents, Step-parents, Nieces, Nephews,  Aunts, Uncles, Sons-in law, Daughters-in-law, Fathers-in-law, Brothers-in-law, Mothers-in-law, Sisters-in-law, Dependents, Ancestry, and any member of the household of an owner or partner who qualifies as a dependent.

The 2nd step is to aggregate (add up everyone’s hours) that is not excluded.  The most effective method of calculating this is called “Actual Hours of Service”.   So you’ll add all full time employees (max you can count is 2080 hours in a year no matter how much overtime they may have worked) and your part time employees (hours they work in a calendar year) and Seasonal workers are counted IF they worked over 120 days in the taxable year.  Add this big number of total hours worked up together and then divide by 2,080.  If you do not have hours tracked, see below under [Alternate methods of calculating hours of service].

For example:

Suppose you have 6 Full Time Employees who work 40 hours a week, 52 weeks a year – 6x40x52=12,480 hours

Suppose you have 16 Part Time Employees that work 15 hours a week, 26 weeks per year – 16x15x26=6,240 hours

So add your FT + your PT – 12,480+6,240 = 18,720 (grand total hours worked).  Now Divide this number by 2,080

18,720 / 2080 = 9 Full Time Equivalent Employees.  Congratulations, you can move on to the next step.

IF THIS NUMBER IS GREATER THAN 25 YOU DO NOT QUALIFY FOR A TAX CREDIT.  IF IT IS 25 OR LESS MOVE ON TO THE NEXT STEP.  CALCULATE AVERAGE ANNUAL WAGES.

Alternate methods of calculating hours of service

2nd Method of calculating hours worked if your business has not kept records of hours worked would be to add days worked.  This is called:  “Days-worked Equivalency”.  Each day worked will be counted as 8 hours regardless of how long they actually worked.  This method is not as effective as hours worked.

The 3rd method of calculating hours worked would be weeks worked.   This is called:  “Weeks-worked Equivalency”.  If your employees worked 1 hour in the week, you must count 40 hours worked for that week.  Not nearly as effective as hours or days worked.

NOW 2nd PHASE OF THE PROCESS

AGGREGATE (ADD UP TOGETHER) ANNUAL WAGES – 2nd PHASE STEP 1

Now you’ll need to calculate Average Annual Wages for the same group of employees.  You’ll take the annual wage of all your eligible employees (the non-business owners/relatives) and add all those wages up to one large number.  Now divide that large number by the number of Full Time Employees/Equivalents you had from the 1st Step.  This is how you do it:

For example: 6 Full Time Employees – Each make $34,000 per year.  6X$34,000 = $204,000

16 Part Time Employees make $15/hour, work 15 hours/week x 26 weeks.  16x$15x15x26 = $93,600

Add full time and part time salaries together – $204,000 + $93,600 = $297,600

Now take the total wages and divide by Full Time Equivalents $297,600 / 9 (FT equivalents) = $33,066

“Average Annual Wage” per Full Time Equivalents in this scenario is $33,066.  In this practice scenario, this employer WOULD qualify for a partial tax credit.  Congrats!   If this number were greater than $50,000, you would NOT qualify for a tax credit.

Calculating the Credit Amount for the Small Business

http://www.smallbusinessmajority.org/tax-credit-calculator/

***The Tax Credit acts to offset the employers’ actual tax liability.

Please note – the Small Business Tax Credit beginning in 2014 is only available if you purchase plans through the SHOP Exchange.  Prior to year 2014 it did not matter where you purchased the plans, you could still qualify for the tax credit IF you met the guidelines.

This calculation is done 1 time each year.  To claim the credit you’ll fill out Form 8941 and Tax Exempt form 990-T. 

Disclaimer: We HIGHLY recommend you consult your accountant, this method of calculating your small business tax credit is a convenience to you, but is not to be a substitute for an accountant verifying the information to be correct. 

NOTICE:  Aggregation rules apply.  If any “Common Control” aspect of 1 or multiple businesses is owned by 1 person or any member of his family or extended family or business partners (common owner/common interests) the number of employees will “Aggregate”.  It DOES NOT MATTER if the different businesses are separate in any way; TIN, etc.  The only thing that matters is what the relationship is, defined in the Aggregation Rules – all employees will get added together.  The aggregation rule is very complex and speaking with an Attorney and/or Accountant that specializes in the Affordable Care Act is recommended.

NOTE:  Small Employers need to be aware that if you are providing insurance to your employees and NOT their dependents or spouses, the employee’s spouse and dependents ARE able to get a subsidized plan on the “Exchange”, but the subsidy is based off of the “Household” income.  HOWEVER, if you DO OFFER coverage to the spouse and their dependents, and they elect not to take the coverage (most of the time it’s because it’s too expensive), then that spouse and dependents are NOT able to get a subsidized plan!  Please keep this in mind.  You may repel employees if you are not careful.[/usa_item][usa_item acc_title=”Small Employers”]A “Small Employer” is defined as an employer that employs 1-50 employees in the preceding year and at least 1 employee on the 1st day of the insurance plan year.  You are NOT required to provide insurance to employees or their dependents or spouses.  You are only required to buy insurance for 50 or more full time equivalent employees.  IF you do, however, offer coverage to just your employees and NOT to their spouses and dependents, the spouses and dependents in Nevada ARE able to get a subsidized plan, BUT the subsidies are based off of the “Household” income.  If the small employer DOES offer coverage to spouses and dependents, those spouses and dependents cannot receive a tax subsidy.  If you offer insurance to them and they feel like the spouse and dependent coverage is too expensive, now they are NOT ELIGIBLE for a tax subsidy.  By law, they are still required to have coverage or face a tax penalty. 

If you do offer benefits to the employee that is “affordable” (see affordable definition below) is their portion of the premium that you are offering going to cost them more than a plan that is subsidized?  If so, you may be repelling employees.

Affordable: The definition of affordable is not up to the discretion of any individual but to the following calculations from the government:  If the employee’s portion of the health insurance the employer provides costs more than 9.66% of the employee’s W2 Box 1 income, and it doesn’t cover at least 60% (Minimum Value) of the medical expenses, this is considered to be “unaffordable”.  If the insurance is unaffordable, the employee IS eligible for a Subsidy.  If the insurance provided from the Small Business Employer is affordable, then the employee is NOT eligible for a tax subsidy.[/usa_item][usa_item acc_title=”Subsidy (Advanced Premium Tax Credit)”]A subsidy is an “Advanced Premium Tax Credit” that is available on the Individual Exchange but NOT the SHOP Exchange for small businesses.  A “subsidy” means that you get a reduced premium payment to pay for your medical insurance.  The factors that affect the premium you pay (the subsidy you receive), would be your income and the number of family members on your tax return.

The only way to get a “Subsidy” is to get a health insurance plan through the Governments “Exchange” and only if your income is between 138% to 400% of the federal poverty level.  Nevada Insurance Enrollment can help you with a “subsidized” or “unsubsidized” health plan, we are a Full Service Private Marketplace.

Your income will be checked with the IRS records or a Federal Database, so if you claim a certain income, the “Exchange” will check with the IRS of your past years’ income tax records – before you get approved for a subsidy.

Individuals and families will state their income based on their MAGI or Modified Adjusted Gross Income (see definition).  That information will then be verified through the IRS against your previous tax returns.  If the stated income on the application is more than 10% lower than what the IRS shows, the State will require the individual to prove their income within 90 days, but you’ll still get enrolled.  Your financial information is run through a Data Services Hub (a tool the government is using to verify applicant information and income for the “Advanced Premium Tax Credits”) to see if you qualify for a subsidy.

BE CAREFUL HERE!!!  You do not want to understate your income or you could end up owing money to the IRS.  For example, if your premiums are $1,000/month and you get an Advanced Premium Tax Credit of $800/month and you only have to pay $200/month.  When you do your taxes and file your tax return each year, the Government will check your income.  IF you were only supposed to have received an Advanced Tax Credit of $700/month instead of $800/month, you’ll owe the IRS an extra $100/month X 12 months equals $1,200.

How do you avoid this?  Read the “Redetermination for Income Changes” and the “Reconciliation of Premium Credits” definition(s).

The Advanced Premium Tax Credit is an “estimation” of your pre-tax credit, so if you’ve received too much “credit,” you’ll end up paying it back.

Please note:  If you are providing health insurance to your employees, and only to your employee, in Nevada the employee’s spouse and children are able to get a subsidized plan.  But the subsidy is based off of the “household” income.  HOWEVER, if you DO OFFER coverage to the spouse and dependents and they elect not to take the coverage for whatever reason (the spouse may feel your employer plan is too expensive), then that spouse is NOT able to get a subsidized plan!  Please keep this in mind.  You may repel employees if you are not careful.[/usa_item][usa_item acc_title=”Summary of Plan Benefits”]This is a 4 page, double sided (8 pages) at-a-glance view of how your health insurance plan works and how it compares to other plans, coverage facts, and much more.  The idea behind the Summary of Benefits is that you can easily understand how your plan works and compare it to other plans quickly, side by side.  There will be some examples of how the plan works in certain circumstances.  You will get a copy of this when you buy a health insurance plan and when your plan renews.[/usa_item][usa_item acc_title=”Tax Penalty for Large Employers Not Offering Insurance”]Starting in year 2015, for those “large employers” (that have 50 or more “Full Time/Equivalent Employees”) that do not offer health insurance benefits to at least 95% of their Full Time employees and their dependents (children only, spouses are optional) and that covers at least 60% of the medical bill (called actuarial value), they will receive a penalty.  These large employers that have 50 or more full time/equivalent employees, the penalty of $166.67/month for every single Full Time employee that doesn’t have insurance, will be charged to the employer (minus the 1st 30 Full Time Employees) IF the penalty is triggered.  SEE PLAY OR PAY TAX DEFINITION.  This penalty gets triggered IF…One Full Time employee buys a subsidized plan ON the individual exchange. 

IMPORTANT – TAX PENALTIES ARE NOT TAX DEDUCTIBLE  [/usa_item][usa_item acc_title=”Transparency in Coverage Report”]All QHP’s (qualified health plans) health insurance plans must have this Financial Disclosures report available for the Department of Health Human Services, the State Insurance Commissioner and the State Exchange Board.  This Transparency in Coverage Report is part of the “Quality of Care” requirement.

If the plan is offered through the public (Government Exchange), all the same following information will be reported publicly for anyone to see on their website:

♦ Whatever the Health and Human Secretary wants them to report

♦ Claims payment information

♦ How the insurance company rates their policies (data on rating policies + why they charge what they charge)

♦ Enrollment and disenrollment – people on and people off an insurance company’s enrollment

♦ How many claims have been denied – medical bills denied

♦ Enrollee rights

♦ The claims that have been paid for – medical bills paid for

[/usa_item][usa_item acc_title=”Unaffordable”]When individuals and families buy their own health insurance, IF the insurance is greater than 8% of your “household income”, it is considered “unaffordable” and you are not required to buy health insurance.  MOST Americans will find they will qualify for either Medicaid or a subsidized plan that makes insurance “affordable.” 

If your employer provides insurance for you, it must be less than 9.66% of your W2 Box 1 income.  Call us here at the Nevada Insurance Enrollment Marketplace to verify if this is for you.[/usa_item][usa_item acc_title=”Underwriting”]Starting in 2014, health insurance companies cannot underwrite anymore.  This means that anyone with any medical condition cannot be turned down.  Insurance companies used to look at your individual medical conditions, your age, your height and weight, if you smoked, what medications you took, your medical claims history, any of your pre-existing conditions, your gender, etc.  Now, the only factors that can affect your premium is:

♦ Age – A 60 year old cannot charged more than 3 times what is charged to a 20 year old

♦ Geographic location (where you live)  (Nevada)

♦ Family composition (number of members in the family)

♦ Smoking – rate can be higher by up to 50% and this 50% does not receive a subsidy

♦ Income    [/usa_item][usa_item acc_title=”Vision”]Children under the age of 19 are covered, 1 visit per year, 1 pair of glasses per year are covered.  The pediatric vision has to be covered on and off of the exchange.[/usa_item][usa_item acc_title=”W2 Reporting”]This requirement is a big requirement for employers.  Employers must report ALL of their group health insurance premiums paid AND their employee’s portion of the group health insurance premiums paid (called the “aggregate cost”) on the employees W2’s – Box 12D starting in 2012.  This number could be seen on our 2013 W2’s.  “Transitional Relief” means an employer that has 250 or fewer employees (transitional relief until further notice) does not need to meet this requirement.  This requirement applies to Insured and self-insured plans.  This W2 Reporting requirement is part of the “Quality of Care” requirements.

Not required to be reported is FSA’s, HSA’s, Archer MSA salary, HRA if it is not attached to a medical plan, a multi-employer plan if it’s the only plan offered, military and family, self -insured not exempt to Cobra plans, reduction contributions are excluded.  Exception on Health FSA plans, under cafeteria plans with optional employer flex credits, will need to be included in the W2 reporting where the amount of the FSA exceeds the employee’s salary reduction contribution.  For example, if the employee’s FSA plan has $2000 and the employer contributed $1,500, the $500 has to be reported. [/usa_item][usa_item acc_title=”What types of health plans must comply with the ACA?”]All Major Medical plans – government health plans, group insurance, individual plans, insurers (insurance companies), church group plans, wellness programs that are attached to a group health plan, EAP’s (employee assistance programs), self-insured plans (must comply with some of the provisions).[/usa_item][usa_item acc_title=”What types of coverage does NOT have to comply with the ACA?”]Also called “Excepted Benefits” –  Accident only plans, Wellness plans (that are not associated with a major medical plan that are considered “stand alone”), retiree only plans, stop loss plans, Medicare, Tricare, Medicaid, CHIP, group plans that have fewer than 2 employees, disability income, long term health care, workman’s comp, auto medical, liability insurance, on-site medical clinics, limited scope benefits, mini-medical plans, credit-only, and non-coordinated benefits. 

Check with your plan to see if it is an “Excepted Benefits” plan.
[/usa_item][usa_item acc_title=”Changes For Each Year: 2010, 2011, 2012, 2013, 2014, 2015, 2017, 2018 – “]

2010

Annual limits on health insurance policies increased to pay a minimum of $750,000.00 in 2010 and by the time 2014 comes around there will be no annual limits on the EHB’s (see definition or below in “2014”.)No more lifetime maximums (your medical bills could be unlimited and it would be covered.)  Those that had met their lifetime limits before 2010 could be re-enrolled, (Transition Rule) and in the future, no more life time limits.
Dependent coverage up to the day they turn Age 26 (see dependent definition.)  HIGH RISK POOL – PCIP – Pre-existing Condition Insurance Program for those with pre-existing conditions that couldn’t get insurance and didn’t have insurance for at least 6 months
Patient Protections (these are important, read the definition for “Patient Protection”)ERRP – the Early Retiree Reimbursement Plan (see definition)
No declining children under 19 for pre-existing conditions and their pre-existing conditions must be covered, preventative visits free (see definition)No more retroactive “rescission” on medical claims or policies for small clerical errors except for fraud – can’t be kicked off a plan so easily.  If intentionally committed fraud or non-payment can be rescinded.
A new appeals process begins (see definition)Small Business Tax Credit for small business owners (see definition)
Prohibit higher paid employees from getting better benefit packages than lower paid employeesMedicaid expanded up to 138% of the FPL – Federal Poverty Level and expanded CHIP
A $250 rebate check to seniors that hit their donut holeCreated the definition of “grandfathered plans” 
www.Healthcare.gov.Free Preventative care – (see definition)
Medical costs write off for taxes increased from 7.5% of income to 10% of income 

 

 2011

For FSA’s and HSA’s you must have a prescription for OTC (over the counter) medications, otherwise you cannot use your FSA or HSA monies.  If you use your HSA monies incorrectly, if you pay for items you’re not supposed to, you’ll pay a 20% tax penalty on top of your normal tax rate.  Be careful.  New “Simple Cafeteria Plans” (see definition) are now available for employers as a new benefit for their employees.   
MLR – Medical Loss Ratio  – See DefinitionWellness program grants – See Definition

 

2012

A 4 page “Summary of Benefits” is required to be available for anyone buying a health insurance policy that describes how their policy works in straight forward terms.There is a W2 reporting requirement for large employers that have over 250 employees, they must report what they pay and what the employee pays for their health insurance plan. 
New MLR (medical loss ratio) requirements (see definition.)  Quality of care reporting began (see definition.) 

 

2013

Notice of Exchanges – by 10/1/2013 Employers must give their employees a Notice of Exchange to inform all employed citizens about the formation of these Health Insurance Exchanges.  There is a $2500 cap on salary reductions from the employee’s salaries for their FSA plans.  There is not a cap for employer contributions into the FSA for the employee. 
There is an increase in the medical expense deduction ratio to write off medical bills on your taxes from 7.5% to 10% of your Adjusted Gross Income.New Hipaa Regulations for electronic payments.  Streamline medical records and systems used by hospitals and health care providers to reduce costs.  To avoid duplicate tests that have already been run.  Eliminating duplicated baseline tests. 

 

2014

The Individual Mandate (most Nevadan’s MUST have insurance or get a tax penalty.)No more annual maximum limits on the EHB (essential health benefits – see definition.) 
Insurance companies will covers Clinical Trials (see definition.)  Out of pocket maximum limits (see definition)  – will match the OOP maximums of CDHP’s.
Comprehensive coverage on all Pre-Existing Conditions (see “essential health benefits” definition – no more underwriting)Big time fees to insurance companies who will ultimately have to pass these fees down to us. 
90 day maximum waiting time for new employees getting their insurance through an employer.Deductible limits (on the SHOP exchange only.)  
Fair health insurance premium requirements.  The HHS and State Exchange will monitor insurance rates, if rates get too high the Exchanges can refuse to allow the plans onto the Exchanges.“Exchanges” begin 1/1/2014 (Nevada Insurance Enrollment Marketplace IS a private exchange – see “exchange” definition.)
A law requiring automatic enrollment for employees from employers that are offering health insurance to 200 or more full time employees (pushed back to 2015 or maybe further)Guaranteed renewable and availability (can’t be turned down when you plan renews, and coverage is available) 
Comprehensive coverage with the 10 “Essential Health Benefits” (see definition.)Advanced Premium Tax Subsidies and Cost Sharing Limits (see definitions.)

 

2015

Pay or play tax (see definition)    

 

2017

Large group employers may enter into the Exchanges 

 

2018

“Cadillac plans” are imposed with a high tax 
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