Storm & Security

adult population will be excluded from making premium payments into the exchange system. And everyone understands when only sick persons purchase health plans, the cost of the plans will go up. For Business: ��� Effective 1/1/2014, employers with 50 or more full-time employees (average 30 or more hours per week) who fail to provide minimum essential coverage to full-time employees are accessed a tax penalty (���No coverage penalty���) ��� The law requires that all hours worked by part-time employees in a month be aggregated and divided by 120 to determine the number of full-time equivalents. When an employer has 50 full-time employees (or a combined total of 50 including the full-time equivalents), the employer is subject to a tax���or what we called a penalty before the election. ��� Penalty applies if no coverage is offered and: at least one full-time employee enrolls in an exchange plan and is eligible for tax subsidy or cost-share reduction ��� Monthly penalty = $166.67 x number of full-time employees (excluding first 30 employees) ��� Effective 1/1/2014, employers with 50 or more full-time employees (average 30 hours per week) who only provide ���unaffordable��� coverage to full-time employees are accessed a penalty (���Unaffordable coverage penalty���) ��� Penalty applies if coverage is: unaffordable ��� employee premium is above 9.5 percent of household income, or employer pays less than 60 percent at least one full-time employee declines employer coverage, enrolls in an exchange plan, and is eligible for either tax subsidies or cost-share reduction ��� Monthly penalty = $250 x number of full-time employees enrolled in exchange plan and receiving tax subsidy or cost-share reduction (capped at monthly penalty amount for ���No Coverage���) ��� Excise tax of 40 percent on the value of coverage exceeding $10,200/single coverage ($11,800 for retirees and high-risk jobs) $27,500/family coverage ($30,950 for retirees and high risk jobs) ��� Applies to all health plans except dental, vision, LTC, accident/disability and post tax indemnity plans The cost of health care is expected to rise. In all of the information leading up to the 2012 election President Obama���s team has been saying that adding millions of users to the system will bring down pricing. But according to several health care studies, health plans will be forced to adhere to the new standards being enacted by the reform movement, and the price will go up. Currently, most health plans have a hospitalization deductible over the normal $2,000 demanded in the new law, so the days of increasing the deductible to keep the premiums in check are out the window. In addition to lowering deductibles and out of pocket maximums for your employees, the govern- ment has added new mandatory categories of coverage, which in the past were optional. In Massachusetts, where residents have had a very similar mandatory coverage provision for companies that have 11 or more employees, the increase of citizens provided health care coverage has risen to a national high of 98.1 percent of adults receiving some form of health care coverage while the national average is 83 percent and the great state of Texas is lowest at 73 percent. With the increase in participation the health plan cost inflation still exceeded single digits every year. Lead the Way! Strategic business plans have numerous components, but most plans boil down to three: cost savings, the ability of the organization to compete for talented individuals seeking employment, and profitability of the establishment. If the company can afford it, pay for health insurance for your employees, but consider adding a biometrics program, which could reduce your rates by 30 percent. The rates could be reduced substantially more than 50 percent by reducing the number of smokers in your organization. Hire the healthy. The new law allows for incentives for people who are not overweight, and penalties for individuals that don���t meet the guidelines for healthy employees and are over 26 years of age or pay income taxes. So blood screening for low-density lipoprotein cholesterol levels and regular blood pressure checks producing results of 130/85 or less will be rewarded, and blood test that show nicotine are a way to seriously impact your health care premiums. Don���t provide health insurance and pay the tax and let the individual pay on his own. Structure your workforce to stay below 50 employees or limit the number of full-time employees. Remember that the new health care rules only require large employers to offer health coverage to full-time employees. Although part-time employees are aggregated together for purposes of determining whether the employer meets the definition of a ���large employer��� subject to the tax, those aggregated part-time workers are not entitled to health insurance coverage. To help achieve this target, the company could use non-traditional personnel including frequent part-time employees, independent contractors, or temporary staffing organizations. Finally, there are several new pre-hiring programs that increase the likelihood that your employee will be profitable for your company. The use of pre-employment programs like ���Compass��� or ���Advanced Employees Testing��Solutions��� and meeting with a certified reform health care specialist will provide a competitive edge in the age of universal America health care. Don Leggett has been in the insurance industry for 30 years and is currently the managing partner for Insurance Office of America, the seventh largest privately held insurance broker in North America. IBS PREVIEW 2013 / STORM & SECURITY PROTECTION 23

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