AFFORDABLE CARE ACT WHAT IT MEANS FOR YOU

AFFORDABLE CARE ACT WHAT IT MEANS FOR YOU New York City Bar Association Presentation February, 2014 Mercer Consumer, a service of Mercer Health & Benefits Administration LLC

Today’s Speakers Frank W. Blackwell, Relationship Manager, Mercer Consumer Frank has worked with thousands of individuals and businesses on their life, health and disability insurance plans. His Association experience includes member and member firms of the State Bar of California, the California Medical Association, the California Pharmacists Association, the California Optometric Association and now the New York City Bar Association. Michelle Black, Sr. Associate, Client Services Manager, Mercer Consumer Michelle brings over 20 years of insurance management experience to her role of administering the Sponsored Life, Health, and Disability Insurance Programs of the New York City Bar Association, the State Bar of California, the New York County Medical Society, the California Medical Association, the California Pharmacists Association, and the California Optometric Association. . Gregory Trotta, Account Executive, Empire Blue Cross Blue Shield Gregory manages relationships with key national brokerages and general agents. He consults on various aspects of the healthcare industry including: underwriting and participation requirements; corporate, administrative and clinical policies, and healthcare reform. Gregory earned his juris doctorate degree from Villanova University School of Law Nicholas Hellmuth, Small Business Account Consultant, United Healthcare Nick is a small business sales representative for United. Healthcare in NY. He manages relationships with brokers and General Agents on a local and national level assisting with the sale, service and retention of accounts. Nick graduated from The Villanova University School of Business and is licensed in Accident, Life, and Health insurance in the state of NY. Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Agenda Discussion Topics for Today 1 Individual Mandate 2 Tax Credits 3 New York State of Health – Individual and Small Business (SHOP) 4 Sponsored Plans of the Bar 5 Oxford and Empire Blue Cross Blue Shield 6 Questions Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

1 ACA What It Means For You Individual Mandate

ACA What It Means For You Individual Mandate Everyone has to have Minimum Essential Coverage By April 1, 2014 Or Pay a Penalty Failure to Pay Penalty Taxpayers who are required to pay a penalty but fail to do so will receive a notice from Internal Revenue Service (IRS) stating that they owe the penalty. If they still do not pay the penalty, the IRS can attempt to collect the funds by reducing the amount of their tax refund in the future. However, individuals who fail to pay the penalty will not be subject to any criminal prosecution or penalty for such failure. (Congressional Research Service 7 5700) Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Individual Mandate Minimum Essential Coverage Under a Government-Sponsored Plan including: Medicare Part A Medicare Advantage Plans Medicaid State Children’s Health Insurance Program (CHIP) TRICARE and the TRICARE for Life program Department of Veterans Affairs (VA) Health Care Program Peace Corps Program Employer-Sponsored Plans with respect to any employee including: Coverage offered by an employer which is a government plan. Any other plan or coverage offered in the small or large group market. Any plan established by an Indian Tribal government. Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Individual Mandate Minimum Essential Coverage (continued) Plans in the Individual Market Grandfathered Health Plans Self funded Student Health Plans Refugee Medical Assistance supported by the Administration for Children and Families State Health Benefits Risk Pool Any other coverage the HHS Secretary recognizes as meeting the requirements outlined in 45 CFR § 156. 604. Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Individual Mandate Minimum Essential Coverage must include Essential Benefits: Emergency Services Hospitalization Maternity and Newborn Care Mental Health/Substance Abuse Treatments Prescription Drugs Rehabilitative Services Laboratory Services Preventive/Wellness Services Pediatric Dental and Vision Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved. 7

ACA What It Means For You Individual Mandate PENALTY The penalty will be calculated as the greater of either: A percentage of the “applicable income, ” defined as the amount by which an individual’s household income exceeds the applicable filing threshold for the applicable tax year. The filing threshold comprises the personal exemption amount plus the standard deduction amount. The percentage will be: 1. 0% in 2014, 2. 0% in 2015, and 2. 5% thereafter OR Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Individual Mandate PENALTY (continued) A flat dollar amount assessed on each taxpayer and any dependents $ 95 in 2014 $325 in 2015 $695 in 2016 and beyond (adjusted for inflation) The amount is reduced by one half for dependents under the age of 18. The total family penalty is capped at 300% of the annual flat dollar amount. Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Individual Mandate Exemptions From Tax Penalty Religious (1402(g)(1) of the Internal Revenue Code of 1986) Undocumented / Not a Citizen Incarcerated Cannot afford to purchase (e. g. contribution exceeds 8% of income) Gap in coverage of less than 3 months Native Americans Income below tax filing thresholds Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

2 ACA What It Means For You Tax Credits

ACA What It Means For You Tax Credits = Financial Support through the New York State of Health Individuals and Families Subsidies (premium credits) Taxpayers with incomes between 138% and 400% of the Federal Poverty Level Sliding scale of tax credits paid directly to insurers to help pay for the insurance Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Tax Credits = Financial Support through the New York State of Health Individual and Families Credit calculation based on the second lowest cost silver plan offered, but the dollar amount is applied to all available plans Available for Household incomes between 138% and 400% of the federal poverty level (FPL) (max: $45, 960 for individuals and up to $94, 200 for a family of 4) May apply for some or all of the credit at time of application Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Tax Credits Individual and family eligibility Must not have access to Affordable and Minimum Essential Coverage through an employer Affordable is defined as employee contribution towards employer health plan costing less than 9. 5% of the employee’s wages from that employer Somewhat discriminatory against dependents not subsidized by employer plans Must be a U. S. citizen or a legal resident Subsidy Estimator NYState. Of. Health. NY. gov/Premium. Estimator Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Tax Credits Federal Poverty Levels Persons in Family/Household Poverty Guideline 1 $11, 670 2 15, 730 3 19, 790 4 23, 850 5 27, 910 6 31, 970 7 36, 030 8 40, 090 Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Tax Credits • Premium required to pay cannot exceed these amounts For example: • Married couple with 2 children earning $47, 100 annually (200% FPL) • Annual premium for second lowest cost silver plan is $10, 000 annually • Tax credit equals $10, 000 minus $2, 968 (6. 3% of $47, 100) $7, 032 premium tax credit $2, 968 premium payment Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Tax Credits Employer Tax Credit - 2014 Partial Credit available to Small Business with 50 lives and under who: – Provide at least 50% of the cost of health care coverage – Employ less than 25 full time employees (excludes business owners and family members) – Paying annual wages averaging less than $50, 000 per FT employee Maximum Credit for tax years 2014 and beyond: – For employers with ten or fewer full time employees and average annual wages below $25, 000 For Profit 50% of Employer contribution for employees Tax Exempt 35% of Employer contribution for employees Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You Tax Credits Employer Tax Credit – 2014 From the IRS questions and answers about the Credit… Q. Who is an employee for purposes of determining FTEs and average annual wages? The following individuals are not considered employees for purposes of the credit: Owners of the small business; such as sole proprietors, partners, shareholders owning more than 2% of an S Corporation or more than 5% of a C Corporation Spouses of these owners; and family members of these owners, which include a child, grandchild, sibling or step-sibling, parent or ancestor of a parent, a step-parent, niece or nephew, aunt or uncle, son-in-law or daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-inlaw. A spouse of any of these family members should also not be counted as an employee. Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

3 ACA What It Means For You New York State of Health exchange

ACA What It Means For You New York State of Health Benchmark New York Plan: Oxford EPO small group plan Platinum Added missing Essential Benefits Became the basis to establish actuarial value Exchange Goals: Gold Cover many of the 2. 7 M uninsured under 65 (16%) Silver • Plan pays 90% • Enrollee pays 10% • Plan pays 80% • Enrollee pays 20% • Plan pays 70% • Enrollee pays 30% Create a platform where plan benefits could be more easily compared Bronze Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved. • Plan pays 60% • Enrollee pays 40% 20

ACA What It Means For You New York State of Health Small Business Health Options Program SHOP tax credits available to firms that: Employ fewer than 25 full time employees (excludes business owners and family members) Pay annual wages averaging less than $50, 000 per full time employee Platinum Gold • Plan pays 90% • Enrollee pays 10% • Plan pays 80% • Enrollee pays 20% Maximum credit for tax years 2014 and beyond: For employers with ten or less full time employees and averages annual wages below $25, 000 For Profit — 50% of ER contribution Tax Exempt — 35% of ER contrib Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved. Silver Bronze • Plan pays 70% • Enrollee pays 30% • Plan pays 60% • Enrollee pays 40% 21

ACA What It Means For You New York State of Health Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You New York State of Health SHOP Exchange Metro. Plus Health Plan Bronze, Silver, Gold, Platinum 1 HMO plan at each level Health Republic Bronze (2), Silver (3), Gold (2), Platinum (2) EPO Plans Oxford Bronze (1 EPO plan) Silver (2: EPO, PPO plans) Gold (1 EPO plan) Platinum (2: EPO, PPO) Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You New York State of Health Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You New York State of Health Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

ACA What It Means For You New York State Of Health Exchange Sole Proprietors Consistent with federal requirements, sole proprietors will purchase coverage through the Individual Exchange. There are nearly 1. 1 million sole proprietors in the State of New York, of which 23% are uninsured and 14% are insured in the nongroup market (Artifact 6. 1. 6). Twenty three percent of sole proprietors have income below 139% of FPL and 34% of sole proprietors have incomes between 139 399% of FPL and would be income eligible for Insurance Affordability Programs when available in 2014. Consequently, the Individual Exchange will enable these sole proprietors to access affordable, comprehensive health insurance. Blueprint Summary for Section 6. 0 SHOP, NY. Gov October 26, 2012 Mercer Consumer, a service of Mercer Health & Benefits Administration LLC Confidential and Proprietary Copyright 2014 Mercer LLC. All rights reserved.

4 ACA What It Means For You City Bar Sponsored Health Plans

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