Health Care Reform: ACA Taxes

A little information about the new taxes to come in 2014 courtesy of Blue Shield:

What is it?

The Affordable Care Act (ACA) requires that taxes be collected in order to fund certain provisions of health reform. Beginning January 1, 2014, there are two new taxes that will go into effect. Below is a summary of what they are and how you can prepare.

The Health Insurer Tax – This annual tax is designed to offset a portion of the expenses related to providing premium subsidies and tax credits to qualified individuals purchasing coverage through exchanges. This tax will be applicable to all small groups effective January 1, 2014, and is expected to be approximately 2.3% of dues and/or premiums.

Transitional Reinsurance Contribution Program Tax – This tax will be used to fund transitional reinsurance programs in each state to help cover costs of the highest-risk individuals in the non-group market. It is effective from 2014 to 2016 and applies to all small groups as of January 1, 2014. In 2014, the tax is estimated to be $5.25 per Blue Shield member, which is approximately 1.5% of dues and/or premiums.

What does this mean to me and my employees?

When these taxes go into effect, customers’ dues and/or premiums will increase by an amount that covers the new taxes. Starting with January 2014 bills, the new taxes will be included as a percentage of the dues and/or premiums.

Small group employers will continue to have a 12-month rate guarantee and the plan base rates will continue to be in effect for 12 months. As mentioned above, however, in January 2014, the two taxes will be added to plan dues and/or premiums.


Top 10 ACA Points You Should Know

Are you wondering what the different parts of the ACA really mean? Straight from Blue Shield, here are the top 10 key issues you should know about.

1. Guaranteed Issue – No one will be denied healthcare due to health, age, gender, or other issues including pre-existing conditions.

2. The Individual Mandate – All individuals will be required to have coverage that qualifies as the minimum essential by January 2014, or risk paying a tax penalty.

Ind. Mandate table

3. Grandfathered Plans – People who have healthcare plans that were in effect prior to March 23, 2010, can keep their plans if they want. The only caveat is they are not subject to the ACA’s requirements.

4. New Marketplaces – Marketplaces (Exchanges) have been created as a place for people to explore and compare different health plans. You can access this marketplace directly through brokers and individual carriers just as before.

5. Open Enrollment – This Open Enrollment period began on October 1, 2013 and ends March 31, 2014.

6. Essential Health Benefits – All non-grandfathered plans for individuals and small businesses will include the following 10 categories:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioural health treatment
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including or and vision care

7. Metal Level Plans – All non-grandfathered health plans offered to individuals and small businesses will be required to provide coverage at a “metal level”—Platinum (90%), Gold (80%), Silver (70%), and Bronze (60%)—based on the actuarial value (E.g. With a gold plan, the Insured pays 20% of health care costs, while the plan covers 80%).

8. Federal Subsidies – Subsidies will be available starting 2014 for those whose annual income is between 134% and 400% of the Federal Poverty Level (FPL) and who meet the guidelines. Subsidies will help lower the costs of both premiums and out-of-pocket costs. Those who fall less than 134% below the poverty level may be eligible for Medi-Cal. Tax credits will also continue to be available to small businesses with 25 or less full-time equivalent employees to help cover the costs of providing coverage.

9. ACA Taxes – Taxes covering the ACA will start January 1, 2014. Click here for a downloadable copy of the ACA tax fact sheet

10. Play-or-Pay – As of January 1, 2014, the ACA requires companies over a certain size to offer affordable health coverage to full-time employees and their dependents or face paying a penalty if an employee receives federally-subsidized coverage through the Exchange.

 


Health Care Reform: Getting Covered

With the health care reform bill soon to take effect, many
people are worried about how they’re going to afford coverage. Fortunately,
there are many assistance programs available to make sure that your health care
is affordable. For more information, click here to read the full article. 

Cost-sharing subsidies help to reduce the amount of expenses
that an individual has to pay out of pocket (i.e. copayments). The assistance
programs are based on an individual/family’s income. The chart below shows some
examples of what you and your family could qualify for. 

Health Care Reform table

*Income levels are based on the year 2012

**California only 

Sweeney & Sweeney will be having more updates to
come. Please feel free to call us with any questions. Our amazing health team—
John, Jamie, Ellen, Dan, and Cheryl—are always ready and willing to help!