Virginia Council of CEOs - The Healthcare Reform Hurricane
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Hurricane Warning
description
Wondering how you can continue to grow, or even survive, in the face of Obamacare and increased healthcare costs? Fellow business owner Rich Boehling, who runs a company with 380 employees, shared the unique strategy he has implemented in his company to turn this big problem into a big opportunity. A FREE, comprehensive white paper, additional details, and many of the resources Rich used in developing his strategy can be found at http://www.pbjandaca.com/. "ACA Business Strategies: Workshop for Employers of Vulnerable Wage Populations" presented by: Rich Boehling, President and CEO of Productiv Inc. (http://getproductiv.com/) on July 16, 2013, hosted by the Virginia Council of CEOs (http://www.vaceos.org/).
Transcript of Virginia Council of CEOs - The Healthcare Reform Hurricane
Hurricane Warning
ACA Business StrategiesWorkshop for Employers of
Vulnerable Wage populations
Presented by: Rich Boehling
President and CEO of Productiv [email protected]
•Property•Provisions•Processes •People
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•Property•Provisions•Processes •People
ACA has significant impact on some percentage of this “P”
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ACMEPBJCo.
Case Study
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ACME PBJ170 FTE’s
ACME PBJ: 2012 YE
BASELINE: $216,000
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$216,000
Data Source: Bureau of Labor Statistics
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PBJ Financial Results
ACME Chooses ALL PLAY with Part TimeAND RAISES PRICE by 6.5%
TotalCOST
5.3% of Sales
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Scenario Average Results: Owner’s NET = ($115,000) excluding any supply chain price increase.
ACME Steps to ACA Compliance
What the Law Really Says
• Americans must purchase health insurance• Minimum standard• Costs less than 9.5% of their income• Large Employer fines• If an Employer (large or small) offers a
qualified plan to an employee then NO subsidies for the employee in HIX
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How Are the Feds Doing This?
• Through 3 insurance markets:1. Employer Group Plans 2. Expanded Medicaid 3. Govt Assisted Markets / Exchanges
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Employer Shared Responsibility (simplified)
Understanding Your VulnerabilityKEY: Think Large stay Small
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X Axis: 2 Time Bands
• Part Time “P”– Less than 30 hours per week
• Full Time “L” – Greater Than 30 hours per week
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0 +Paid Hours
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Y Axis: 3 Wage Bands
• Disadvantaged Wage Class “1”– Minimum wage to 100% FPL
($11,400 W2)• Semi Skilled “2”– 101% to 300% FPL (up to $34,470
W2)• Skilled and Professional “3”– 301% FPL and Up (over $34,470 W2)
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0
+
100%
300%
Earn
ed W
age
A Census Grid Wage Band + Time Band
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff Part Time Cutoff
P3
P2
P1
L3
0
+
+
L2
L1
Large Employer Grid
Paid Hours
Earned Wage
Medicaid Cutoff
Part Time CutoffP3P2
P1
L3
0
+
+
L2
L1
Part TimeSAFE HARBOR
Some exchange eligibility
Large Employer Grid
Paid Hours
Earned Wage
300% FPL Cutoff Part Time Cutoff
P3
P2P1
L3
0
+
+
L2
L1
Part Time SAFE HARBORAll exchange
subsidy eligible
Large Employer Grid
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff Part Time Cutoff
P3
P2
P1
L3
0
+
+
L2
L1
Part Time SAFE HARBOR
Medicaid eligible
Large Employer Grid
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff Part Time Cutoff
P3
P2
P1
L3
0
+
+
L2
L1Full Time
Medicaid SAFE HARBOR
Large Employer Grid
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff
P3
P2
P1
L3
0
+
+
L2
L1
Current Employer Group plan is OK and
typically affordable
Large Employer Grid
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff Part Time Cutoff
P3
P2
P1
L3
0
+
+
L2L1
Full TimeAll Subsidy
Eligiblew/ FINES
Hurricane Preparedness
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff Part Time Cutoff
P3
P2
P1
L3
0
+
+
L2
L1
SAFE HARBOR
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff Part Time Cutoff
P3
P2
P1
L3
0
+
+
L2
L1
Productiv Inc Example
L3
9P2 L2
35 128L1
303
Current CENSUS
End of Q1 2013
Paid Hours
Earned Wage
P3
P2
P1
L3
0
+
+
L2
L1
End of Q2 2013
Paid Hours
Earned Wage
P3
P2
P1
L3
0
+
+
L2
L1
IRS Delays Penalties til 2015!
• Will likely cause a few things1. Removes urgency, Employers may blink2. Exchanges open offering HUGE subsidies for
enrollees3. Your EID will be reported through the application
process “Appendix A”4. Every Appendix A completed in 2014 will likely
cost you $5200 pretax (as a Large Employer) in 2015
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff Part Time Cutoff
P3
P2
P1
L3
0
+
+
L2
L1
Migration Patterns
EXCHANGE Benefit VALUE for an L2 Worker
Single 30yrs Old Married 28,30 with 2 children
W2 Income
Exchange Benefit Value
AGHI Income
Exchange Benefit Value
Source: Kaiser Family Foundation
Data ACME MUST Use forStorm Tracking
• Name• DOB• Hire DATE• Gender• Zip Code• YTD Hours paid• YTD Compensation• Statutory Notifications• Employment Status
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Small Employer• Rules center on “Are you a Large Employer?”• For ACA sake, small only means “NOT Large”• Common Law Employer is defined by IRS Revenue
Ruling 70-630• Think, “Who is the Pay Master” that is the
employer• Control Group aggregation rule defined by IRC
414• FTE’s are Count of Full Time plus Part Time on pro
rata basis
Small Employer Grid
Days Paid
Earned Wage
Medicaid Cutoff
300% FPL Cutoff
Seasonal Cutoff(4 to 5 months)
UnlimitedSeasonalWorkers
S3
0
+
+
S2
S1
Small Employer Grid
Days Paid
Earned Wage
Medicaid Cutoff
300% FPL Cutoff
Seasonal Cutoff(4 to 5 months)
UnlimitedSeasonalWorkers
S3
0
+
+
S2
S1
SAFE HARBOR
Outsourcing“L2S”
ACME PBJ CORP StructureHQ
(Corporate)
Location 1Physical Plant,
shop, store
Location 2Physical Plant,
shop, store
Location 3Physical Plant,
shop, store
Property, Plant Equipment,
and Inventory
ProcessesCore Business Functions (L3)
Staff (L1, L2)
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ACME Plant Location 1 Group Population Map
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Think About Building a House
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ACME Hires a General Contractor:“An L2S Safe Harbor Pilot”
General Contractor
Subcontractor Subcontractor
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L2S Conversion
Paid Hours
Earned Wage
Medicaid Cutoff
300% FPL Cutoff Part Time Cutoff
P3
P2
P1
L3
0
+
+
L2
L1
Days Paid
Earned Wage
Medicaid Cutoff
300% FPL Cutoff
Seasonal Cutoff(4 to 5 months)
UnlimitedSeasonalWorkers
S3
0
+
+
S2
S1
SAFE HARBOR
Large Employer “L2” Multiple Small Employers
L2S SAFE HARBOR StructureHQ
(Corporate)
Location 1Physical Plant,
shop, store
Location 2Physical Plant,
shop, store
Location 3Physical Plant,
shop, store
Property, Plant Equipment,
and Inventory
ProcessesCore Business &
Management
Process OperatorSubcontractor
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PBJ Financial Results
L2S Outsourcing
• Tax ID (Separate Accounting)• No Common Ownership or Affiliated Group status• No Brother/Sister• No co-employment• ACA Safe Harbor <50 FTE’s• Statutory Obligations FICA/FUTA/SUTA/WC• Business Banking• Capital Financing• Payroll Functions• B2B Transactions (Invoicing/Payments)
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Call to Action
• Meet with your Executive Team• Share what you have learned about L2• Help them complete their own case study• Help guide them to the their best solution• Go to PBJandACA.com for additional
assistance
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Thank You
Rich BoehlingPresident CEO, Productiv Inc
PBJandACA.com
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