It’s in every news headline – Health Care Reform
– and it is in the forefront of everyone’s minds. Businesses, large and small, have many questions regarding the 2,400-page Patient Protection and Affordable Care Act, (PPACA) signed into law on March 23, 2010. This complicated legislation has made sweeping changes to our country’s health care system and will impose many new requirements and mandates for employer-sponsored health care coverage. Many of these provisions are geared toward expanding access to health care coverage through a mix of incentives for private insurance and a dramatic expansion of public programs.
In general, the law requires individuals to purchase health coverage and for employers with over 50 employees to provide it or face penalties. The law sets standards for essential health benefits for plans available through state-run insurance exchanges, and provides premium and cost-sharing assistance to individuals with incomes below 400 percent of poverty. The law also provides small business tax credits for certain small businesses.
Many reform changes are already in place. But the biggest change came on October 1, 2013 — opening day of the nation’s Health Insurance Marketplace, which will change the landscape as to how you as a small employer will offer and purchase health insurance, such as:
- Qualified individuals and small businesses will be able to purchase private health insurance through the Health Insurance Marketplace, also known as an exchange. This insurance must cover a range of essential benefits that were not always covered in the past.
- Coverage sold through the new marketplaces to individuals and small businesses include a range of types, from the lowest-cost bronze plans that have the highest deductibles to higher-premium gold or platinum plans, where you pay fewer out-of-pocket costs.
- Most people shopping in the new marketplaces are expected to qualify for a subsidy to offset part of the cost of the premiums. You may qualify if you’re a single person making less than $45,960 per year or if you’re a family of four earning less than $94,200 per year.
The new rating methodology for small groups is as follows:
- Change to 3:1 ratio. Basically, insurers cannot charge someone age 64 or older more than three times the premium of a 21-year-old.
- Geographic area. Insurers can rate various geographic areas accordingly.
- Tobacco use surcharge. The surcharge may be applied to individual enrollees (not to an entire family unit if just one person smokes), but the amount cannot equal more than 1.5 times the non-tobacco user’s rate and must be offered with a wellness program that enrollees can participate in to remove the surcharge.
- No medical underwriting. Groups will no longer be rated based on medical conditions of the individuals in the group, nor will their group utilization play a role in renewal rates.
- No gender differential.
While all of this looks great on the surface, it will create a state of confusion and may have a negative impact on small employer group premiums. These changes will require you to evaluate the health benefits and take a hard look at your current employee contribution method and determine if that strategy will continue to work for you in 2014.
What is your game plan for offering benefits to your staff? To help you prepare, consider the following questions:
- What is your organization’s philosophy and future plans for compensation and benefits?
- What are your goals for recruitment and retention? Do you have key positions that would be difficult to fill?
- What is your threshold for change?
- How much can you afford?
- At what point, if any, would it be worth it to drop coverage?
- If you plan to drop coverage, what support are you going to provide employees?
- Do you have recordkeeping in place to answer government inquiries efficiently and timely?
Per a federal requirement, ALL employers must provide an Exchange notice to each employee by October 1, 2013. This notification must be provided to employees regardless of plan enrollment, part-time or full-time status.
Below is a sample cover letter and sample notices for your use:
Recently, several key pieces of the PPACA have been delayed until 2015:
- The employer mandate requiring employers with 50 or more employees to provide health coverage or face penalties
- Enforcement of key eligibility requirements for the law's health insurance subsidies
- Caps on out-of-pocket insurance costs
We know these changes are confusing. We are here to help! Whether you have questions regarding how the PPACA applies to your practice, need assistance with implementation in January or would like alternative health quotes, we are your go-to resource. We are well versed in all aspects of the PPACA and are ready to assist and guide you through the process.
Contact us today! It’s the only call you will have to make to prepare yourself for the health insurance changes about to take place. Toll free (877) 732-4748 or email us today.
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To learn more about the PPACA, take a moment to visit these helpful sites.