Health Care Exchanges Open in 2 Months – What is your plan?
In just a few short months, the Cover Oregon and Washington Health Benefit Exchange will be open for shopping – What is your plan?
The Affordable Care Act requirements are different for individuals and small and large businesses. How do I know what is required of me?
Our national health care policy is changing. Yes, that means everyone will be affected in some way, shape or form by the Affordable Care Act. It most important that you find a health insurance consultant that you trust to help you navigate through the process and determine what the best option is for you and your family. Here are a few reasons why:
No Cost. Health Insurance brokers/consultants are paid the by the carriers and the state exchange to help businesses and individuals find the best health insurance solutions for employees and families. There is no cost difference in your premium whether or not you get assistance from a licensed consultant.
Subsidies. There are 26 million Americans that will be eligible for subsidies from the government to help pay the premium for coverage. Do you qualify for a subsidy?
The uninsured. If you currently do not have insurance (which is never a good idea!), it is time to start thinking about it. If you do not have insurance in 2014 you will pay a penalty. You may be eligible for a subsidy through the state exchange to assist with the premium. For example, if you are a 35 year old earning $40,000 per year, you are eligible for a subsidy. You also have an option of whether to purchase insurance inside of the state exchange or outside of the exchange on the individual market.
Individuals. If you currently hold an individual policy, it will be changing at the end of the year. New plans will be in place for January 2014 and may or may not be similar to what you hold today. You will have options inside and outside the exchange for a new plan. And similar to the uninsured, you may qualify for a subsidy inside the exchange.
Small businesses. Starting in October, small businesses will have the opportunity to purchase insurance through the exchange. If you are a small business owner, you may also be eligible for a tax credit if you purchase insurance through the exchange. If you are currently offering benefits to your employees now, you can continue to operate in the same manner that you are now by offering benefits via a carrier outside of the exchange, however a few of the plan requirements will change based on reform such as eligibility – must be offered to employees no more than 90 days after of employment. You also have a few required documents that will need to be provided to your employees.
Large businesses. If you are a large business owner of 50 or more full time equivalent employees (FTEs), you will now be required to provide a basic level of insurance to these employees. There are calculations to determine how many FTEs you have, calculations to determine if you should “pay or play”, measuring periods if you have part-time seasonal employees, calculators to determine if your plan meets the minimim requirement for essential benefits, requirements of how long you need to offer the part-time employees benefits based on your waiting periods. You should be keeping extremely accurate data on hours now for your employees as the information you are collecting now matters in 2014. Similar to small businesses, you will also have changes in eligibility requirements and required documents to provide to your employees.
Insurance Pool (OMIP, FMIP). Because underwriting goes away in 2014 and all Americans are eligible to have insurance, there will no longer be state high risk pools. If you are in one of the pools now, you will be able to choose a new plan in or out of the exchange for 2014.
Plan Ahead. We already know what carriers will be in the exchange. We can already start calculating to see if the individuals or small businesses qualify for subsidies or tax credits. We don’t have all the rate information and all the regulations are not finalized, but now is the time to get a better understanding of what the changes may mean to you.
What is the Patient Protection and Affordable Care Act? ObamaCare? Health Care Reform?
This is a federal statute that was signed into law by President Obama on March 23, 2010. The general goals are to reduce the number of uninsured Americans and the overall cost of health care. In order to meet these goals, a number of multi-faceted changes are being implemented such as the employer / individual mandates, tax credits to businesses and subsidies to individuals. A large part of the reform involves improving health care quality and delivery. Insurance companies will be required to cover all Americans at the same rates regardless of health history or gender. State insurance exchanges will be made available in October 2013 for shopping for coverage for an effective date of January 2014. To date, 26 states have moved forward with a state exchange and 24 states will have have a federally run exchange.
How is the Affordable Care Act going to affect me and my business?
For both small and large employers, the number one factor affecting your business will be compliance. All businesses will have stricter regulations and reporting surrounding human resource administration. The Department of Labor and Health and Human Services are conducting random audits that are costing employers thousands of dollars in penalties because they do not have all the necessary compliance documents, employee notifications or are not HIPAA compliant.
Small employers under 50 employees will be able to shop in the State Exchange “Cover Oregon” in October 2013 or continue with “business as usual”. They are not required to provide health coverage to employees.
Large employers (over 50 employees (or Full Time Equivalent – FTE)) will be required to offer affordable insurance (premium not to exceed 9.5% of employee wages) to 95% of employees working over 30 hours per week. If the employer is an owner of multiple locations, he would add together the total number of employees of all locations. If, for example, there are 100 employees working 24 hours per week, you would multiply the number of hours times the number of employees (100 x 24) and divide by 30 hours (minimum hours needed to be included in the mandate) = 80 Full Time Equivalents. This employer would be required to offer coverage. This calculation protects employees so that employers will not just reduce the number of hours per employee to avoid the mandate.
The bottom line - Your health benefit consultant / agent can walk you through all the requirements. We now have enough information to assist in strategizing for the year ahead in terms of what constitutes “a basic level of coverage”, what the penalties will be for not offering coverage and helping to identify if it is best to Pay or Play in regards to the employer mandate. Contact your health benefit consultant.
What has changed so far?
- State Exchanges are up and open for shopping for October 1, 2013
- Dependents up to the age of 26 are eligible for coverage under your group health insurance plan. The dependent does not need to be in school or claimed as a dependent on tax return, can be married and living outside of the home
- No lifetime or annual dollar limits on your health benefits
- Scheduled preventive services come at no cost to members (no copay or co-insurance)
- Mental health and substance abuse claims will be covered at the same benefit level as medical claims.
- Flexible Spending Accounts (FSAs) – no longer able to pay for over the counter medications unless prescribed by a doctor; Maximum amount is $2,500
- W-2 Reporting: Employers with 250 or more employees will be required to report the “value” of employer-sponsored group health coverage on W-2’s for the 2012 calendar year.
- Uniform explanation of coverage which is a summary and explanation of benefits and coverage provided under a group health plan.
- Employer Mandate has been rescheduled for 2015
- Individual Mandate – everyone must be covered or pay a penalty
- Each state is required to establish a health benefit exchange: Individuals and small employers are eligible to participate in the exchange.
- No pre-existing condition exclusions
- Group health plans are prohibited from requiring waiting periods for coverage in excess of 90 days