The Affordable Care Act (ACA) or Obamacare means major changes are in store for American business. Now more than ever is the time to prepare before it is too late. Note that most of these apply to firms with more than 50 Full-Time Equivalents which are calculated at 30 hours per week on average.
Here is has happened so far (2010-2011):
- No Limit on coverage
- Coverage of Children up to the age 26 regardless of student, dependent or marriage status.
- Medical Loss Ratio rebates if administrative costs are more than 20-15%. Indirect consequence for certain employers depending on insurance plan.
- 100% payment of preventive care benefits for non-grandfathered plans.
- W-2 reporting of the employer and employee cost of health coverage.
- 100% coverage of preventive care services for women including contraceptives.
- Uniform summary of benefits and coverage (SBC) to be provided at initial and annual enrollment.
- Penalty for failure to notify up to $1,000 per enrollee and $100 per day per individual it applies to.
- Eight page “Summary of Benefits and Coverage” required for applicants who enroll or re-enroll
- Flexible spending account contributions limited to $2500/year
- New tax of $1 per covered person for Comparative Effectiveness Research (Large employers)
- No annual limits on dollar value of essential health benefits
- No exclusion for pre-existing conditions expanded to all participants
- Wellness plans penalty/incentive increased to 30-50% of coverage cost
- Waiting periods for entry into plans not to exceed 90 days
MORE AUDITS IN KEY AREAS MAY BE FORTHCOMING:
- All required ACA provisions
- Summary plan descriptions
- Eligibility rules
- Benefits during leaves of absence
- HIPAA certificates of coverage
- Required plan notices
POST EMPLOYMENT COVERAGE AGREEMENTS:
- Current COBRA or post-employment coverage must be aligned with emerging regulations in 2013
- ”Fail safe” language will be needed
PAY OR PLAY: PROVIDE COVERAGE OR PAY PENALTY
Health insurance exchanges: employers with 50+ full time employees can choose
2018 CADILLAC TAX
40% annual excise tax on plans that exceed coverage value of $10,200/single or $27,500/family. Includes both employee and employer contributions
PREPARE: DON’T DELAY
- You must comply with the law. It will take time.
- Health plans will be audited for compliance.
- Decide a plan for “pay or play mandate.”
- Emerging regulations can change previous regulations.
Health Care Reform: Critical Next Steps for Employers www.tlnt.com 7/27/2012