In 2010, President Obama signed comprehensive health reform, The Affordable Care Act, into law. The ACA, or what's commonly known as "health care reform," will take years to become fully enacted and requires the creation of many new regulations. The legislation focuses on provisions to expand coverage, control health care costs, and improve healthcare delivery systems, with important implications for companies and employees alike.
Like many Americans, you're probably unsure of how this landmark legislation will affect you, your family or your business. Associated Benefits recognizes the challenges created by The ACA's broad scope of changes and the rapid pace at which the health insurance and benefits landscape is being altered. Below are several of the most commonly asked questions regarding the legislation's far-reaching effects.
What does ACA mean for non-grandfathered vs. grandfathered plans?
If your plan has "grandfathered" status, it means:
If your plan has "non-grandfathered" status, it means:
What is grandfathering?
The Affordable Care Act (ACA) standards and requirements have an important exception. If plans were already in place on March 23, 2010, and do not violate the impermissible change rules, they meet the criteria to be deemed as a "grandfathered health plan." The plans that meet this status are granted a permanent exemption from certain mandates. The rules are applied separately to each benefit option; for example, if an employer offers both a PPO and an HMO, each option will retain grandfathered status as long as each does not violate the impermissible change rules.
What issues should I consider regarding grandfathering?
What does it mean to me as an employer?
Employers are at the epicenter of the Affordable Care Act. The decisions that you make associated with ACA will have significant ramifications for both you and your employees. Employers will potentially be subject to new penalties. Tax credits will be available to selected employers as well. The ACA includes a number of provisions that impact and drive your decisions on providing health care coverage as a benefit to employees. Additionally new systems and processes may be required to meet mandates, avoid being penalized and meet the new detailed reporting requirements.
A few of the key areas of employer impact:
When will ACA be fully implemented?
Coverage mandates and insurance reforms will continue to be implemented through 2018.
What size employer is mandated to provide coverage?
An employer with 50 or more Full Time Equivalencies (FTEs) that work 30+ hours per week must provide coverage. ACA requires large employers to provide health coverage per the regulations issued by DHHS, DOL, and the NAIC.
What are the penalties for noncompliance with employer mandated coverage?
Penalties will be assessed for not providing coverage. For example, if one FTE in an employer group with over 50 employees receives subsidized coverage, the employer will be penalized. Penalties will also be assessed if someone receives a subsidy or is charged greater than 9.5% of their wages.
What does ACA mean for small employers?
Per The ACA, a small employer is defined as a business having less than 50 FTEs. Small employers are not mandated to provide health insurance to employees. A tax credit of up to 35% (25% for non-profits) is immediately available for small employers who offer health insurance, pay 50% of the employee coverage, have less than 25 employees and the average wage (excluding owner's and owner's family members) is $50,000 or less. Tax credit is available only for the purpose of offsetting tax liability.
Associated Benefits' ACA Decision Support Consultation can help you pinpoint your opportunities, obligations, and strategies for dealing with the ACA provisions.
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ACA Decision Support Technology software is now available for licensing to select groups. For more information, contact us at by email at email@example.com or by phone at 877-291-9256.