Beginning January 1, 2014, all individuals and employees of small businesses will have access to purchase health coverage through the Health Insurance Marketplace (aka the Exchange or SHOP). Open enrollment for the Marketplace begins October 1, 2013.
Section 1512 of the Affordable Care Act requires all employers to provide the Exchange notice to all employees (regardless of full or part time status or plan enrollment status) no later than October 1, 2013. The notice must also be supplied to all new hires within 14 days of their hire date. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan if they are not employees.
The purpose of the notice is to:
1) inform employees of the existence of the Marketplace (aka Exchange) and how they can contact the Marketplace for assistance
2) inform employees if their current plans meets minimum value standards for the purpose of determining if they will be eligible for a premium tax subsidy in the Marketplace
3) inform employees if they purchase coverage through the Marketplace they will lose the employer contribution to any health plans offered by the employer.
This notice can be provided to employees via paper or electronically. If you decide to post is on your company intranet, you must distribute a notice to all employees directing them where the notice can be located.
Even if you do not currently provide health coverage to employees, you are still required to distribute the Marketplace notice explaining this.
Please contact our office if you need a copy of the English or Spanish versions of the Exchange notice.
You may have heard a lot about how the Affordable Care Act (ACA) is going to change health insurance in the next year, but does it all apply to you? If you get your insurance from your employer, there may be a chance that you may be enrolled in a “grandfathered plan” and some of these changes may not affect you – yet.
Some health plans were allowed to be exempt from some of the ACA’s rules and protections in the interest of a smooth transition and to allow employers and individuals to keep their current policies in force without having to make substantial changes. Almost half of all Americans who get insurance through their jobs are enrolled in such plans, however that number is expected to continue to decline every year.
Consumers should know the status of their plans since that may determine whether they are eligible for certain protections and benefits created by ACA. For example, an employee at a large company may wonder why his employer provided coverage does not included the free preventative services that he has heard about on the news. In order to understand this, you must understand the status of your current medical plan and how grandfathering works.
What is a grandfathered plan?
Most health insurance plans that existed on March 23, 2013 are eligible for grandfathered status and therefore do not have to meet all of the requirements of the health care law. But if an insurer or employer makes significant changes to a plan’s benefits or how much members pay through premiums, copays, or deductibles, then the plan loses that status.
Both individual and group plans can be grandfathered. If you get coverage through an employer and they currently offer employees a grandfathered plan as part of their benefits package, you can enroll in this plan even if you were not enrolled on March 23, 2010.
What Rules Does a Grandfathered Plan Have to Follow?
A grandfathered plan has to follow some of the same rules other plans so under the ACA. For example, the plans can not impose lifetime limits on how much health care coverage an individual can receive, and they must offer dependent coverage for young adults until age 26.
There are many rules, however, that grandfather plans do not have to follow. For example, they are not required to provide preventative care without cost-sharing. In addition, they do not have to offer a package of “essential health benefits” that individual and small group plans must offer beginning 2014. Grandfathered individual plans can still impose annual dollar limits (such as capping key benefits at $750,000 in a given year) and they can deny coverage for children under age 19 if they have pre-existing conditions.
How Many People Are Enrolled in Grandfathered Plans?
In 2013, 36% of those who get coverage through their employer are enrolled in a grandfathered health plan. This number is down from 48% in 2012 and 56% in 2011, according to the Kaiser Family Foundation Employer Health Benefits Survey. Most plans are expected to lose grandfather status over time though.
How Do I Find Out If I’m Enrolled in a Grandfathered Plan?
If you want to know more about your coverage, it is best ask your insurance company or your employer’s human resource department about the status of your plan. If your employer is currently offering a grandfather plan, they are required to release a notice to you annually if they are offering benefits through a grandfathered medical plan.
Please contact our office for more information regarding if your current plan is considered “grandfathered” or for more information on ACA.
The health insurance Marketplace created by the Affordable Care Act (ACA) will open on October 1st. Most small employers (those with 50 or fewer full-time employees) are not required to offer health insurance coverage under ACA. Businesses with more than 50 full time employees have gotten a one year reprieve from the “pay or play” penalties. But all companies, regardless of size, are required to notify their employees about the Obamacare Marketplaces by October 1st.
The state and federal insurance exchanges are websites on which individuals and small businesses can shop for health plans. Though the deadline is less than a month away, many small businesses may not realize they have to notify employees of the existence of the Marketplace (aka Exchange). Many small business owners are unaware of this requirement or are under the misconception that it does not apply to them because they are too small to be governed by the health care reform law’s mandate. It is not clear how the requirement will be enforced yet, but penalties for businesses that do not comply could reach $100 per worker per day.
Some employers assume that because they are a small business who does not offer health insurance currently that the requirement does not apply to them. The Exchange notification requirement applies to any business regulated under the Fair Labor Standards Act (FLSA), which covers all companies with at least one employee and $500,000 in annual revenue.
The U.S. Department of Labor has posted information about the notification requirement on its website and has provided model notices (in both English & Spanish) to be used by both employers who offer insurance and those who do not offer insurance.
The one to three page model notices can be downloaded, filled out, and printed, either for distribution in the workplace or for mailing to employees’ homes. Employees who are hired after October 1st must be provided the notice within 14 days of their date of hire with the company. Employees must be provided the notice, regardless of their enrollment status in the group’s medical plan. The safest route is to distribute the notice via U.S. mail or follow the instructions for distributing it electronically. Currently there is no requirement that states the employer must obtain signatures from employees confirming their receipt of the notice.
Please contact our office for more information on how to ensure you business is compliant with ACA requirements in 2014.
The topic this month focuses on bringing clarity to some of the myths that are surrounding Health Care Reform currently including:
Please contact our office directly if you have any questions about Health Care Reform and how it will affect your business.
For Florida residents hoping to purchase coverage through the new health insurance exchange, the state Office of Insurance Regulation has recently released information that your options will largely depend on where you reside.
As of August 2013, 10 insurance companies have received federal approval to sell Floridians health plans on the federally assisted health exchange, which rolls out Oct. 1. However, Kevin McCarty, Florida’s Insurance Commissioner, has said that not all companies will sell plans in all counties.
More than half of Florida’s counties will have only one or two insurance companies selling plans through the new marketplace and no county will offer plans from all 10 companies, according to the insurance commissioner’s office. The companies that will be actively selling within the Florida Exchange are:
South Floridians will have the most choice, while residents in rural areas have the least. Broward and Miami-Dade counties will sell plans from nine federally approved insurers. In Central Florida, residents of Orange, Osceola and Lake counties will have options from five insurance companies, while Seminole and Volusia will have six. Population density and an insurer’s current presence in an area will determine if the carrier has choose to sell in your area.
Although the Florida insurance commissioner knows which 10 companies have been approved to sell plans in Florida, they would not disclose which companies would sell in each county yet.
A spokesman for Blue Cross Blue Shield made no secret they would be selling plans in all 67 Florida counties, making it the only insurer to do so. Blue Cross Blue Shield will in fact be the sole seller for exchange plans in 21 Florida counties.
Insurers can offer a tiered set of plans, ranging from bronze (a leaner choice) to platinum (with the most benefits). Still forthcoming, however, are details about what the individual plans will offer and what each will cost.
Florida residents should begin now to familiarize themselves with the exchange, explore the varied levels of coverage available and understand the possible tax credits available since open enrollment for the Exchange is scheduled to begin October 1st for a January 1, 2014 effective date.
To qualify for tax credits available under the health-care overhaul, residents must get their insurance on the government exchange (healthcare.gov).
On July 2, 2013, the U.S. Treasury Department delayed enforcement of the employer “play or pay” mandate penalties and reporting requirements by one year to 2015. Removing the penalties for noncompliance and the requirement to report compliance or noncompliance essentially allows large employers one more year to prepare for implementation of the play or pay provisions.
There has been some confusion, however, on the healthcare reform changes taking effect in 2014 regarding what was and was not postponed. Still taking effect in 2014 are the State Exchanges (and the October 1, 2013 employer’s notice of Exchange requirement), the individual mandate to obtain minimum essential coverage, federal premium assistance, the 90-day limit on waiting periods, the termination of all pre-existing condition limitations for all participants, the removal of annual limits on essential health benefits and the optional increase in wellness program incentives from 20% to 30% (50% if tobacco related).
Please contact our office for more information on Health Care Reform and how it will impact your business.
If your company offered either a Health Reimbursement Account (HRA) or Medical Expense Reimbursement Plan (MERP) as part of your employee benefits package in 2012, you must report and pay the PCORI fee for your 2012 plan year no later than July 31, 2013. Please note that the penalty for not filing can be as high as $10,000 per month.
You must use the IRS Form 720 to report and pay the PCORI fee.
If you used a third party administrator to handle the administration of your HRA or MERP plan, they should have provided you with the necessary information to complete Form 720 as they are not permitted to file this with the IRS on your behalf.
Please let us know if you have any questions.
The Obama administration recently kicked off the Health Insurance Marketplace education effort with a new, consumer focused HealthCare.gov website paired with a 24-hours a day consumer call center to help Americans prepare for open enrollment and sign up for private health insurance. The new tools will help Americans understand their choices and select the coverage that best suits their needs when open enrollment for the Exchange begins October 1, with coverage beginning January 1, 2014.
The website will continue to add functionality over the summer months so that, by October, consumers will be able to create accounts, complete an online application, and shop for qualified health plans. For Spanish speaking consumers, CuidadoDeSalud.gov, will also be updated to match HealthCare.gov’s new consumer focus.
Key features of the website include integration of social media, sharable content, and engagement destinations for consumers to get more information. The site will also launch with web chat functionality to support additional consumer inquiries.
Between now and the start of open enrollment, the Marketplace call center will provide educational information and, beginning October 1, 2013, will assist consumers will application completion and plan selection. In addition to English and Spanish, the call center provides assistance in more than 150 languages through an interpretation and translation service. Customer service representatives are available for assistance via a toll-free number at 1-800-318-2596 and hearing impaired callers using TTY/TDD technology can dial 1-855-889-4325 for assistance.
Beginning in 2014, large employers (those with 50 or more employees) that do not provide “qualifying” coverage and who have employees who receive a subsidy for Exchange coverage may be subject to certain tax penalties, as high a $3000 per year per employee, under Health Care Reform. We can show you a lower-cost alternative to traditional major medical that will help you avoid these penalties. The cost ranges from $105-$125 per month for employee only coverage and the premium is tax deductible to the employer.
For employers who choose to not offer an ACA compliant plan in 2014, the penalty is an excise tax, therefore not deductible.
This could be the perfect solution for large employers who are looking for an alternative to the high cost of traditional major medical coverage while avoiding the potential penalties of ACA.
Please contact our office if you would like more information about this program and your options as an employer in 2014 with Health Care Reform.
On May 31st, the US Department of Health and Human Services (HHS) issued a final rule delaying the implementation of a significant portion of the Federal Small Business Health Options Program (SHOP) Exchanges until 2015.
The Patient Protection and Affordable Care Act (PPACA) calls for the creation and implementation of health Exchanges for both individuals and small businesses. These marketplaces were to be operational by October 1, 2013 in time for the open enrollment period for a January 1, 2014 effective date.
The Obama administration announced that SHOPs will only offer one health plan now in 2014, instead of offering small employer groups a choice of several health plans. As reported in the Wall Street Journal, “For transitional purposes we have proposed that in 2014, a state may elect to have businesses choose one plan to offer employees, and in 2015 employees will be able to choose from the full range of plans in the marketplace,” said Fabien Levy, an HHS official.
This delay will apply to states in which the federal government will administer the Exchanges, and makes the requirement optional for state-run Exchanges. The administration cited operational challenges as the reason for the delay.
This announcement has been met with disappointment by many small businesses as it will limit the attractiveness of exchanges to small businesses. The vast majority of small employers want their employees to be able to choose among multiple insurance carriers so employees can pick the plan to best meet their personal needs.
Whether a similar delay will be announced for the individual Exchanges remains to be seen.