Healthcare Reform

HCR

HEALTHCARE REFORM

The Affordable Care Act

The Patient Protections and Affordable Care Act (PPACA) was signed into law in 2010. It has numerous and often complex provisions that phase in over time through 2022. The ACA seeks to lower health care costs by making sure that more people participate and receive preventative care, while prohibiting some of the insurance industry’s more restrictive practices. Below you can find a list of key provisions for individuals as well as employers.

o    The “Individual Mandate” requires all individuals (with some limited exceptions) to have qualifying health coverage or pay a tax penalty.

o    For 2017, the penalty was either 2.5% of your household income or $695 per adult and $347.50 per child, whichever is higher. If you’re uncovered just some months of the year, you pay 1/12 of the penalty for each month you are uninsured.

  • You may be exempt if:
  • You are uninsured for less than three months per year.
  • You have a very low income.
  • You would qualify for expanded Medicaid in a state that has chosen not to expand eligibility.
  • You are a member of a recognized American Indian tribe
  • You belong to a health care sharing ministry.
  • You have religious objections to health insurance.

o    As of right now, the individual mandate will no longer be in effect in 2019 and failing to be insured will not result in a tax penalty.                  

o    Minimum Essential Coverage Standards (MEC) means that a plan must have Actuarial Value of 60% or more and cover 10 Essential Health Benefits

o    Actuarial Value – Equal to the percentage of total average costs for covered benefits that a plan will pay.

  • The insurer/carrier will pay an average of 60% of all of the covered medical costs on the plan and you would be responsible for 40% of covered medical costs until you reach your plan’s cost-sharing or out-of-pocket limit.

o    10 Essential Benefits (EHBs)

  • Laboratory Services
  • Emergency services
  • Prescription Drugs
  • Mental Health & Substance Abuse Services
  • Maternity & Newborn Care
  • Pediatric Services – Including Oral and Vision care
  • Rehabilitative & Habilitative Services and Devices
  • Ambulatory Patient services
  • Hospitalization
  • Preventative & Wellness Services and Chronic Disease Management

o    Certain types of preventative care must be covered at no additional costs to the patient. Click here to see a full list of free preventative services that must be covered.

o    Insurers may not cancel policies in response to an illness

o    Individuals may not be denied coverage for pre-existing conditions. Insurers must offer the same premiums within the same age and geographical group regardless of gender(except for tobacco use)

o    Annual and lifetime dollar limits on care are prohibited

o    Insurers are required to provide individuals with a standardized, plain-language summary of benefits (SOBs) that are easy to understand

o    Rate increases of more than 10 percent must be publicly justified; 80 percent of premiums must be spent on actual health care services

o    Patients are free to choose any physician within the plan’s network and may use an out-of-network emergency room without penalty

o    Patients are granted the right to appeal whenever an insurer denies payment for health care services.

o    Dependents may be covered by their parents’ insurance plans until they turn 26

o    Medicaid eligibility expands to include those earning 133% of the official poverty level, including dependents (in participating states)

State health insurance exchanges allow individuals and businesses to compare plans and enroll for coverage online. The Marketplace offers four categories of coverage:
o Bronze –
o Lowest monthly premium
o Highest costs when you need care
o Silver –
o Moderate monthly premium
o Moderate costs when you need care
o Gold –
o High monthly premium
o Low costs when you need care
o Platinum –
o Highest monthly premium
o Lowest costs when you need care

Your premium can be lower based on your income. When you fill out a Marketplace insurance application, you will find out if you qualify for any savings. You may also click here to read more about eligibility limitations for the Premium Tax Credit.

If you are under 30: You have several options for health coverage besides getting on or staying on a parent’s plan. You may choose what is called a “Catastrophic” Health Plan. This is a way to protect you from worst-case scenarios. These plans include low monthly premiums and very high deductibles. You would pay routine medical expenses yourself. At the same time, these plans do cover the essential health benefits (EHB), preventative services at no cost, as well as 3 or more primary care visits per year before you have met your deductible.

Medicaid and Children’s Health Insurance Program (CHIP):
If your income is low or you have certain life situations, you could qualify for free or low-cost coverage through Medicaid. In all states, you can qualify based on factors including income, some family situations like pregnancy and having young children, as well as disability. If you have children, they may qualify for CHIP coverage – even if they do not qualify for Medicaid. Visit our Resources page for further information.

The Small Business Health Options Program (SHOP) Marketplace: A way for small business owners to compare plans and prices for group plans. See Resources for further information.

What Employers Need to Know:

The health care law contains tax provisions that affect employers. The size and structure of a workforce (small or large) helps determine which parts of the law apply to which employers. Applicable large employers (ALEs) are generally those with 50 or more full-time employees. ALEs are required to offer their full-time employees and dependents affordable coverage that meets at least the minimum essential coverage plan requirements. Employers with fewer than 50 full-time employees are not required to offer benefits. However, there are still certain responsibilities and benefits for small employers as well. Please see further details by employer size listed below.

Requirements:
o You must provide a Notice of Coverage Options to all employees. If you do not offer coverage, you must inform your employees of the Health Insurance Marketplace. The following link includes sample notices to provide to your employees: Notice of Coverage – DOL Sample
o Any employer that offers health benefits must ensure that the plans meet the Minimal Essential Coverage standards.
o Employers may not require employees to wait more than 90 days for health insurance eligibility.
o You must withhold and report an additional 0.9% on employee wages or compensation that exceeds $200,000 for an Additional Medicare Tax (Learn More)
o You may be required to report the value of the health insurance coverage you provide to each employee on his/her Form W-2. More info
o If you provide self-insured health coverage to your employees, you must file an annual return reporting certain information for each employee you cover. More info: Section 6055
o Also, if you self-insure you may be required to pay a fee to help fund the Patient-Centered Outcomes Research Trust Fund.

 SHOP – Small Business Health Options Program –You are able to purchase group insurance within the Health Insurance Marketplace for your small business. These options may be more affordable to your employees than going through private insurance carriers. Your business or non-profit organization must have between 1-50 employees to apply and if you are eligible, you do not have to wait for an open enrollment period.
o Through the SHOP Marketplace, you are able to:
 See if you qualify for SHOP
 Compare plans and prices
 Offer your employees one plan or let them choose from multiple
 Offer only health coverage, only dental coverage, or both
 Choose how much you pay toward your employees’ premiums and whether you offer coverage to their dependents
 Decide how long an employee must wait before enrolling
 See if you qualify for the Small Business Health Care Tax Credit – You may qualify if you cover at least 50% of your full-time employee’s premium costs and have fewer than 25 full-time equivalent employees making about an average of $50,000 or less.
Member Insurance is happy to assist you in setting this up. For further information or to review your options online, click here

Large Employers (50 or more employees)

  • Applicable Large Employers (ALEs) are subject to the same rules as a small business as well as the “employer shared responsibility provision” (section 4980H). This meaning that the employer must offer health coverage to 95% of their full-time employees that is “affordable” and that provides “minimum value”
    Affordable: If the employee required contribution is no more than 9.56% (as of 2018) of the employee’s household income. This also applies to the lowest-cost self-only coverage option that is available to the employee. (If the employee chooses a plan that costs more – the fee would not apply)
  •  Minimum Value: The plan covers at least 60% of the total allowed costs of benefits that are expected to be incurred under the plan and provides substantial coverage of inpatient hospitalization and physician services.
    Employers must also offer coverage to the full-time employee’s dependents as well. If employers do not offer this coverage, they may have to make an employer shared responsibility payment to the IRS. If an employer offers no coverage, the penalty charged would be $3,000 per employee. If coverage is offered but an employee goes to the Marketplace, the employer could be responsible for paying up to $2,000 per employee that goes through the Marketplace for coverage. * The fine would be subject to 50 employees (A group of 80 would only be fined for 50 employees – max). ALEs are also subject to the same information reporting as small businesses as well (see above). Further Information