What does health care reform mean for employers?
Small Business Tax Credit
To encourage small businesses to offer health insurance coverage to their employees, the Affordable Care Act offers a temporary tax credit for some small employers. There are threshold requirements for the employer’s contribution, the number of employees and the average salary. Small businesses’ insurance coverage is subject to other provisions of the law, such as Essential Health Benefits. Qualifying small employers may draw the credit no more than two years and, beginning in 2014, can only access it through the Small Business Health Options Program (SHOP) Exchange.
In the spotlight: Health Care Reform and Small Business Tax Credits
“If you like your plan, you can keep it” seemed to be the Affordable Care Act motto when it was signed into law in 2010. To “keep the plan you like,”” you must remain on what is referred to as a “grandfathered plan” or a plan that existed before March 23, 2010 (when the law was passed) and has not undergone particular changes. Grandfathered plans are exempt from some provisions of the Affordable Care Act, like providing certain preventive services at no cost-share, but must implement others, like no waiting periods longer than 90 days. Additionally, changes made to grandfathered plans including changing deductibles, copayments and coinsurance could result in the loss of grandfathered status.
In the spotlight: Health Care Reform and Grandfathering
Exchanges (also known as Health Insurance Marketplaces) are online marketplaces where individuals, families and small businesses can shop for coverage. Exchanges also serve many functions for implementing the Affordable Care Act, including allowing individuals and small businesses to shop and compare coverage, providing standardized information about the coverage and pricing and, perhaps most importantly, determining eligibility for and connecting individuals with federal subsidies to purchase insurance. While Exchanges will be implemented in all 50 states, some states have chosen to implement their own, state-based Exchanges, while the federal government will implement Exchanges in others, and still other states will have a hybrid version, called a Partnership Exchange. North Carolina plans to operate under a Federally Facilitated Exchange (FFE) in 2014.
In the spotlight: Health Care Reform and American Health Benefit Exchanges
The Affordable Care Act got its name from the provisions intended to make health insurance coverage more affordable to the majority of the uninsured individuals in the country. The law accomplishes this primarily through two kinds of subsidies: one covers a portion of the premium and one reduces eligible consumers’ out of pocket expenses. These subsidies, offered exclusively through the Exchange, are only available to qualifying individuals and families who are at 400% of the federal poverty level In 2012, that results in those with an income of less than $45,960 for individuals and less than $94,200 for families of four.
In the spotlight: Health Care Reform and Health Care Subsidies
Agents and Brokers
Health insurance brokers will no doubt be affected by the Affordable Care Act – their services will be especially needed to explain the complicated changes and opportunities for businesses and individuals. The Affordable Care Act makes many sweeping changes to how health insurance is sold, including new requirements on rating, medical spending and Exchanges (please see Exchanges section or Spotlight). Brokers will be at the forefront of these changes, as the primary actors between health insurers and consumers.
In the spotlight: Health Care Reform and Insurance Brokers
Small Business Health Options Program
In 2014, small businesses in NC with up to 50 employees can purchase health insurance coverage through the Small Business Health Options Program (SHOP). Similar to the Individual Exchange, the SHOP is meant to offer small employers access to a range of health insurance plans provided by commercial insurance companies that meet the same minimum essential health benefit standard, in a format that allows employers and employees to compare their choices and pricing options. Starting in 2016, the SHOP will be expanded to include employers up to 100 employees and in 2017, states are allowed to open the SHOP to employers of more than 100 employees.
In the spotlight: Health Care Reform and Small Business Tax Credits
Essential Health Benefits
The Affordable Care Act includes a requirement that all non-grandfathered individual and small business insurance plans must cover a certain set of services within 10 categories established by the Institute of Medicine. Though the 10 categories are dictated federally, including things like maternity care and pediatric dental care, the specific services that must be provided are determined at the state level by the selection of a benchmark plan. In North Carolina, the benchmark plan is a BCBSNC plan and covers a comprehensive set of services that all North Carolina health plans must now offer in the individual and small group markets.
In the spotlight: Health Care Reform and Essential Health Benefits
The Affordable Care Act (ACA) affects employers in numerous ways. These range from new benefits requirements for small businesses to a shared responsibility requirement for large businesses. Some small businesses who offer health insurance coverage may be eligible for a tax credit while some large businesses who offer health insurance coverage may still be subjected to additional taxes and fees.
Employers have long been the primary source of health insurance coverage in this country. As the nation’s health continues to deteriorate, employers’ costs have risen exponentially. A few unhealthy employees can account for 25-30% of an employer’s overall health care costs. The Affordable Care Act has several provisions intended to enable employers to help their employees maintain or improve their health. The allowable incentive for employees participating in a company-sponsored wellness program increases from 20% to 30% and there are grants available for certain small businesses to implement a new program.
In the spotlight: The Affordable Care Act and Wellness Programs
Summaries of Benefits and Coverage
Summaries of Benefits and Coverage and Uniform Glossary documents are a requirement of the Affordable Care Act that went into effect in September of 2012. The documents are intended to help consumers as they compare and shop for health insurance companies by explaining benefits in a consistent manner. The federal government compares these documents to the nutrition labels found on prepared food packaging, but evaluating a health insurance plan’s benefits can be a bit more complex than evaluating the nutritional value in a can of peas.
In the spotlight: Health Care Reform and Uniform Coverage Documents
Health care reform means more benefits and improvements, but at a cost.
Some consumers will pay less than they do now for health insurance. Some will pay more. Learn More
Tax credits and more health insurance purchasing options for businesses in NC. Learn More
The impact of health care reform changes looks different for every consumer. Learn More