Information about the impact of the Affordable Care Act on health insurance for small employer groups (companies with few than the equivalent of 50 full-time employees) and large employer groups (companies with the equivalent of 50 or more full-time employees.
Healthcare reform affects everyone differently. As Blue Cross of Idaho continues to analyze the new law, we will post relevant frequently asked questions so you can better understand what healthcare reform changes to expect. These questions and answers are informational and not the equivalent of legal advice. Consult legal and tax experts to understand how the law will affect your individual or business circumstances.
What immediate changes should I expect as an employer?
For employer-provided healthcare plans that start on or after Sept. 23, 2010, employers are required to provide preventive coverage without cost sharing, including immunizations, breast cancer screening and certain recommendations of the U.S. Preventive Services Task Force and other agencies such as the Centers for Disease Control. Blue Cross of Idaho is working with our customers to determine how best to implement this near-term requirement.
For plans with effective dates that begin on or after Sept. 23, 2010, healthcare reform allows children dependents up to age 26 to remain on their parents' policies. Blue Cross of Idaho already continues coverage for currently enrolled dependents if they are under age 26. We are working with self-funded groups that wish to comply with this requirement in advance and currently allow dependents up to age 26 who previously aged off their parents' policies to re-enroll.
Additionally, healthcare plans with effective dates that begin on or after Sept. 23, 2010 may no longer set lifetime dollar limits on essential benefits. Healthcare reform legislation allows restricted annual dollar limits on essential benefits until 2014. The Secretary of the U.S. Health and Human Services will define restricted limits and essential benefits at a later date.
Employers with more than 200 employees must automatically enroll full-time employees as soon as they are eligible for healthcare coverage. Employees, however, may opt-out of coverage.
Does the new law require all employers to offer healthcare coverage?
Small businesses with fewer than 50 employees are not required to offer healthcare coverage. However, beginning in 2014, businesses with 50 or more employees that do not offer healthcare coverage and have at least one full-time employee who receives a federal tax credit to purchase health insurance on his or her own through an exchange must pay the federal government a penalty of $2,000 per employee. The law excludes the first 30 employees from this assessment.
Employers that do not provide coverage, have 50 or more employees, and have at least one full-time employee who receives a federal tax credit to purchase health insurance on his or her own through an exchange, will accrue a penalty that is the lesser of $3,000 per employee receiving a premium tax credit or $2,000 for each full-time employee, excluding the first 30 employees.
I own a small business and want to provide health insurance for my employees and their families. Are there subsidies or other assistance to help me afford to coverage?
Businesses that employ fewer than 25 employees, pay average annual wages of $50,000 per full-time employee, and pay at least half the cost of single coverage for employees may be eligible to receive a tax credit.
Employers with 10 or fewer employees that pay annual average wages of $25,000 or less per full-time employee per year may be eligible for up to a 35 percent tax credit in 2010.
In 2014, the tax credit for eligible small businesses increases to 50 percent of premiums paid, but will only be available to small employers who purchase coverage through an exchange.
Eligibility details are available from the Internal Revenue Service. You should review and discuss the full criteria with a tax professional to determine whether your business will qualify.
Can I keep the plan I currently offer my employees?
Yes, but there are certain rules that may apply. Plans in existence on March 23, 2010 are grandfathered and they do not have to comply with certain provisions of new healthcare reform laws unless an employer changes the healthcare plan. Federal officials released regulations on what grandfathering means, what changes groups can make to their healthcare plan without losing their status, and how it impacts customers and members.
My company provides health insurance coverage to our retirees. Will the new law make retiree coverage more affordable?
The new healthcare reform law creates a temporary retiree reinsurance program that will reimburse employers for qualifying retiree medical expenses. Employers can receive reimbursement for up to 80 percent of expenses between $15,000 and $90,000 per retiree. Retiree expenses of employees over age 55, but not yet eligible for Medicare will be eligible. Employers must submit claims to the Secretary of Health and Human Services for reimbursement. Details and directions about how employers can apply is on the Health and Human Services website.
Most of my employees work on a part-time basis. Am I still be required to offer insurance coverage?
Groups with 50 or more full-time employees (or equivalents of 50 full-time employees) are required to offer coverage or face a penalty. Part-time employees will count toward this threshold on a prorated basis based on the number of hours worked.
As an employer, what else do I need to know?
There are many implications for employers to consider as they work to enact reform. The Blue Cross Blue Shield Association prepared a handbook (PDF) for employers that may be helpful and you can also review the March 2012 PPACA updates.