The Affordable Care Act, or ACA, is a compre-hensive reform of how all Americans access and pay for health care. It affects every business and individual in the country. And although small employers (with less than 50 full-time employees), like physician practices, avoid the costly “pay-or-play” mandate, small groups should pay special attention to the following provisions of the ACA.
90-day waiting period limit – The ACA institutes a 90-day maximum waiting period on ALL group health plans for plan years beginning on or after Jan. 1, 2014. The guidance for this defines the 90 days as specifically 90 days; this limit does not exclude holidays or weekends. It may not be the first of the month after 90 days. In other words, coverage must start no later than day 91, counting from an employee’s hire date.
30-hour per week threshold for full-time employees – The ACA defines a full-time employee as one who works 30 hours per week – per month – on average.
Maximum out-of-pocket limitations – ALL employer-sponsored health plans must adhere to maximum out-of-pocket limits of $6,350 single and $12,700 family in 2014. These limits are indexed to Health Savings Account contribution limits and are set to rise every year.
Affordability and minimum value (MV) – These two terms are specifically mentioned in one of the “pay-or-play” penalties applicable to large group employers. A plan is considered affordable if an employee’s required contribution for self-only coverage is no more than 9.5 percent of household income.
A plan meets the minimum value standard if it is designed to pay at least 60 percent of the total cost of medical services for a standard population. Both tests are still relevant to small group health insurance, as the availability of a plan that meets both tests precludes employees from receiving tax credits from the marketplace, no matter the size of the employer.
Non-discrimination rule – All non-grandfathered, fully insured plans will be subject to nondis-crimination rules similar to those currently in place for self-funded arrangements. At this time, the Internal Revenue Service has issued an indefinite delay on enforcement of this rule.
In addition, small group, non-grandfathered plans cannot exclude individuals with pre-existing conditions, must not place limits on annual or lifetime coverage amounts, and must adhere to other important plan reforms in place or phasing in for the 2014 renewal.
As guidance on the interpretation of the law continues to be released and certain provisions are delayed, employers and individuals should remain attentive to the ACA and its impact.
*This information was provided by Kyle Riddle, GBA, Compliance Specialist, Brown & Brown of Indiana, LLC, one of the ISMA's contracted insurance agencies.