Affordable Care Act (ACA)
The ACA is coming and becoming more informed is critical to everyone that has insurance.
The government has postponed until 2015 the implementation of the employer mandate under the Affordable Care Act (ACA) and the Small Business Health Options Program (SHOP) Exchanges.
The postponement allows the government to simplify the reporting requirements and gives employers more time to figure out how they want to adjust their health insurance coverage to the ACA environment. Consequently, the following is brief summary of the ACA as it relates to the Individual Health Insurance Exchanges, terms and dates that you should know.
When Does this happen (Dates to Know)?
- October 1, 2013, Open Enrollment for the Exchanges begins and continues through March 31, 2014
- December 15, 2013, Final day to purchase health care insurance coverage for a January 1, 2014 effective date.
- January 1, 2014, health insurance exchanges plans coverage begins
- March 31, 2014 Final day for open enrollment through the health insurance exchanges
What type of Plans will be offered?
The final plans and rates will not be available until the middle to end of September, however the Exchanges will have a minimum of four benefit categories of plans plus a separate catastrophic plan to be offered.
Can I get by coverage free or at reduced cost?
Low income individuals and families above 100% and up to 400% of the federal poverty level will receive federal subsidies on a sliding scale if they choose to purchase insurance via an exchange.
Do I have to get coverage?
Yes, it's a mandate, not a suggestion which requires U.S. citizens and legal residents to have qualifying health coverage or pay a penalty. The penalty will be phased-in according to the following schedule: $95 in 2014, $325 in 2015, and $695 in 2016 or the flat fee or 1.0% of taxable income in 2014, 2.0% of taxable income in 2015, and 2.5% of taxable income in 2016. Beginning after 2016, the penalty will be increased annually by the cost-of-living adjustment. Exemptions will be available.
ACA Additional Information
EMPLOYER MANDATE COMMUNICATION
The ACA employer mandate has been delayed, however employers still have the requirement to provide a notice to employees about health insurance coverage that may be available through a public exchange.
Employers must provide a notice to each employee, regardless of plan enrollment status or part-time or full-time status, by Oct. 1. The notice must be provided automatically, free of charge, and written in language that the average employee can understand. It may be provided by first class mail or electronically, if the requirements of the U.S. Department of Labor’s electronic disclosures safe harbor are met. It must also be provided to new hires — for 2014, the DOL will consider a notice delivered timely to a new employee if it’s provided within 14 days of the start date.
The notice must inform each employee of three things:
- The existence of state or federal health insurance exchanges.
- If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60%, then the employee may be eligible for a federal premium tax credit if the employee purchases a qualified health plan through an exchange.
- If the employee purchases a qualified health plan through an exchange, then the employee may lose the employer contribution to any health benefits plan offered by the employer; also, all or a portion of such contribution may be excludable from income for federal income tax purposes.
The DOL has published model notices that can be used for Employers Who Offer Health Plans, and one for Employers that Do Not Offer Health Plans.