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What do PPACA and ACA mean?
These abbreviations refer to the comprehensive health care reform law enacted in March of 2010. PPACA refers to the Patient Protection and Affordable Care Act that was signed into law on March 23, 2010. It was amended by the Health Care and Education Reconciliation Act on March 30, 2010. The name Affordable Care Act (ACA) refers to the final, amended version of the law.
How does the change to keep young adults on their parent’s coverage work?
Any group or individual health plan that offers dependent coverage has to provide coverage until the dependent turns age 26. It doesn’t matter whether the dependent is in school or married. (Exception: Until 2014, grandfathered group plans can exclude dependents from coverage if they’re eligible to enroll in an employer-sponsored plan other than their parent’s plan.)
Will everyone have to buy health insurance?
Starting in 2014, most individuals will be required to obtain health insurance or pay a fee. Most employers will be required to provide health insurance to their employees or pay a penalty. Some groups will be exempt from these requirements.
What’s a health insurance exchange?
Beginning in 2014, health insurance exchanges will provide a central place for individuals and small businesses to purchase and enroll in health insurance. They’ll offer information and tools for consumers to compare and understand their health plan options. States are expected to set up the exchanges, though the federal government will set them up if a state doesn’t.
With the changes brought by health care reform, how is my preventive care covered?
Through comprehensive wellness coverage, Health Alliance covers yearly doctor visits, tests, screenings and vaccines—even when you’re healthy. For more details on the preventive services included in your wellness benefit, view our Using Your Preventive Care Benefits brochure. (Grandfathered plans are not required to provide this coverage and the preventive benefits these plans provide may be different. If you’re a member of a grandfathered plan, you should receive a written notice to this effect.)
Will HealthAlliance/HCH provide the required notice to our employees that our plan is a grandfathered plan, or are we responsible for notification?
Rules state that the plan or issuer must provide the model grandfathered notice in any plan materials that describe benefits provided by the plan. Just as Health Alliance and HCH provide member materials today, we’ll distribute this notice for our fully insured plans. For self-funded plans, account representatives will provide the notice to employers to distribute to their employees with renewal materials.
Our plan doesn’t have vision coverage for employees and dependents. Will that be a requirement in the future?
The ACA does not require that vision and dental coverage be included under the medical benefits of a plan.
When will the employer penalties begin?
The employer penalty for failure to provide coverage begins in 2014.
Do we have to provide insurance for our part-time employees?
No.
Could you explain again the $3,000 penalty for employers?
Employers subject to this penalty include those that employ more than 50 full-time employees and that provide coverage to an employee who receives a premium tax credit. The penalty is $3,000 annually, multiplied by the number of full-time employees that receive a premium tax credit.
For example, Employer X offers health coverage to its 100 full-time employees. Twenty employees receive a premium tax credit for the year for enrolling in a plan through the exchange. For each employee receiving a tax credit, Employer X owes $3,000 ($3,000 multiplied by 20), for a total penalty of $60,000 annually. The penalty is assessed on a monthly basis.
The maximum penalty Employer X can pay in a year is capped at the penalty amount that would be assessed for a failure to provide coverage. This amount is $2,000 per full-time employee with no penalty for the first 30 employees for Employer X, $2,000 x 70 (100 - 30), or $140,000.
Because the calculated penalty of $60,000 is less than the maximum amount of $140,000, the employer would pay the lesser amount, $60,000.
Will you be able to get a tax credit, if you purchase a plan outside the exchange?
Currently, it doesn’t appear the ACA supports premium tax credits on plans purchased outside the exchange. Still, further rulemaking is expected.
I know there can’t be a dollar limit on essential benefits. Can there be a day limit on an essential benefit?
Currently, yes. Rules do not restrict day and/or visit limits.
Do you see annual open enrollment as a requirement in the future? We currently don’t have annual open enrollment at our organization.
It doesn’t appear the ACA requires plans to provide an annual open enrollment period. However, for large employers, health care reform requires an automatic enrollment of new employees and a continued enrollment of current employees. For purposes of the automatic enrollment provision, a large employer is defined as an employer with more than 200 employees. Future rulemaking is expected to define this further, including an effective date.
If a group maintains grandfathered status, does it have to implement the dependent coverage until age 26 at renewal?
Yes. However, until 2014, grandfathered group plans may exclude from coverage a dependent who’s eligible to enroll in an employer-sponsored plan (whether as a full- or part-time employee) other than their parent’s plan.
For example, Steve works for River Elementary and is covered under the company’s grandfathered plan. Steve’s dependent, Ann, works for JR Retail, and she’s eligible to enroll in the health plan offered by JR Retail. That means River Elementary does not have to cover Ann as a dependent.