PCOC - Spring 2014 - (Page 24)

insurance Small Employer Responsibilities Under Health Care Reform Act By Lisa Klinger, J.D. and Guy Wallrath - The Leavitt Group, with Paul Lindsay - PCOC Insurance Program Director - Leavitt Affinity It is hard to believe that 2014 is here. For the insurance world, this is a big year of compliance and coverage, as you have seen and heard. The Affordable Care Act (ACA) has continued to be hotly debated and discussed since our last article in August. With this in mind, I asked Lisa and Guy, our Leavitt Benefits experts, to give you an update on this challenging government mandate.  As you read, remember elements of the ACA change quickly and seemingly daily.  It is critical to stay away from the hyperbole surrounding the initiative and get the facts. Stay current on the implementation of the Act as pertains to your company and its employees. We are here to help. Introduction The Affordable Care Act (ACA) imposes certain obligations on "large" employers and not on "small" employers, but the threshold for "large" employer status is defined differently for various provisions in the ACA. A "small" employer with fewer than 50 full-time employees might actually turn out to be a large employer if it is part of a "controlled group" or an "affiliated service group" or if it hires so many part-time and seasonal employees that it actually has more than 50 "full-time equivalents."  Throughout the upcoming months, you hear more about tools, calculators, and spreadsheets available to employers to calculate the full-time equivalent count, since this will factor into the penalties large employers will face in 2015. Employer Shared Responsibility Currently, large employers will face potential penalties in 2015 if they do not offer affordable and minimum essential coverage to their employees. Small employers are not and will not be subject to penalties under the ACA, even if they do not offer or provide health insurance to their employees. For this provision, "small" employers are defined as those with fewer than 50 full-time employees or "full-time equivalent" employees (FTEs). What Happened in December 2013? The carriers all provided employers with the opportunity to participate in an "Early Renewal."  This gave employers the chance to lock in their benefit design and their rating factors in December of 2013. This meant the health insurance policy would not change until Dec. 1, 2014, giving small employer the chance to delay many of the plan and rate changes until the end of 2014.  If you did not participate in this early renewal process, your plan and rates have to comply with the new rules that went into effect as of Jan. 1, 2014.  What are the New Plans for 2014? In 2014, coverage that is offered to small employers must meet specified "actuarial values."  The actuarial value of a plan is a measure of what percentage of allowable benefits under the plan will be paid by the plan and what percentage will be paid by the participant. The actuarial value is a general indicator of a plan's payment generosity and is intended to help consumers more easily compare health insurance options. Under the ACA, the www.pcoc.org / Spring 2014 24 percentage a plan pays toward the total "actuarial" value of a plan is expressed in levels, called "metal levels." The four metal levels are: Bronze: Plan pays 60%; participant pays 40% Silver: Plan pays 70%; participant pays 30% Gold: Plan pays 80%; participant pays 20% Platinum: Plan pays 90%; participant pays 10% All non-grandfathered health insurance policies and plans must meet at least the bronze 60 percent level. This is called "minimum value" and applies to all plans in the large and small group market as well as to individual policies. Coverage Options for Individuals In the past, employer sponsored group coverage was one of the few ways individuals could access guarantee-issue, no questions asked, health insurance. With the requirement for each individual to carry insurance, the ACA provided for the creation of Health Marketplaces, or Exchanges, by State or through the Federal Exchange. California has their own, which is called "Covered California." Depending on the individual's household income, many will qualify for subsidies when purchasing coverage in the Exchange.  If an individual makes anywhere from about 133 to 400 percent of the http://www.pcoc.org

Table of Contents for the Digital Edition of PCOC - Spring 2014

President’s Message
Martyn’s Corner
Beyond the Bugs: A Conversation with Michael F. Potter
Equipment Financing & Leasing: An Important Tool for Business Growth
Maximize Our Presence at PCOC’s 2014 Legislative Days
Federal Update
Small Employer Responsibilities Under Health Care Reform Act
Happy Days are Here Again
Corky’s Pest Control
Index to Advertisers
Advertiser.com

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