Health Insurance: Coverage You Need at a Price You Can Afford
Employee healthcare coverage is a major component in a job offering and benefits package used to attract and retain good employees. There are numerous laws and policies in place to insure employees, and sorting through them all can be overwhelming. The complexity of ACA reporting alone is one reason many businesses choose to outsource their Human Resources and Payroll functions to a partner company that specializes in ACA Compliance, ACA Reporting, and other Human Resources-related issues and policies.
Breaking It Down: ACA Explained
The Patient Protection and Affordable Care Act was enacted in 2010 and (mostly) implemented in 2014, creating a radical regulatory overhaul of healthcare in the U.S. Along with the reform came a whole lot of confusion when navigating the ins and outs of the new law. Insurance was often already a headache for industries of all sizes, and the Affordable Care Act (ACA) only increased the complexity.
Often referred to as the ACA, Healthcare Reform, or the Affordable Care Act, the law allows consumers to compare insurance plans and mandates ACA reporting from employers to ensure the option of coverage. That is very helpful to the self-employed, the unemployed, workers whose employers do not offer healthcare, those whose salary is too high to qualify for Medicaid and those who are too young to have Medicare. The Affordable Care Act requires new insurance plans to offer the following health benefits, deemed “essential” to employee healthcare coverage:
- Preventive Care and Wellness Visits– ACA compliance charges insurance plans to make preventive care free of charge, meaning no copay is required for the fifty procedures categorized as preventive care. These include women’s wellness, shots and screening tests.
- Maternity and Newborn Care– From contraception to newborn wellness, these procedures fall within the parameters of preventive care and are therefore not allowed to have a copay or any other fee.
- Mental and Behavioral Treatments– Drug, alcohol and other substance abuse treatments, including rehab, are covered by the ACA.
- Required Coverage for Equipment Needed to Treat a Chronic Disease– For ACA Compliance, insurance companies are required to cover services and devices needed for those with injuries, disabilities or other chronic conditions.
- Lab Tests– If a physician requires a test to diagnose an illness, the insurance plan is charged with covering the cost of that test.
- Pediatric Care– Pediatric care for children is required to be covered by insurance plans, as well as blood screenings, immunizations and vision care.
- Prescriptions– The ACA requires any out-of-pocket expenses to count toward a patient’s deductible, and insurance plans must cover at least one drug in each United States Pharmacopeia (USP) category and class. Many preventive medications are also covered now.
- Outpatient Care– Many treatments are covered under the ACA for both inpatient and outpatient care.
- E.R. Services– ACA plans do not charge any additional fees for going to an emergency room outside of the insurance network.
- Hospitalization– Insurance agencies cannot charge a patient more for going to an E.R. outside of their network. The ACA also prohibits insurance agencies from denying patients with pre-existing conditions or dropping plans for those who fall ill. Parents may also add dependents up to 26 years old to their plan.
So, What Does All of This Mean to Your Business?
When it comes to selecting employee benefits, it is necessary to find a plan that suits your specific business needs.
The Small Business Health Options Program (SHOP), also known as health insurance exchanges, allows employers to compare prices and coverage of different plans, thereby simplifying the process of purchasing health insurance for small businesses. If at least one of your employees were enrolled in a health plan on March 23, 2010, then your company’s plan can be considered “grandfathered” in and is therefore exempt to the mandated changes. Plans created after March of 2010 are required to have those ten essential health benefits covered.
As for employers, provider networks have shrunk drastically. This is due to the additional covered services, whereby insurance payers are spending more on the informed populations and hospitals are spending less. This causes issues with physician referrals. The major insurance payers are merging into two in order to keep up with the costs of coverage. Premiums and other insurance rates continue to rise as the available insurance options narrow to account for the additional twenty million covered by the ACA.
The size of your business is a huge factor when considering insurance plans. Businesses with over 50 employees are charged a fee for not providing health insurance to their employees, but many find that paying the fee is more economical than paying for insurance. If a small business has 50 employees or more, they are required to provide health insurance or they will be taxed $2000 for every employee after the first thirty. Small businesses (those with fewer than 26 employees) that do offer employee health insurance, however, are eligible for a tax credit of 50% of the cost of ACA plans and if they offer insurance to early retirees, they can qualify for federal financial assistance. Business owners may deduct up to 100% of qualifying group benefit plan premiums.
The ACA also requires businesses to report the statistics on their insurance coverage. ACA reporting is required for businesses with 50 or more full-time employees, self-insuring employers of any size and any person who provides minimum essential coverage to an individual (including employer-sponsored coverage). Insurance providers are required to report to the IRS annually and furnish statements to individuals for the previous year. ACA reporting must include provider information, as well as each individual covered under the policy and the months they were enrolled or qualified for benefits.
Due to the ever-increasing costs of employee health insurance, many employers offset the expenses by offering a high deductible plan with supplemental insurance plans. The combined costs of several supplemental policies can often add up to far less than traditional group premiums.
The complex regulations of the Affordable Care Act are still fluctuating. Repeals are an item of constant debate in the political spectrum. The ACA has other provisions that are still being phased in, while the law is still being fought within the halls of Congress.
With the various requirements and reporting involved with the ever-changing spectrum of employee healthcare coverage, businesses can be comforted in the knowledge that HR outsourcing agencies are available to stay on top of ACA compliance and reporting. If you’d like more information on employee health insurance policies or benefits administration packages, reach out to Maverick HCM today.