The Affordable Care Act Compliance
Over the past several years, the health insurance industry has faced many new rules and regulations under the Affordable Care Act, some which have been delayed or rolled back many times. As a result, employers are having a difficult time understanding and interpreting the law. As group insurance experts, the consultants of Eichberg Associates, Inc. strive to stay knowledgeable in all state and federal laws concerning employee benefits, and we are mindful of new rules and regulations as they are established, including those of the Affordable Care Act.
How do we ensure employers comply with the ACA?
- Design benefits to meet the requirements of the ACA
- Assist with ACA reporting
- Provide employer training and education on complying with the ACA.
- Handle all employee forms and notices, and more
Highlights of the Affordable Care Act
Save on your premiums
Individuals and Small Businesses may be eligible for a tax credit under ACA healthcare reform laws. Thus, the credit is applied as a discount on your monthly insurance premium. Accordingly, to see if you are eligible for a tax credit, please use the Subsidy Calculator provided by the Health Insurance Marketplace. Or, if you are a business, use the Small Business Tax Credit Calculator provided by the Health Insurance Marketplace. Benefits must be purchase through the Health Insurance Marketplace to secure the tax credit.
Avoid tax penalties
EMPLOYERS: Employers who have more than 50 full-time equivalent employees must offer their employees benefits that pay for 60% of the minimum essential benefits. Employers will incur a penalty for non-compliance. The penalty amount is $2,140 per year, multiplied by the number of full-time employees which excludes the first 30 employees. The penalty is increased each year by the growth in insurance premiums. Employers also incur a penalty when at least one of their employees receives a premium tax credit in the Health Insurance Marketplace (Exchange).
INDIVIDUALS: From 2014 through 2018, Individuals were subject to a tax penalty if they did not have qualifying health insurance. Note, this mandate was repealed for 2019 and beyond. Following is information on the Individual Mandate prior to being repealed. The tax penalty is $695 for each adult, with an additional $347.50 for each child, or a maximum family penalty of 2.5% of income, or three times the adult penalty, which is $2,085 (whichever is greater). Penalties are applied on your annual tax return.
Underwriting guidelines of the ACA
- There is no longer a pre-existing condition clause. In other words, insurance companies cannot increase rates or deny coverage because of a pre-existing condition.
- Your dependents can remain on your policy until they turn 26 years old.
- Insurance companies cannot consider gender when setting rates.
- Employer renewals must be based on the same rates as new business.
- The waiting period for employer benefits should not exceed 90 days.
You may be subject to a tax penalty if you do not comply with the “Essential Benefits” of ACA.
Specifically, to be in full compliance with the law, your insurance policy must cover at least 60% of the costs of the following essential benefits.
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Prescription Drugs
- Mental health and Substance Abuse disorder services
- Rehabilitative and habilitative services and devices
- Pediatric services, including oral and vision care
- Preventive and wellness services, and chronic disease management