The new year is usually a very busy time for small businesses…new marketing plans, new merchandise or services, regulatory changes, and year-end reviews all add to our already busy agendas. This year our plates are even more full because of provisions of the Affordable Care Act (ACA) that are being phased in for 2014.
A law that is comprised of more than 2,700 pages and 30,000 pages of regulations cannot possibly be summarized in one short article, but there are several pressing issues that every small business (2 – 50 employees) must address, one of which applies whether you offer group health insurance or not:
1. Mandatory Notices:
a. “New Health Insurance Marketplace Coverage Options and Your Health Coverage”
Every employer must provide all current employees and future new hires with this notice. It’s form No. OMB 1210-0149, http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf. The current version of the form states that it expires 12-31-2013 but it will be updated shortly. This notice informs your employees about the existence of the public marketplace and describes their options. There are two versions of the form, one for employers that provide group health insurance, one for those who do not.
b. “Summary of Benefits and Coverage (SBC)”
The SBC is an easy-to-understand, plain language document describing your health insurance plan that must be distributed to all participating employees. It is the employer’s responsibility to provide the SBC however nearly all insurance companies will provide this as a courtesy to the employer.
The summary must include the Coverage Period or plan year dates. The SBC must conform to the government’s guidelines. Each SBC must be accompanied by a uniform Glossary of Terms that provides clear definitions of plan features such as deductibles, copayments, and coinsurance. The SBC also includes examples of claims for commonly used services such as Having a Baby, and Managing Type 2 Diabetes. The claims examples illustrate the types of care usually provided for the medical condition, the costs of each type of service and then what the patient pays under the terms of the plan contained in the SBC.
2. Maximum 90-day Probation Period for New Hires or Newly Eligible Workers
Prior to 2014 employers had the discretion to impose probation periods for new hires, requiring them to work for a period of time before becoming eligible for group health insurance benefits. The most commonly chosen probation period required group health insurance coverage to begin on the first day of the month following 90 days of employment. In certain, high turnover industries employers required probation periods of up to 12 months. Under the ACA, as of January 1, 2014 or the renewal date of an employer’s group health insurance plan in 2014, the maximum probation period is limited to 90 days. In other words, group health insurance benefits may begin no later than the 91st day of employment for all new hires or for part-time employees who were previously ineligible who have changed their status to full-time.
3. Postponement of the SHOP Public Marketplace for One Year/Small Business Health Care
The SHOP, or Small Business Health Options Program, was to be a public marketplace for small businesses to purchase group health insurance coverage, much as individuals and families began doing on October 1, 2013. The SHOP has been postponed for one year. However, small employers are able to work directly with agents, brokers, or participating insurance companies to purchase SHOP coverage as they were intended to be able to do through the public marketplace.
Unlike personal and family health insurance plans there are no enrollment deadlines for plans through SHOP. Employers may begin these plans at any time. One major reason to consider the SHOP is that business owners are eligible for the Small Business Health Care Tax Credit, which, if all conditions are met, is a 50% credit (up from 35%) in 2014. The tax credit is only available if coverage is purchased through the SHOP.
4. If You Offer Group Health Insurance Coverage to Your Employees’ Families but do not
Contribute Toward the Cost Consider Changing your Group Plan to Employees Only
If you do not contribute to the cost of dependent coverage it will be much easier for your employees’ family members to qualify for subsidized health insurance premiums through the public marketplace if you amend your group plan to include employees only.
For additional information contact Health Insurance Express, Inc. at 480- 654-1200 or firstname.lastname@example.org.
Alan Leafman is a 25-year health insurance veteran and is the owner of Mesa-based Health Insurance Express, the Valley’s only health insurance superstore.