Don't stop preparing just because you heard the word "delay"
December 21, 2013
We've heard the word "delay" several times since we've heard the word "passed" in relation to the Patient Protection and Affordable Care Act (PPACA) - the law most often called ACA or Obamacare.
Medicare cuts were delayed until after the election.
The Employer Mandate, which required businesses of 50 or more full-time equivalent employees to offer affordable health insurance or pay a penalty, was delayed until 2015.
Enforcement of several key pieces of eligibility for another year, relying on the honor system for individuals to report their income that subsidies will be based on. If the individual estimates incorrectly, the difference will be corrected through the next tax return.
The caps on out-of-pocket insurance costs have been delayed for one more year (now starting in 2015). By limiting the "worst case scenario" amount that you'll pay out-of-pocket in health expenses each year, which would likely cause many premiums to increase. Although many insurance companies are choosing to offer plans that follow the out-of-pocket limit rules in 2014 anyway.
Don't stop preparing just because you heard "delay":
Many people think that the entire law has been delayed, but it's only the specific parts listed above.
The individual requirement to have health insurance will start on-time on January 1, 2014, along with other key changes to individual and family policies.
You can qualify for tax subsidies based on income to help reduce monthly insurance premiums and out-of-pocket expenses like deductibles and copays.
You cannot be turned down or charged extra for pre-existing conditions, health history, gender, or how often you use your plan.
Pre-existing conditions and pregnancy are always covered.
Your children can be insured on your health plan until they are age 26.
You can shop in exchanges (like us!) to help reduce your costs and choose from a Platinum, Gold, Silver, Bronze, or Catastrophic plan sold by private insurance companies like Humana, BlueCross BlueShield, United Healthcare, and more.
Changes that affect Small Businesses will also begin in 2014:
ACA defines a Small Business as one with at least two but less than 50 full-time equivalent employees.
Small business are not required to offer affordable health coverage to employees.
If you are Self-Employed (business of one), then you are not considered an "employer" under ACA and can use the exchange to shop for low-cost individual and family policies.
Insurance companies cannot charge Small Businesses more based on size, gender, health conditions within the group, pre-exisiting conditions, claims, or profession.
Insurance companies also have to account for where all the premiums dollars go with limits on how much they can keep for administration and overhead costs and profit.
Small Businesses might qualify for a tax credit by offering certain business plans and meeting ACA criteria.
Why was the employer mandate delayed?
According to a study released by the Obama Administration, over half of Large Businesses (50 or more full-time employees) were not prepared for ACA changes, and that is why the Employer Mandate was delayed.
The Employer Mandate requires Large Businesses to offer health insurance to their employees or pay a penalty ($2,000 per employee per year with a wavier for the first 30 employees).
The plan also has to pass an Affordability Test for all employees. If it is deemed unaffordable for at least one employee who tries to use a tax subsidy to qualify for reduced premiums in the individual exchange, then the employer would be charged a penalty of $3,000 per employee per year for non-compliance.
So what should I do now?
Keep moving ahead. Don't stop preparing your Large Business for ACA changes just because you have another year before the penalties begin. Use the next year to partner with a private exchange (Ahem, AHIPE) who will make sure your plans are compliant, you are doing all the required calculations and reporting, and your plan passes the Affordability Test.
Do this in 2014 so you are ready for 2015, penalty-free.