The Affordable Care Act, more commonly referred to as Obamacare, sets forth regulations that transformed the insurance industry in America. They change everything and as an employer, you need to be on top of your insurance game to ensure you’re compliant. Failure to adhere to ACA requirements, reporting, and compliance can mean big fines for your business. Let us help make sure you are ACA compliant.
What is the ACA? The Affordable Care Act applies to all new individual major medical policies sold after January 1, 2014.
What are the requirements: According to the law, any ACA compliant policy must include coverage for the ten essential benefits with no lifetime or annual benefit maximums. It also must adhere to the consumer protections, also known as the patient bill of rights.
What are the essential benefits required by ACA?
All ACA-approved insurance plans must include these ten essential benefits:
- ambulatory services
- emergency services
- maternity and newborn care
- mental health and substance abuse treatment
- prescription drugs
- lab tests
- chronic disease management, “well” services and preventive services
- pediatric services for children, including dental and vision care
- rehabilitative and “habilitative” services
What are the consumer protections required by ACA?
Consumer protections are commonly referred to as a patient’s bill of rights. They are touted for ensuring that all consumers are treated fairly in the insurance marketplace. According to the ACA, all policies must adhere to the following consumer protections:
- Eliminating unreasonable rate hikes
- Allowing consumers to choose their own doctor from the insurance network.
- Keeping those under 26 eligible for coverage under their parent’s health plan.
- Eliminating lifetime coverage limits
- Ensuring that premium dollars are spent primarily on health care – not administrative costs.
- Removal of annual dollar limits on coverage
- Eliminating pre-existing condition exclusions for children under 19.
- Removing insurance barriers to emergency services
- Covering preventative care
- Eliminating arbitrary withdrawal of coverage
- Guaranteeing your right to appeal any denial of payment
What are the employer ACA responsibilities?
Any employer who has 50 or more full-time employees on average is subject to the ACA annual reporting requirements, even if they do not sponsor a fully-insured health plan. The reporting requirements require a 1095-C be given to each employee and filed with the IRS. Although filling out a form and sending it in seems simple enough, the forms themselves can be very complicated. There is a system of codes that employers must know and use to specify the employees’ employment status and health coverage.
What are the ACA penalties?
The government has a “play or pay” provision, which means that if the employer is not in compliance, they are subject to significant penalties. If they fail to offer minimum essential coverage, the penalty is currently over $2,000 per employee. The penalty for coverage offered that is deemed “unaffordable” is over $3,000 per employee.
Given the steep reporting requirements, complicated forms, and stiff penalties, it’s no surprise that many small businesses look to outsource their insurance and human management requirements.
Magellan HCM is a full-service ACA compliance team that makes sense of the complex requirements for you. Give us a call today and learn how Magellan HCM can take care of you, so you can focus on your business.