Starting in 2014, a small-group employer in Minnesota will no longer be defined by their revenue but rather by their number of employees; thus, small-group employers are now defined as having 2-50 employees. It is imperative that all employers falling into this category be prepared to fully participate in the most dramatic change to health care insurance since the 1965 enactment of Medicare. While beneficial that the government is attempting to provide affordable coverage to all Americans, there remain challenges in terms of rising healthcare costs, an aging population, and longer lifespans.
What do small business owners need to do to get ready by 2014?
As new rules and guidance have been adopted for health care reform, many employers are uncertain about their new responsibilities for:
• providing insurance to employees
• recording information for the government
• reporting it to the government
Small groups are not required to provide group health coverage for employees. If a small-group employer does choose to provide coverage, however, the employer must offer coverage to all of its eligible employees. Starting in 2014, the minimum hours per week one must work to be eligible for insurance coverage decreases to 30 hours per week.
When an auditor arrives at your door, you cannot reactively respond or feign ignorance; instead you need to be proactive and knowledgeable. Having a team of guides to help you through the process will give you just that, the knowledge to be proactive. Think of it as a tripod of support: A tax expert, one that is familiar with the requirements and the affordable coverage calculator; a legal advisor, to help advise you through the non-discrimination rules and the information that needs to be documented; and finally, the third leg in the tripod, an insurance broker; to help with plan design, recording, reporting and guidance in and out of the exchange.
The plans must also conform to the following changes:
More comprehensive benefits
All health plans will be required to cover a comprehensive package of items and services known as essential health benefits. These essential health benefits include services such as outpatient care, emergency services, mental health and substance abuse care, rehabilitation services and devices, and preventive care.
New health plans will be required to pay for a greater percentage of your health care costs
Your premiums will cover more benefits and services, and your out-of-pocket expenses – such as co-pays and deductibles – will be capped starting in 2014. Under the ACA, qualified health plans must cover a minimum of sixty-percent of average health care costs. In addition, all small group plans will be categorized based on one of four actuarial value levels, known as “metal levels”: bronze, silver, gold or platinum, with platinum plans offering the richest level of benefits.
Deductibles for plans in the small-group market are limited to $2,000 for individual coverage and $4,000 for family coverage. The out-of-pocket maximums for 2014 are $6,350 for self-only and $12,700 for family coverage. The out-of-pocket maximum will include the plan deductible, co-insurance and co-pays for services covered by the plan, including pharmacy co-pays. To meet actuarial value limits, a plan may have a higher deductible.
90-day probationary waiting period
Eligibility waiting periods for group health insurance cannot exceed 90 days.
There are three key questions that must be answered before the end of October:
• How does community rating affect your business?
• What penalty mode are you in with your current group carrier?
• When is your renewal date?
Use your team to set a benefits strategy, one that will work for your business and your employees. Remember responding reactively or feigning ignorance will not give you a pass from getting fines and penalties.
Rob Rieckenberg, LTCP