The ACA was signed into law on March 23, 2010. The passage of the Affordable Care Act has had a significant impact nationwide and in Texas. With an estimated 5 million Texans lacking health insurance coverage, the ACA is seen as a landmark piece of legislation that will help to close this gap and improve access to healthcare across the nation. The new law requires all Americans to purchase health care or pay a penalty for not doing so. This article outlines what you need to know about these changes, including information on how they may affect you. You’ll also find answers to important questions about cost-sharing subsidies and Medicaid eligibility under the new act, along with guidelines for employers who are looking for ways to offer affordable coverage options for their employees.
Business and ACA reporting requirements
The Affordable Care Act (ACA) requires employers to file a return and provide certain statements to employees concerning the health care coverage it offered them for each calendar year. This means that your employer must file one of the forms below in January of each year. Fortunately, some companies offer all inclusive payroll software that will automatically calculate and report ACA data to the IRS and employees. Employers with 50 or more full-time employees (including full-time equivalent employees, such as part-time workers) will be required to file a Return/Report of Employee Health Insurance Information for each year they offer health care coverage.
Every employer is required to provide their employees with a written statement showing the cost of their share of any medical plan. The reporting requirements are separate from the information you receive when enrolling in your company’s health insurance plan.
What are the benefits of the ACA?
The additional requirements of the ACA are intended to make it easier for all Americans, especially small business owners and their employees, to take advantage of the financial benefits of health coverage. The law allows you to choose from a wider range of health care plans, including qualified high-deductible health plans that have lower premiums but higher deductibles. You can also purchase individual policies in new state-based marketplaces called exchanges, which are tailored for your specific health insurance needs. These options will help relieve some of the burdens on your wallet when it comes to paying out-of-pocket costs, so you’ll be able to enjoy greater peace of mind when enjoying time with family and friends or exploring new opportunities in life.
How do these changes impact your business?
Most importantly, the ACA requires employers to offer health insurance coverage for all hired employees working an average of 30 hours per week or more. It also mandates that businesses pay a penalty if they don’t offer coverage or have one of their full-time workers apply for federal assistance to purchase health care on their own. This penalty has been over $2,500 per employee for not being offered coverage. For example, say you have two employees who work 40 hours per week. You then must either provide them with health care through your company’s plan or pay a penalty each year the employees are without the benefit of employer-sponsored medical care (which is often much less expensive than having them go without).
What are the minimum essential benefits?
The ACA outlines 10 core categories of essential health benefits which must be included in every plan offered through a state exchange or marketplace:
- outpatient care (including doctor visits)
- emergency services
- hospitalization
- maternity and newborn care
- mental health, and substance use disorder services (including behavioral health treatment
- prescription drugs
- rehabilitative/habilitative services, and devices (help people maintain or improve their functional abilities)
- laboratory services
- preventive care (including wellness visits, screenings for various cancers, and other tests to check your overall health)
- pediatric services including oral and vision care.
What is the Individual Mandate?
There are also new consumer protections that go into effect under the ACA. For example, now you can’t be denied coverage or turned down for a medical condition as long as you keep paying your premiums. The ACA also prohibits changes in rates based on pre-existing conditions starting. There are standard caps on out-of-pocket spending by consumers each year, so if your employer’s plan doesn’t have a deductible, you can’t be charged more in health care expenses in a given year even if your child breaks his leg at school.
What information do employees need to report?
As an employee, the new ACA reporting requirements mean that you will receive a copy of your company’s plan documents and enrollment materials when it comes time for open enrollment. In addition to these material changes, here is what else you should keep track of throughout the year:
Initial and ongoing eligibility
Every plan must determine eligibility for coverage based on your job status, employment start date, and hours you work either monthly or annually.
Enrollment
You should receive a notice if you’re no longer eligible to enroll in the company’s health care plan (often due to changes like losing your job, getting divorced, or reaching an annual limit for benefits). If this happens, there are protections under the ACA that allow you to keep your coverage even though you can no longer contribute to the cost of premiums. You may also qualify for a special enrollment period during which time you can enroll outside of open enrollment (such as when you get married, have a child, or move out of state) provided there isn’t a change in your life that has made you ineligible.
Re-enrollment
If you are eligible for health care benefits when you leave your job or if you are not offered coverage by your company even though they don’t meet the ACA minimum requirements, there are special circumstances when you can enroll outside of open enrollment, so plan accordingly.
Documentation
Keep track of all requests for medical, dental, and vision services provided through your company’s health care plan because every expense must comply with the terms of the plan, or it may be considered non-covered or out-of-network could result in higher out-of-pocket costs or denial of services.
Appeals
If you are denied coverage for a medical service by your company’s health care plan, you have the right to appeal that decision and if it is ruled in your favor, you may be reimbursed under the terms of the plan.
As an employer, ACA reporting requirements mean keeping track of all vital information about eligibility areas such as age, job status, and enrollment deadlines, so there are no surprises when it comes time to open up enrollment.
