Tag Archive for: Benefits

Opt-in vs Opt-out Health Insurance: What you Need to know

Large employers offering employees health benefits need to choose between opting all employees in automatically, encouraging them to opt-in, or making them opt out of health benefits. When it comes to health insurance, opting in and out plays a key part in enrollment. Using the right strategy can help you as a large employer provides coverage for your employees. 

 

Health insurance for employees promotes a healthier workforce because they partake in preventative care, which in turn creates more productive employees with higher morale. Health insurance keeps employers healthy through annual checkups, vaccinations, lab work, screenings, and immunizations. 

Increased employee morale because of benefits will influence your company positively because it: 

  • Increases teamwork across the organization 
  • Causes better retention of employees 
  • Increases productivity

The American Hospital Association reports, “health insurance facilitates access to care and is associated with lower death rates, better health outcomes, and improved productivity.” 

When employee health is supported, they are able to show up for work and be more productive. This reduces the amount you need to spend on paid time off, employee coverage, or hiring new employees. 

The Society for Human Resources Management found that it costs at least over $4,000 to hire and train a new employee, and can take up to 52 days to fill that position. Companies with 0-500 employees can expect to spend over $7,500 in hiring costs. Hiring a new employee to replace one who fell ill due to preventable illness because of lack of insurance is a costly and unnecessary expense. 

Opting in vs Opting out 

Offering employee benefits produces numerous positive outcomes for your company and your company’s employees. With this in mind, how does opting in and opting out of health insurance influence you as an employer?   

Opting in is the positive action taken to subscribe or enroll in health insurance whereas opting out requires that the employee automatically is signed up for health insurance, but they need to be able to unenroll just as easily. Persons opting in must check boxes or fill out information to agree to enroll. Persons opting out must uncheck or fill out information to end enrollment. 

 

A powerful example of the power of opting in or out comes from organ donations. European countries follow opting out options for organ donations. In order to indicate you do not want to donate organs in case of an accident, you must opt-out. Nearly all European countries with opt-out organ donation policies have nearly 100% organ donation participation among their people.

 

On the other hand, America and other countries that facilitate an opt-in policy with organ donation reap vastly different results.  Countries with opt-in policies have on average about 15% participation. 

 

The Association for Psychological Science found that “studies show that relying on inaction yields better results.”  

The psychology behind opting in and opting out

Psychologically, removing obstacles that make the desired behavior as easy as possible and obstacles in the way of unwanted behavior results in a performance of that desired behavior. Depending on the desired outcome, people will choose to opt-in or opt-out based on whichever action or option is easier.

 

The father of Social Psychology, Kurt Lewin, said, “make the actions you want to encourage easier, akin to moving downhill; and make the actions you want to discourage more difficult, aking to moving uphill” 

How does this influence your company? 

Employers encouraging employee health benefits because of their numerous positive rewards should consider using an opt-out method for higher retention of group health insurance.  

 

Opting out policies to consider are: 

  • “Opt-out arrangements should be offered under a Section 125 cafeteria plan to avoid unfavorable employee taxation.
  • The Affordable Care Act will consider certain opt-out payments as part of the employee’s premium for determining affordability under the act.
  • Unconditional opt-out
    • Conditional opt-out 
    • Eligible opt-out
  • Opt-out incentives should be offered to all eligible employees.
  • Federal and state law may consider opting out incentives to be wages for overtime pay.” 

 

At SBMA, we offer affordable benefits for everyday people that are compliant with the Affordable Care Act. It covers medical, ancillary, worksite, and virtual health. 

Read about why health insurance is important for your business here.

Why Innovative Hia is the Gold Standard of Service

At Innovative Hia, we serve employers who want to offer their employees affordable benefits. We simplify the complexity of providing those benefits and ensure compliance with the Affordable Care Act.

We’re in the business of providing health care to everyday people, ensuring peace of mind through trust and transparency.

We pride ourselves on our personal service, speed of  implementation, and innovative approach to providing benefits coverage.

Today, we’d like to chat a bit more about the exceptional service we provide and why SBMA is, therefore, the gold standard of customer service for minimum essential coverage (MEC) insurance providers.

(Hint: Our one-stop-shop benefits portal plays a large role in our successful customer service efforts!)

Let’s dive in.

WHAT PROBLEM DO WE SOLVE?

With us, you get peace of mind, security, and the insurance your employees want at a price everyone can afford. Providing affordable benefits to your employees not only ensures you employees remain motivated and excited about work, but they also ensure you remain in compliance with the ACA.

WHAT MAKES INNOVATIVE HIA BENEFITS DIFFERENT?

Our customer service is what sets us apart. We work when you work. Our carrier partners have given us exclusive offerings to complement our medical plans, giving you the best possible price. Our quick execution and advanced approach to benefit coverage is second to none.

HOW INNOVATIVE HIA SUPPORTS THE ONBOARDING AND OFFBOARDING PROCESSES

At SBMA, we support businesses beyond providing affordable minimum essential coverage (MEC). We are proud to support the employee onboarding process so your human resources (HR) teams have more time to focus on the daily tasks that keep your business running.

This is why we offer a complete insurance solution that covers:

  • Implementation
  • Enrollment
  • Administration, and
  • Reporting

Our benefits professionals are fully equipped to support onboarding and offboarding procedures to eliminate the hassle for businesses.

How? Using our benefits portal.

OUR BENEFITS PORTAL

Employee benefits administration can be a pain for any HR department. At SBMA, we aim to simplify the process by giving you access to everything you need in one place.

Our one-stop-shop portal is proprietary and unlike any other. Our portal grants you access to all of the tools necessary to support a new hire (from beginning to end).

We eliminate the headache of unnecessary paperwork with benefits management portal access. You can:

  • Make plan changes
  • Order ID cards
  • Check a claim status online
  • Track onboarding and offboarding
  • And more

Resources are only a click away.

Besides creating a seamless onboarding process with our all-in-one portal, we also provide video tutorials for our partners. These resources provide instructions that assist navigation through the portal.

Read on to view our enrollment portal walkthrough.

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Full-Time vs Part-Time Benefits: Why It Matters

Employers need to make sure they are compliant with the Affordable Care Act (ACA) and the employer shared responsibility regulations, also known as “the employer mandate” or ALE. This means that employers must consider many factors when deciding between offering full-time vs part-time benefits, including the costs associated with providing health coverage and other employee benefits.

In this blog we’ll explore the differences between full-time (FT) and part-time (PT) benefits and why it matters for business owners.  

What is the ACA’s Employer Mandate?

The Affordable Care Act’s (ACA) Employer Mandate is a federal law requiring businesses with 50 or more full-time employees to provide health insurance coverage to those employees, or face penalties. The ACA requires employers to offer minimum essential coverage that meets certain affordability and value requirements. Employers must also comply with certain reporting requirements so the government can keep track of employer compliance with the law.

The Employer Mandate is one of the most important elements of the ACA, as it helps ensure that more Americans have access to quality health care coverage. The goal of this law is not only to ensure that employers are providing health insurance to their employees, but also to make sure those plans are comprehensive and affordable.

The ACA’s Employer Mandate requires Applicable Large Employers (ALEs) to provide their full-time employees with affordable Minimum Essential Coverage (MEC), meeting Minimum Value (MV) requirements, that covers at least 95% of the workforce.

The Employer Mandate is enforced by the Internal Revenue Service (IRS), and while penalties can be imposed if an employer fails to comply with the law, there are some exemptions that may apply. For example, employers who offer health coverage but do not meet minimum value requirements may qualify for a “hardship exemption.” Additionally, employers with fewer than 50 full-time employees are not subject to the Employer Mandate.

What is ALE (Applicable Large Employer)? 

Applicable Large Employer status is a designation given to certain employers by the Internal Revenue Service (IRS) under the Affordable Care Act (ACA). The ACA requires applicable large employers to offer health insurance coverage to their full-time employees or pay a penalty. 

An applicable large employer is any business that has at least 50 full-time employees, or a combination of full-time and part-time employees that are equivalent to at least 50 full-time employees.

What Qualifies an Employee as Full-Time?

Generally, an employee is considered full-time if they work an average of 30 or more hours per week. Certain government agencies may have specific definitions to define full-time employees, such as those that qualify for unemployment benefits. Depending on the situation, an employee may also be considered full-time if they are classified as a salaried or exempt employee, meaning they would receive a set salary regardless of the number of hours worked. 

 

Overall, being aware of an employer’s definition of full-time employment can be beneficial for both employers and employees. Knowing what qualifies as full-time can ensure that employees receive the correct benefits and employers are in compliance with any applicable regulations.

What Benefits are Generally Offered to Full-Time Employees?

Full-time employees typically receive benefits such as health insurance, vacation time, 401(k) plans, and other company-sponsored retirement plans. Some employers may also offer tuition reimbursement programs, life and disability insurance, flexible spending accounts (FSAs), and employee discounts. The specific benefits offered to full-time employees vary greatly depending on the employer and the industry. 

Additionally, many organizations are now offering mental health support, remote working options and other perks that may benefit employees in these uncertain times. 

Full-time employees must be offered benefits if the employer is subject to ALE, while part-time employees are not eligible for coverage until they meet certain hours thresholds. Employers should carefully consider how their benefits packages will affect the ACA and ALE compliance in order to avoid penalties or fines that could arise from noncompliance.

What Qualifies as Part-Time Employment and Benefits?

Part-time employment typically refers to a worker who is employed for fewer hours per week than a full-time worker. Some employers may offer part-time employees the same benefits as their full-time counterparts, including health insurance, paid time off, and retirement savings plans. However, there can be differences in the amount of benefits offered depending on the employer. For example, some employers may offer reduced health care plans or no retirement savings plan to part-time employees. In addition, some employers may cap the amount of paid time off for part-time workers. It is important for potential and existing part-time employees to know their rights under the applicable labor laws. 

Additionally, employers need to be aware of the different rules for eligibility for full-time and part-time employees. For example, if an employer offers a health plan that is limited to full-time employees but also has part-time employees who work more than 30 hours per week, they may not be eligible to receive coverage under this plan. This means that employers must be very careful when establishing eligibility criteria for their benefits plans and make sure that they are compliant with the ACA and ALE regulations.

How PT vs FT Employee Benefits Impact Retention

Employers should also consider how their employee benefit packages affect their employee retention strategies. Offering attractive benefits to full-time employees can help retain them, while providing minimal or no benefits to part-time employees may lead to high turnover rates. Employers need to assess their workforce needs and determine if it is necessary to offer benefits to part-time employees in order to maintain a healthy and productive workforce.

Things to Consider

Overall, employers must take into account the costs of providing employee benefits, as well as the compliance requirements of the ACA and ALE when deciding between offering full-time vs part-time benefits. Employers should also consider their employee retention strategies and make sure they are providing adequate benefits to ensure long-term loyalty from both full-time and part-time employees.  With proper planning, employers can create an effective benefits package that meets the needs of their workforce while remaining compliant with all applicable regulations.

The Affordable Care Act (ACA) requires employers to calculate the number of employees that qualify as full-time and full-time equivalent for each month in order to determine if they are an Applicable Large Employer (ALE). This calculation involves taking the total number of full-time designated employees, plus all non-full-time designated employees’ hours for the month and dividing by 120. The resulting number is then added to the full-time employee count to determine ALE status. 

To ensure accurate calculations, employers can outsource their ACA compliance process to a service provider who will measure workers’ hours of service and calculate FTEs and ALE status on their behalf. Accurately calculating ALE status is essential for employers to minimize potential penalty exposure from the IRS.

To Sum It Up

The decision to provide full-time or part-time benefits to employees is a complex one that requires careful consideration of various factors such as cost, compliance with ACA and employer shared responsibility regulations. Employers should look into their options and evaluate which option is best for them in order to ensure they are providing their employees with quality benefits. Ultimately, offering the right benefits to employees can help businesses attract and retain talent.

If you’re a business owner that needs help navigating FT/PT employee benefits, reach out to us today!

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Why Innovative HIA is the Gold Standard of Customer Service

At Innovative HIA, we pride ourselves on offering:

  • Affordable Benefits
  • ACA Compliance, and
  • Exceptional Service


Today, we’d like to chat a bit more about the third element—the exceptional service we provide—and why Innovative HIA is, therefore, the gold standard of customer service for Minor Medical insurance providers.

(Hint: Our one-stop-shop benefits portal plays a large role in our successful customer service efforts!)

Let’s dive in.

How Innovative HIA Supports the Onboarding and Offboarding Processes

At Innovative HIA, we support businesses beyond providing Minor Medical coverage. We are proud to support the employee onboarding process so your human resources (HR) teams have more time to focus on the daily tasks that keep your business running.

This is why we offer a complete insurance solution that covers:

  • Implementation
  • Enrollment
  • Administration, and
  • Reporting

Our benefits professionals are fully equipped to support onboarding and offboarding procedures to eliminate the hassle for businesses.

How? Using our benefits portal.

Our Benefits Portal

Employee benefits administration can be a pain for any HR department. At Innovative HIA, we aim to simplify the process by giving you access to everything you need in one place.

Our one-stop-shop portal is proprietary and unlike any other. Our portal grants you access to all of the tools necessary to support a new hire (from beginning to end).

We eliminate the headache of unnecessary paperwork with benefits management portal access. You can:

  • Make plan changes
  • Order ID cards
  • Check claim status online
  • Track onboarding and offboarding
  • And more

Resources are only a click away.

Besides creating a seamless onboarding process with our all-in-one portal, we also provide video tutorials for our partners. These resources provide instructions that assist navigation through the portal.

Read on to view our enrollment portal walkthrough.

Affordable Care Act vs. Obamacare: What’s the Difference?

Although you’ve likely heard of Obamacare, you may not know that Obamacare is synonymous with the Affordable Care Act. This healthcare law that passed in 2010 goes by a few different names. You may also see this law referenced as PPACA or ACA (the acronym for Affordable Care Act).

Below, let’s discuss what Obamacare or the ACA covers, its goals, when you can enroll, and more.

What Do Obamacare and the Affordable Care Act (ACA) Cover?

The Affordable Care Act was designed with three primary goals. To:

  • “Make affordable health insurance available to more people…
  • Expand the Medicaid program to cover all adults with income below 138% of the FPL
  • Support innovative medical care delivery methods designed to lower the costs of health care generally.”

Additionally, there are sections of the ACA designed to help patients have access to affordable benefits. These sections include:

  • Quality, Affordable Healthcare for All Americans
  • The Role of Public Programs
  • Improving the Quality and Efficiency of Healthcare
  • Prevention of Chronic Disease and Improving Public Health
  • The Difference Between the ACA and Obamacare
  • Healthcare Workforce
  • Transparency and Program Integrity
  • Improving Access to Innovative Medical Therapies
  • Community Living and Assistance Services and Supports Act (CLASS Act)
  • Revenue Provisions
  • Reauthorization of the Indian Healthcare Improvement Act

From these sections came the 10 essential benefits that are included in minimum essential coverage (Minor Medical), which is defined as “any insurance plan that meets the Affordable Care Act requirement for having health coverage.”

These 10 benefits include:

  • Prescription drug coverage
  • Pediatric services
  • Preventative, wellness services, and chronic disease management
  • Emergency services
  • Hospital-stay coverage
  • Mental health and addiction services
  • Pregnancy, maternity, and newborn care
  • Ambulance patient services
  • Laboratory services
  • Rehabilitative and habilitative services and devices

Why Was This Healthcare Law Created?

Obamacare was designed to provide basic and affordable coverage for all Americans. Before Obamacare, those with pre-existing conditions could be refused coverage or charged more for their plan.

Obamacare ensures that insurance companies allow those with pre-existing conditions to receive the same care as those without. 

Now, minimum essential coverage plans exist that provide the services required by the ACA while simultaneously being affordable for employers and employees. 

These plans help both parties stay healthy while also avoiding the fines and penalties that come along with not having health insurance (especially for Americans living in states with individual mandates).

After all, minimum essential coverage isn’t a one size fits all service. There are different options and levels to choose from to create a plan best suited for your specific needs.

Learn more by reading our article, “What is Minor Medical and What Does It Cover?”

When Can I Enroll in Obamacare?

Open enrollment is the one time of the year when employees can sign up for health insurance or change their health insurance plans.

If you choose not to enroll during the open enrollment period, your options to purchase coverage become limited. Why? You cannot purchase ACA-compliant coverage unless a qualifying event occurs.

Qualifying events include:

  • Loss of a job
  • Move to a new coverage area
  • Birth of a child
  • Loss of existing coverage
  • Family event (i.e. marriage, divorce, or death)

Depending on state requirements, employees can take advantage of open enrollment for the following year starting November 1 until approximately January 15th. Again, open enrollment varies on a state-by-state basis. States like California, for example, extend their open enrollment dates to January 31.

Read on to learn what happens if your employee misses open enrollment.

How does the Individual Mandate Affect Obamacare?

When Obamacare was first implemented, it contained a clause that required Americans to have health insurance. Those who didn’t have health insurance were required to pay a tax penalty. This tax penalty was repealed in 2017. 

However, the individual mandate is still in effect for some states in the U.S. 

Residents living in the following states have implemented individual mandates.

  • California
  • The District of Columbia
  • Massachusetts
  • New Jersey 
  • Vermont
  • Rhode Island

This means that people living in the states mentioned above must have health insurance or face state-mandated tax penalties. Read on to learn more about ACA employer penalties.

At Innovative HIA, our goal is to provide affordable ACA-compliant benefits to our clients. For more information about the plans that we offer or to enroll, get in touch with one of our brokers today.

The Individual Mandate: What Employers Need to Know

The California Individual Mandate, originally signed into law in 2019, was a response to the federal individual mandate being struck down by the Trump administration.

 

This state law requires all California residents to obtain Minimum Essential Coverage (MEC) for a minimum of nine months, or they may face a tax penalty unless exempt.

 

Let’s discuss the individual mandate and what employers need to know, starting with a shorthand list of exemptions.

MEC Exemptions

According to the State of California Franchise Tax Board, some exemptions include:

 

  • An individual’sincome is below the state tax filing threshold
  • A coverage gap consists of three consecutive months or less
  • Coverage is not affordable based on the income reporting in your state income tax return
  • If the cost of the lowest plan, whether marketplace or employer-sponsored, is more than 8.09% of income on an individual’s tax return
  • The cost of the lowest employer-sponsored family plan, including dependents, is more than 8.09% of the household income
  • Non-citizens who are not lawfully present in the state
  • Those who are living abroad or are residents of another state
  • Members of a health care sharing ministry
  • Enrolled in limited or restricted-scope Medi-Cal or other similar coverage
  • Those in federally recognized tribes are eligible for services through an Indian health care provider or the Indian Health Service
  • Those in jail, except for incarceration, pending the disposition of charges

 

These exemptions typically must be claimed on your state income tax return.

 

While the individual mandate went into effect “to reduce the number of uninsured individuals and families,” it also has implications for employers in California. Moreover, the law requires additional reporting from specific organizations.

Employer Reporting Required by the Individual Mandate

Employers must report insurance information to the Franchise Tax Board (FTB) of California by March 31. The data reported includes the enrollment participation of employees and their dependents.

 

Employers with an insurance provider who reports to the FTB are not required to report in addition to their provider.

What are the Penalties for Not Reporting Insurance Information to the FTB?

Employers who do not meet the filing deadlines of the FTB are subject to a $50 penalty for every employee receiving coverage.

 

Individually, there is a flat penalty per household member or 2.5% of the gross household income, whichever is higher. If an individual does not obtain coverage for the entire year, they would be subject to a minimum fine of $800. 

Why Are There ACA Reporting Requirements for Employers?

For applicable large employers (ALE), the FTB introduced these reporting requirements to help enforce the state’s healthcare mandate.

 

Employers who offer self-insured or employer-sponsored plans must report individual enrollment through Form 3895C unless their insurer reports via Form 1095-B. 

 

These reports allow the FTB to verify an individual’s coverage and identify who must pay an individual shared responsibility provision (ISRP).

 

This sounds like a lot, but don’t worry. At SBMA, we take care of all ACA reporting required for the ALEs we work with. We submit Forms 1095-B and 1095-C to ensure you comply with ACA requirements.

Individual Mandates in Other States

Individual mandates are becoming a more common practice in states other than California. The current states who have individual healthcare mandates include:

 

  • California
  • The District of Columbia
  • Massachusetts
  • New Jersey
  • Rhode Island, and
  • Vermont

 

Read this article “What are the Advantages of the Affordable Care Act?” to learn more.

A Final Word

As an employer, it is essential to understand the individual mandate to ensure you remain compliant with reporting requirements and avoid hefty fines.

The best way to stay on top of these requirements is to partner with an insurance provider who handles your reporting. Learn more about benefit plans, here.

What Business Owners Should Know About ACA Benefits in 2022

Applicable Large Employers (ALEs) are businesses that have at least 50 full-time, or full-time equivalent employees in one calendar year. Under federal law, they must provide at least 95% of their employees and their children up to age 26 with Affordable Care Act (ACA) compliant coverage. 

 

Why? Because the ACA was designed to make healthcare services affordable to more people. 

 

Businesses that are considered ALEs that fail to meet ACA requirements will end up paying fines and penalties by the Internal Revenue Service (IRS). These fines can range from $300 – $4000 per employee who is not offered ACA compliant benefits.

 

Minimum Essential Coverage (MEC) is one of the most comprehensive and affordable ACA-compliant plans employers can provide to their workforce. Basic benefit plans meet the minimum ACA requirements while simultaneously supporting a healthy workforce. 

 

As we look to the next year, it’s important to understand how changes in insurance and federal law may affect their ACA compliance. What does a business owner need to look out for in 2022 to remain ACA compliant?

Look out for Increased Insurance Premium Costs 

First and foremost, health insurance premium costs are increasing for business owners this year. The baseline for affordability percentage, or the maximum percentage of an employee’s income they can contribute to their employer-sponsored self-only coverage, has lowered, therefore there is a greater cost to the business owner. 

 

In 2021, the affordability percentage was 9.83%, however, the threshold for 2022 is decreased to 9.61%. 

What does this mean for business owners? 

Business owners who provide ACA-compliant benefits to their employees will now have to cover the difference between last year’s and this year’s affordability threshold. 

 

If an employee makes $40,000 a year, they could only contribute a maximum of $3,932 towards health coverage plans in 2021. That same employee can now only contribute $3,844 per year in 2022. The employer is now responsible for the $88 difference. 

 

The lowered affordability threshold makes healthcare more affordable for employees but will be an additional financial responsibility for employers. 

Understand the American Rescue Plan (ARP)

The American Rescue Plan (ARP), created by the Biden Administration, was built to lower insurance premiums for lower and middle-income families. It temporarily reduced the affordability threshold to 8.5%. 

 

These lowered premiums contributed largely to this enrollment season’s record-breaking number of people enrolling in health insurance. 

Evaluate Grandfathered Group Health Plans 

Health plans are considered grandfathered plans if they existed and have covered at least one person as of March 23, 2010. These plans do not have to comply with certain ACA rules. Some plans may lose their grandfathered status if specific changes are made to reduce benefits or increase costs to employees or dependents. 

 

As a business owner, it’s important to look for those grandfathered plans that may have lost their grandfathered status. Ensure all elements of the plan design remain ACA-compliant. One specific area that grandfathered plans may not include in the latest ACA requirements is preventative services without cost-sharing.

 

It’s also important to keep records that document the plan’s terms that were in effect on March 23, 2010. This helps to verify existing grandfathered plans. 

Review Plan Documents for Changes 

Plans undergo changes over time. Review any changes to make sure your plan documents are aligned with any changes– new and old. 

 

All group health plans must:

Ensure waiting periods are met

The waiting period is a period of time that must pass before coverage is effective for an employee or their dependents. This waiting period must not exceed 90 days.

Confirm annual dollar limits are not covering essential health benefits 

The essential health benefits are the services that must be covered under the Affordable Care Act. If the plan you’re using limits the number of visits to health providers or limits the days of treatment, you must verify that the visit/day limit does not amount to a dollar limit.

Verify there are not any pre-existing condition exclusions 

Exclusions for pre-existing conditions cannot be imposed on any individual, regardless of their age. 

 

Unless there are certain HRAs, make sure there is not an employer payment plan in place.  

Lastly, as an employer offering ACA-compliant benefits, it’s important to ensure that there are not any employer payment plans in place. These payment plans are used by an employer to reimburse employees for some or all of the premium expenses for their health insurance policy. 

 

Non grandfathered group health plans must: 

Make sure out-of-pocket costs for essential health benefits don’t go over $8,700 for individuals and $17,400 for family coverage.

Give Employees and Dependents Required Notices 

Be aware of the required notices employees and their dependents might receive so you are prepared to submit these notices appropriately. 

 

Employees and their dependents must receive the proper notices such as: 

 

  • Health insurance exchange notice: written notice related to the Health Insurance Marketplace for all new employees within 14 days of their start date.
  • Summary of benefits and coverage: Confirm the contractual arrangement with your carrier to a third-party administrator and any notice of plan changes no later than 60 days prior to the effective date of the change.

Be Aware of “Pay or Play” Responsibilities 

ALEs, as mentioned before, are responsible for providing employees with healthcare benefit coverage options. Make sure you know your business’s status as an ALE, and that you are complying with the rules and regulations. 

 

If you know your status as an ALE, revisit the type of group health plan coverage you’ll offer your full-time or full-time equivalent employees

Prepare forms 1094 and 1095

Each year, the IRS requires ALEs to send their employers 1094 and 1095 documents to fill out to make sure their employers are complying with ACA requirements. It also helps the IRS ensure ALEs are offering coverage, and verify the type of coverage they are offering. 

 

The forms for the 2021 calendar year are due in early 2022. Fill them out early and accurately to avoid missing any information. 

 

Learn more about forms 1094 and 1095 here. 

Other Updates to Review

Depending on the employer and the health plan, other action item updates might need to be reviewed. The list below outlines certain actions employers might need to take to continue being compliant with ACA regulations in 2022. 

 

  • Medicare Tax for High Earners should be withheld (0.9%) from employees who make $200,000 or more in a calendar year
  • Monitor the coverage of preventative services guidelines 
  • Distribute the medical loss ratio rebate as appropriate 
  • Employers who have certain self-insured health plans must report and pay Patient-Centered Outcomes Research Institute (PCORI) fees by July 31st, 2022
  • Report health coverage costs on W-2 forms 
  • Confirm compliance with Section 1557 Nondiscrimination requirements if applicable. 

 

For more information about ACA compliance, and how to avoid the fines and penalties associated with being uncompliant, read our article, here.

business owners need to be aware of ACA updates this year

 

Article originally published on SBMA Benefits. 

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What Are the Advantages of the Affordable Care Act?

In 2010, The Affordable Care Act (ACA), aka Obamacare, was enacted to provide reform to the health insurance industry.

Overall, the Affordable Care Act aimed to accomplish 3 main strategies: make insurance affordable, emphasize prevention, and improve how health care is delivered.

Over a decade later, it’s challenging to ignore the new standards that were derived from the original push to pass this legislation. While the act originally caused disagreements nationwide, there are clear advantages to be noted that have resulted from ACA.

Make Insurance Affordable 

The first of the strategies that Obamacare aimed to accomplish was to make health insurance affordable for all Americans.

Oftentimes many assume that they have a clear understanding of the finances of their insurance coverage. However, after landing in the hospital or experiencing a need for emergent care, they would find themselves slapped with high deductibles, unexpected bills, and low maximum coverage. ACA was responsible for making changes to such events.

ACA was able to lower insurance costs for Americans in a variety of ways. The first of which was the provision of tax credits for insurance to middle-class Americans. By limiting out-of-pocket expenses to a maximum of $8,150 for individuals and $17,100 for families, in addition to extending the accessibility of Medicaid beyond 100% poverty level, health insurance became more affordable for many.

In addition to these initial cost caps, ACA allowed parents to keep their children on their medical plans until they reached age 26. It also established the Small Business Health Care Tax Credit, which serves to benefit businesses with less than 25 full-time employees. It provides such businesses with a tax credit that covers up to 50% of their contribution to their employees’ health insurance coverage.

Emphasis on Preventative Care 

The second strategy that ACA addressed was putting emphasis on preventive care. Prevention focuses on the promotion of a healthy lifestyle and frequent check-ups to attempt to identify and target potential health issues before they escalate.

The ACA enacted a list of 10 essential benefits that all insurance plans must cover. They include:

  1. Preventive and wellness visits, including chronic disease management
  2. Maternity and newborn care
  3. Mental and behavioral health treatment
  4. Services and devices to help people with injuries, disabilities, or chronic conditions
  5. Diagnostic lab tests
  6. Pediatric dental and vision care
  7. Prescription drugs
  8. Outpatient care
  9. Emergency room services
  10. Hospitalization

In addition to establishing these initial benefit requirements, ACA was responsible for expanding treatment for mental health, addiction, and chronic diseases. From an insurer’s perspective, these are often the most expensive patients for whom to provide ongoing care. ACA put emphasis on programs to combat and prevent this prolonged treatment including those that focus on smoking cessation and combating obesity.

ACA also eliminated lifetime and annual coverage limits and denial of coverage due to pre-existing conditions. Insurance companies are not able to drop or deny you coverage because you have a pre-existing condition, made a mistake on your application, or because you’ve been recently diagnosed with a life-threatening disease. Additionally, they are not allowed to require new members to wait more than 90 days before coverage starts.

Lastly, ACA changed the way that insurers spend premium dollars. It declared that 85% of premium dollars paid by insured members must be spent on healthcare services and quality improvement. If these requirements are not met, insurers are required to provide covered members with a rebate.

Improve Health Care Delivery 

The final strategy that Obamacare aimed to tackle was improving how health care is delivered by doctors and hospitals.

One example of such was the establishment of Accountable Care Organizations. Rather than ACA paying for each individual test, procedure, and visit, these organizations were designed to receive coverage payments based on the care and well-being of patients. So far, these organizations have shown significant results. As such, the ACA has continued to encourage them.

Additionally, ACA encouraged the transition to digital medical records. Traditionally, medical records were kept on paper and transferring them required doing so be done by mail or fax. Now, keeping electronic medical records provided a safer, more secure filing system that provided ease of transfer.

ACA also targeted the reduction of fraudulent doctor/supplier relationships. It provided guidance to states reviewing excessive insurance rate hikes and required background checks of all nursing home staff to prevent abuse of seniors.

Overall, the Affordable Care Act, or Obamacare, provided significant advantages to the healthcare industry. The Act was designed to best benefit both insurance suppliers and recipients to ensure that patients in need receive the best care possible without breaking the bank while still ensuring that the insurance industry was not crippled in the process.

While few fully recognize the benefits that were established as a direct result of the Affordable Care Act, many of the implemented changes have since become a recognized standard across the healthcare industry.

Innovative HIA provides a complete solution for ALE employers who want to provide affordable, ACA-compliant benefits to their workers. Our streamlined technology and personal services provide a complete solution for our clients and their employees. Learn more about what we do, here.

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