Health plans that don't qualify as minimum essential coverage include coverage only for vision care or dental care, workers' compensation, coverage only for a specific disease or condition, and plans that offer only discounts on medical services.
Nongrandfathered group health plans must comply with an annual limit on cost sharing, known as an out-of-pocket OOP maximum, set by the department of Health and Human Services. The IRS annually sets a separate, and lower, OOP maximum for high-deductible health plans that can be linked with health savings accounts.
ALEs are required to provide full-time workers with minimum essential coverage that meets affordability and minimum value thresholds, and they face penalties for failing to do so. Employees with household income between percent and percent of the federal poverty level are eligible for tax credits for exchange coverage if they do not have access to affordable employer-sponsored coverage that provides at least minimum value meaning the plan pays at least 60 percent of the cost of covered benefits.
The Section H b penalty —the B penalty—applies when the ALE does offer coverage to at least 95 percent of full-time employees , but each full-time employee was not offered an option of "minimum essential coverage" that was "affordable" and provided "minimum value.
State and federal insurance regulators separate small and large employers that purchase group insurance for their employees into separate markets.
The states typical regulate a small-group market for employers with 50 or fewer employees and a large-group market for employers with more than 50 employees, although under the ACA states have the discretion to expand their small-group markets to include employers with 51 to employees, and several have done so. The ACA, as enacted in , held that effective in the definition of a small-group employer would increase nationally to include organizations with one to employees.
The ACA and its implementing regulations require nongrandfathered, fully insured plans in the individual and small-group markets to provide essential health benefit coverage in 10 separate categories that reflect the scope of benefits covered by a typical employer plan. However, self-insured small-group plans, as well as all large-group plans and all grandfathered plans, are not required to offer essential health benefits.
You may be trying to access this site from a secured browser on the server. Please enable scripts and reload this page. Page Content. The Section H a penalty —the A penalty—applies when the ALE does not offer minimum essential coverage to at least 95 percent of its full-time employees in any given calendar month and at least one full-time employee receives a premium tax credit to help pay for coverage through an ACA marketplace exchange.
Full-time employees are those who average 30 or more hours of work per week. The penalty is waived for the first 30 full-time employees. Health Care Reform. You have successfully saved this page as a bookmark. OK My Bookmarks.
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Cancel Sign In. Please purchase a SHRM membership before saving bookmarks. OK Join. An error has occurred. From Email. The study also estimated that One of the reasons why people are signing up is the individual mandate. After the law was enacted, the Supreme Court took up a legal challenge to the individual mandate. The plaintiffs sued to have the individual mandate voided as unconstitutional. In the run-up to the court decision, RAND analyzed the likely effect of eliminating the individual mandate and found that without it, an estimated 12 million people who would otherwise sign up for coverage would be uninsured.
The analysis found that eliminating the individual mandate would cause the number of people enrolled in the individual exchanges to fall by more than 20 percent.
During the early enrollment period, debate erupted over the enrollment of young adults in the individual exchanges. Some news stories and commentators maintained that unless roughly 40 percent of enrollees in the individual exchanges were young adults — between ages 18 and 34 — then the costs associated with older, less healthy adults would lead to higher premiums and ultimately destabilize these markets.
At the end of the first open enrollment period in March , enrollment figures from the U. Department of Health and Human Services showed that 28 percent of enrollees were between the ages of , while 48 percent were 45 or older. In addition, the spending data used as input to COMPARE suggest that, for most enrollees of all ages, premium payments exceed health care spending. To encourage enrollment in the new individual insurance exchanges, the ACA offers tax credits to help lower-income individuals and families buy coverage.
These tax credits have faced multiple court challenges. In late , the U. Supreme Court agreed to hear King v Burwell , a case that challenges the legality of government subsidies that help low- and moderate-income people buy health insurance in marketplaces operated by the federal government.
The legal challenge to these subsidies rests on the grounds that the wording of the law allows such aid only to people who buy policies through state-run marketplaces. They estimated that eliminating subsidies for low- and moderate-income people who purchase ACA-compliant plans would reduce enrollment in those 34 states from Of these, 8 million would be left uninsured.
This analysis was widely cited in the debate in the run-up to the case in amicus briefs submitted to the Court before it heard oral arguments in March, Another unanticipated swerve along the path to implementation took place in , when the Supreme Court ruled that the federal government could not require states to expand Medicaid.
The ruling thus left expansion up to the states. In the wake of this decision, roughly half of the states have expanded Medicaid and half have not. RAND analysis found that Medicaid expansion is a boon for states: it boosts state economies and benefits the poorest residents by expanding their access to coverage and care and reducing their health spending and exposure to catastrophic medical costs. As of late , momentum seemed to be swinging toward expansion.
Additional states had either come around to expanding Medicaid Pennsylvania or were reconsidering their earlier decision not to expand Wyoming. This mandate, aimed at larger firms those with 50 or more employees , requires that firms offer coverage to employees who work at least 30 hours per week.
RAND analysis estimated that the effect would be the opposite: that the number of workers receiving employer offers of coverage would actually increase.
Early enrollment numbers from confirmed that most of the newly insured in the U. During the initial rollout in , political pressure and angst in the business community led the Obama administration to delay enforcement of the employer mandate for a year and then extend the delay for some firms an additional year, until Yet another controversy—this one self-inflicted by the Obama Administration—emerged when millions of Americans began receiving notices that their pre-ACA health policies had been canceled.
This contradicted the promise made earlier by President Obama that Americans would be able to keep their existing health care plans. RAND estimates found that, of the 52 million who would have been uninsured without the ACA, approximately 33 million will become eligible for coverage through Medicaid or the individual marketplace after the major provisions of the ACA take full effect. Some of these individuals will choose not to enroll in coverage.
An estimated 19 million uninsured Americans will remain ineligible for Medicare or subsidies, and are 'left behind' by the ACA. A RAND survey found that in a nationally representative sample, roughly half of respondents lacked sufficient understanding of insurance or the law to navigate the exchanges. This was particularly true among the poor, who are the most likely to be uninsured and to benefit from coverage options under the ACA.
Focus groups conducted in Colorado identified a series of barriers among those who were eligible to sign up but who had chosen not to enroll in the new individual marketplace. These include a lack of information about health insurance and low health literacy, in addition to issues with the cost of coverage.
Those who did acquire coverage faced challenges translating their new benefits into access to health care. Small firms, too, face challenges in obtaining coverage for their workers. To help employers select high value health plans for their workers, the ACA requires that health plans disclose important information to employers about insurance benefits and coverage.
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