The state of healthcare has evolved a lot over the years, and how that impacts businesses has changed as well. Staying up to date on what health care coverage your business needs and what that means for your health plans and costs helps keep your business in the know and compliant
For a current update on the requirements, a checklist to consider, and more, read on!
What is ACA-compliant coverage?
After the Affordable Care Act (ACA) was announced and put into place, compliant coverage became a requirement for many businesses. Under the ACA there is a set minimum coverage that employers must meet. This includes job-based coverage, Medicare, Medicaid, and other coverage laid out by ACA.
To be ACA compliant, one must provide a plan by the health insurance marketplace or have a plan that meets those standards.
Not being ACA compliant leaves you at risk of penalties.
More about ACA coverage
There are a couple of rules set by ACA on what plans must include. This includes what services are provided, coverage requirements, and the quality of the group plan.
The ACA was created in many ways to help make health insurance and group coverage more affordable for individuals and businesses, while still providing quality health insurance. Here are a couple of regulations under ACA.
There is a maximum percentage an individual can pay for health insurance. In 2021, the percentage is 9.83% of employees’ household income.
Large employer mandate
Any large employer (defined as 50 full-time equivalent employees)) is required to provide quality ACA-approved health insurance for any employee that works at least 30 hours a week or 130 hours a month.
If a large business does not provide insurance they will be forced to pay a fine.
Essential health benefits
An essential health benefit means the plan covers benefits laid out by ACA, has cost-sharing limits, and meets minimum value requirements.
One way you may be compliant (and is still in effect) is through a grandfathered plan. A grandfathered plan is a health insurance plan that you enrolled in before March 2010.
If you are an employer providing grandfathered status, you must keep benefits and costs relatively the same, notify your employees about their plan status, and have more than one person covered under this plan since 2010.
Grandmothered plans are slightly different as these are the plans that were in existence from 2010 to 2014 before the ACA was in effect.
Although initially, the thought was these plans would be just a transitional policy, they have been renewed to be able to exist until the end of 2021. Grandmothered plans count as minimum essential coverage.
*Quick note: more information can be found on your state's health gov website, where they will also have contact information.
Want to learn more about team coverage? Or solutions to manage benefits? Contact us.
Plans that aren’t regulated by the ACA
In addition to plans regulated by the ACA, you may choose to offer some extra options or maybe look into whether this coverage is necessary. Common options include:
Vision care may include optometry or other professional vision options. Many times this is a part of health insurance, but it is not specifically regulated by ACA.
Similarly, a lot of plans offer dental care, or additional dental care can be purchased however, it is not outlined by ACA.
If you connect with your group health plan they may be able to recommend dental coverage.
Specific health coverage for illness
Some employees may choose to get additional coverage for a specific illness or health problem.
Often used as more of transitional insurance for those that need short-term solutions, these types of plans are not regulated by ACA.
Although brushing up on what is compliant may seem like a task, as you’ll have to research and fill out forms, the reality is ACA can provide benefits. Aside from the benefits of these rules providing more health insurance every year, regulations like ACA can help your business in the long run.
Expanded more affordable options
One of the main pushes of the ACA was expanding affordable options. This means more opportunities for your business to choose from and for individuals to choose from. This can help your business save money and provide better healthcare you might not have been able to provide in the first place.
It also means healthier employees reporting to work each day and helping your company grow.
Benefits can be an enticing thing for new candidates. Candidates often review health plans and health coverage as a part of a general company review and so with ACA coverage, you can provide your candidates with the type of benefits they are looking for.
Lastly, having health benefits will help you in tax season with the IRS, as health benefits provide more tax credits.
Want tax expert's advice on the filing
Any research on health insurance can seem daunting and may require different skills than running your business, which is why partnering with an expert can help! Learn more about how CAVU Human Capital Management can help you make the best decision for your business, with data-driven metrics, expert advice, and more.