INSIGHT ON: Health Insurance – Moving target

Posted on Apr 1, 2015 :: Health Insurance , Insight On
Posted by , Insight on Business Staff Writer


If you own a large company, you’re already required to provide your employees health coverage that’s compliant with the Affordable Health Care Act. If you weren’t ready to do it by January, you’ll have to get ready to pay a fine.

It’s a big change, to say the least, and the changes aren’t done yet.

ACA compliance currently affects businesses with more than 100 employees. But if you own a smaller company, there are other regulations going into effect that you’ll need — and want — to know about.

If you own a mid-sized business, classified by the government of having between 51 and 99 employees, the employer mandate is set to go into effect for you on Jan. 1, 2016. Small businesses, those with two to 50 employees, are not required to provide insurance, but many do to stay competitive with larger employers, says Chris Hanson, owner of Hanson Benefits in Appleton.

That group — those businesses with two to 50 employees who do provide health insurance to their workers — are in a transitional period allowing those employers to keep their old plans in place, essentially delaying their transition into a new ACA-compliant, adjusted community rated plan.

Under adjusted community ratings, a single rate is set for groups in a particular geographic area without regard for factors such as gender. Medical questions are limited to whether someone is a smoker or not.

This transitional agreement came out of President Obama’s “If you like your plan, you can keep it,” idea. “Small businesses can continue to do that, but late in 2016, transitional relief wears off and they’ll have to choose a new adjusted community rated ACA plan,” says Angela Loberg, vice president of sales and account management for UnitedHealthcare.

The last renewal a small business can make of its existing plans is in fall 2016.

So far, most small employers have opted to keep their old plans, Loberg says.

In fact, 99 percent of Hanson’s clients chose to keep their old plans, and now a few of them are starting to make the switch as they see rates increase enough to push them in that direction, Hanson says.

That transition period ends in September 2017, says Sheila Jenkins, president and CEO of Network Health. A few have already chosen to switch over, “but once you move into that Affordable Care Compliant plan, you have to stay there,” Jenkins says. “You can’t opt back out.”

That same transitional process will be made available to mid-size employers, she says. The deadline comes sooner for those businesses between 50 and 99 employees. Their adjusted community rating, as well as the mandate to offer coverage, kicks in Jan. 1, 2016.

“This is the year they could change their benefit structure,” Jenkins says. “They can change carriers, but they have to lock it in by Dec. 31, in order to qualify for the transitional plan.”

Employers who fall into that category should spend some time with their benefit advisors — soon — to choose what’s best for them. “If they wait until Jan. 1, 2016, it’s too late,” Jenkins says.

There is some speculation about whether the 51- to 99-employee businesses are, in fact, required to move into an adjusted community rating plan Jan. 1, 2016, Loberg says.

“Since the majority of the small employers did not move into adjusted community rating in January, we haven’t experienced the full effect of what the law means for the two- to 50-employee small businesses, Loberg says. “It could be very interesting come Jan. 1, 2016.”

Additionally, there are some IRS reporting requirements under codes 6055 and 6056 coming up. “They’re very important,” Loberg says, “I don’t think they’re on a lot of employers’ radars.”

Businesses would use forms 1094C and 1095C to comply, reporting to the government whether employees were eligible for health insurance and whether or not they took it, Jenkins says. “It really kind of ties back into the employer’s responsibility for providing health insurance and the individual’s responsibility for having it,” Jenkins says.

The IRS reports that compliance is mandatory in 2016, but businesses are encouraged to file this year.

“That’s something everyone’s kind of in the thick of right now — trying to figure out the filings that are due to the IRS,” Loberg says.
Rulings by the U.S. Supreme Court on whether to continue to allow federal subsidies to offset the individual cost of health care could further impact business requirements.

“Depending on how the Supreme Court ruling comes out, it could turn everything upside down,” Jenkins says.

It’s difficult to predict exactly what would happen if the Supreme Court ruled that the subsidies in the non-state-sponsored exchanges should be eliminated, Jenkins says.

For what businesses know is coming, they should be working with their agents or benefits advisors on the best way to proceed. Hanson says it’s important to have a good relationship with insurance agents who deal in this market — things change monthly and sometimes weekly, she says.

“When you take a law like the Affordable Care Act that began with about 2,700 pages, and now almost five years later, we have 40,000 pages of rules and regulations — and it just continues to grow — it’s a moving target,” Hanson says.