UPDATE: On 10/28/2013, Health and Human Services issued a Question & Answer about the Individual Mandate Cutoff date, stating that it has the authority to establish hardship exemptions from the shared responsibility payment for individuals. The HHS will now allow individuals to avoid the personal responsibility penalty if they enroll in a plan by March 31, 2014.
January 1, 2014 is the day when mandatory ACA health insurance coverage for individuals become effective. If you are without coverage on the first, you are subject to the greater penalty of $95 or 1 percent of family income. However, there is a rule that allows individuals to go without insurance coverage for less than three consecutive months before being assessed the penalty. The three month grace period ends on March 31, 2014. For insurance coverage purchased through the Marketplace, policies need to be purchased by February 15 for an effective policy start date of March 1. Policies purchased by March 15 will not be effective until April 1 and will exceed the three month grace period. If the insurance coverage is purchased through a private insurance carrier, the purchase and effective start dates may be different and vary in length. To avoid the individual penalty, plan ahead. Read more from the Kaiser Health News.
Despite controversy, delays and glitches the Affordable Care Act took a leap closer to becoming fully implemented in October.
Both the employer and individual mandates moved forward with employers notifying employees about their health insurance options and the state exchanges officially opening online for individual signups. Both events are related and significant for Nebraska business.
Businesses understand that to retain a quality workforce, they may need to offer health insurance. They should consider affordability as defined by the Affordable Care Act when making decisions about which group plan(s) to offer.
According to a study by the ADP Research Institute, employer-sponsored health insurance is typical of the gold level plans offered in the individual Marketplace and is less expensive.
Although offered employer-sponsored health insurance, employees may use the federal marketplace (healthcare.gov) to comparison shop for plans they think may better meet their individual or family needs in terms of coverage and affordability.
If an employee purchases health insurance in the marketplace, rather than enroll in an employer-sponsored plan, a small employer is under no statutory obligation to contribute to the payment of the employee's health insurance.
It's a different story for large employers, or those with 50 or more full-time equivalents. The ACA does not explicitly mandate that large employers offer affordable health insurance, however, it does impose penalties if, even just one full-time employee purchases insurance through the individual Marketplace and receives a premium tax credit (subsidy).
Therefore, when considering the affordability of group health insurance, large employers need to look closely at the wages and salaries paid to employees who are offered insurance. To meet the ACA affordability requirement, the employee's premium contribution for self-only coverage cannot exceed 9.5 percent of the employee's yearly W-2 wages.
For individuals and families with household incomes falling between 100 percent and 400 percent of the federal poverty levels they may be eligible for premium tax credits should they purchase coverage through the marketplace.
In 2014, premium tax credits will be applied toward individuals with incomes up to $45,960 and families of four with incomes up to $94,200. The premium tax credits will be offered on a sliding scale with the lower income households receiving more credits.
Penalties will be waived for employers providing affordable coverage to at least 95 percent of their employees. To minimize the risk of ACA penalties, some employers may have to increase participation rates in their health coverage plan by increasing premium supports for lower-wage employees.
As of July 2, 2013, this shared responsibility or "pay or play" provision deadline was delayed until Jan. 1, 2015. Between now and then, large employers should take a critical look at their options for providing affordable health insurance to their employees.
To learn more about the Affordable Care Act and the provisions mentioned above, employers can go to UNL Extension's website at http://eship.unl.edu/healthcare. In addition they can view a webinar at http://learn.extension.org/events/1268.
Developed by UNL Extension, these are meant to be a starting place for employers to learn more about the ACA so they can better work with their attorneys, insurance agents, accountants and human resource managers to develop business strategies for complying with the law.
Image credit: cteconsulting / 123RF Stock Photo
In partnership with eXtension, the University of Nebraska-Lincoln Extension ACA Team will be hosting an online webinar, the Affordable Care Act and Your Small Business on Thursday, October 10, 2013 at 2:00pm (ET); 1:00pm (CT); 12:00pm (MT); 11:00am (PT) at https://connect.extension.iastate.edu/etc-cop. Presenters will be Marilyn Schlake and Carol Welte, University of Nebraska-Lincoln Extension.
Although the Affordable Care Act (ACA) large employer (play or pay) mandate has been delayed until 2015, other ACA regulations are steadily moving forward, including opening of the Small Business Health Options Program (SHOP) on October 1st. There are many ACA regulations that have and will continue to impact small and large businesses. This webinar will highlight the different regulations and strategies businesses can use to manage the ACA.
No pre-registration is required and there is no fee to participate. About 10 minutes prior to the start time simply go the Adobe Connect Pro meeting room at https://connect.extension.iastate.edu/etc-cop. You will be presented with a login screen that has an "Enter as Guest" option. Enter your full name then click "Enter Room" to join the conference. You will be able to hear the audio directly from your computer’s speakers.