The Affordable Care Act

Transcription

1 The Affordable Care Act Employers Guide to 2015 and Beyond For Small Groups

2 Summary Jan. 1, 2014, ushered in new Affordable Care Act (ACA) health insurance market reforms. These changes are impacting the way in which employers offer and structure benefits for their employees. Some ACA regulations have already been implemented, while other rules begin in The law does not affect all businesses in the same way. This guide is intended to help small businesses understand what s important for 2015 and beyond. Employer Shared Responsibility /6056 Reporting Requirements 4 Summary of Benefits and Coverage 5 Exchange Notices 6 Health Insurance Marketplace 7 Actuarial Value 8 Small Business Resources 9 Essential Health Benefits 10 Out-of-pocket Maximum 10 Pediatric Dental and Vision 11 1

3 Employer Shared Responsibility One of the important considerations for 2015 is whether an employer will face a penalty for not providing minimum essential coverage (MEC) to employees. The Employer Shared Responsibility (ESR) provision, which begins in 2015, applies to large employers. In general, if you are a small employer with fewer than 50 full-time employees, you will not have to pay any penalties for not providing health care. However, if you are an employer with a small group plan that has 50 or more full-time employees, including full-time equivalents, you may be subject to ESR, and here s information that you need to know. Do you have 50 or more full-time employees, including full-time equivalents? Starting in 2015, your business may face a penalty if you: Don t offer MEC to your full-time employees (generally defined as 30 or more hours a week) and their child dependents Offer coverage to your full-time employees and their child dependents, but it doesn t have minimum value (doesn t cover 60 percent of employee health care costs)? Full-time Under ESR, an employee is generally considered full time if he averages at least 30 hours a week or 130 hours in a calendar month. Full-time Equivalent? Under ESR, two part-time employees who worked 15 hours per week on average are the equivalent of one full-time employee. So, for example, an employer that employs 40 full-time employees (that is, employees employed 30 or more hours per week on average) and 20 employees employed around 15 hours per week has the equivalent of 50 full-time employees and would be subject to ESR. Minimum Essential Coverage? Minimum essential coverage, or MEC, is the type of coverage an individual needs to meet the individual responsibility requirement under the Affordable Care Act. This includes most individual market policies, job-based coverage, Medicare, Medicaid, CHIP, TRICARE and some other types of coverage. Offer coverage to your full-time employees and their child dependents, but it isn t deemed affordable (defined as employees paying more than 9.5 percent of their income for the lowest-cost, self-only coverage) However, you may avoid this penalty if you: Have between 50 and 99 full-time employees and meet certain ACA conditions Offer coverage to 70 percent of your full-time employees and their child dependents in 2015* Offer coverage to 95 percent of your full-time employees and their child dependents in 2016* Employers may still face a penalty of 3,000 per full-time employee for offering coverage that fails to meet ACA requirements if any of the full-time employees, including those who are not offered coverage at all, enroll in a subsidized health plan on the Health Insurance Marketplace. *This rule applies whether you intentionally or unintentionally don t offer coverage. 2

4 ESR Possible Scenarios These are examples of some scenarios. Please keep in mind this is for informational purposes only. ESR is between the IRS and an employer. Employers should seek guidance from tax, legal and compliance counsel to ensure they are meeting their obligations under this aspect of the health care reform law. Fred s Florist Fred s Florist has 20 part-time and 10 full-time employees and does not share common ownership with any other companies. Combined, that equals 20 full-time (or full-time equivalent) employees. Under this scenario, Fred s Florist may not be subject to ESR. First Bank of Springfield First Bank of Springfield has 90 full-time employees. However, in 2015, it won t offer MEC to any of the employees or their child dependents. Under this scenario, the First Bank of Springfield could have to pay the following penalty: 2,000 x [total number of employer s full-time employees 30 (80 for 2015)] / 12 = employer s monthly ESR penalty Or: 2,000 x (90 80) / 12 = 1,667 The 2015 ESR penalty could be about 1,667 per month. How many full-time or full-time equivalent employees do you have? Do you share a common owner with other companies? Are you offering MEC to your full-time employees and child dependents that is affordable and meets minimum value? Have you considered your potential penalty risk for not offering coverage to all or most of your full-time employees? Does your plan renew on Jan. 1? If not, your 2 group may not have to comply until the beginning of your 2015 plan year, subject to certain terms and conditions. For additional information, see the list of frequently asked questions from the IRS or the U.S. Treasury Department fact sheet. 3

5 6055/6056 Reporting Requirements ACA added reporting requirements to the Internal Revenue Code under Sections 6055 and Section 6055 reporting (minimum essential coverage, or MEC reporting) requires organizations that provide MEC, such as health insurers and self-insured plans, to report this coverage to the IRS. It also requires these organizations to report this coverage to the responsible person (your employee, for example) for use on their federal tax filings. Section 6056 reporting (Employer Shared Responsibility reporting) requires applicable large employers (generally, those with at least 50 full-time employees, including full-time equivalents) to report to the IRS information about the MEC they offered to their employees. For 2015, the deadline for providing reporting to individuals is Feb. 1, The deadline for providing reporting to the IRS is Feb. 29, 2016, or March 31, 2016, if filed electronically. Blue Cross and Blue Shield of Texas (BCBSTX) will file Section 6055 returns and furnish statements to the responsible individual for insured groups. The regulations do not require third-party administrators to report or provide support for Section 6055 reporting on behalf of their self-insured groups. We will not be reporting nor providing support for Section 6055 reporting to self-insured groups. It is also the responsibility of applicable large employers (not insurers or TPAs) to provide Section 6056 reporting to the IRS and the responsible individual. We will not be reporting nor providing support for Section 6056 reporting to the IRS for any applicable large employers. Is your organization responsible for Section 6055 or Section 6056 reporting? Consult with your legal and tax advisors to determine your responsibility under ACA. Do you employ 50 or more full-time employees, including full-time equivalents? The IRS is requiring insurers and self-insured plans to collect Social Security Numbers. You may want to encourage your employees to include that information for every person on the plan upon enrollment. 4

6 Summary of Benefits and Coverage Under ACA, all health insurers and group health plans are required to provide consumers with a Summary of Benefits and Coverage (SBC). The SBC is a summary of the benefits and health coverage offered by a particular plan. It is intended to provide clear, consistent, easy-to-digest descriptions that may make it simpler for people to understand their health insurance coverage and for consumers to shop for and compare insurance plans. It must be provided at certain specified times, such as upon application, at enrollment, annually at re-enrollment, upon request (no more than seven business days after the request), at special enrollment (must be provided within 90 days after enrollment) and when materials are changed. The SBC must include the following two statements per the federal government: Does this Coverage Provide Minimum Essential Coverage? ACA requires most U.S. citizens and legal residents to have health care coverage that qualifies as minimum essential coverage. This plan or policy [does/does not] provide minimum essential coverage. This statement lets employees know that they meet the requirement for health insurance. Does this Coverage Meet the Minimum Value Standard? ACA establishes a minimum value standard of benefits of a health plan. The minimum value standard is 60 percent (actuarial value). This health coverage [does/does not] meet the minimum value standard for the benefits it provides. This statement lets employees know that you are providing insurance that meets the minimum value standard As a reminder, BCBSTX will complete the minimum essential coverage and minimum value sections of the SBC for fully insured groups. Any carve-out benefits must be completed by the employer, as BCBSTX does not administer those benefits. Note that if at least 10 percent of the population living in a particular county is literate only in the same non-english language, translated versions must be provided in one of the four ACA-required foreign languages, as well as an English version explaining that translated versions are available. BCBSTX can provide translation services and provide the SBC in the foreign languages (Spanish, Chinese, Navajo and Tagalog) required by ACA. Blue Choice Gold PPO 001 Coverage Period: 01/01/ /31/2014 Summary of Benefits and Coverage: What this Plan Covers & What it Costs Coverage for: Individual/Family Plan Type: PPO This is only a summary. If you want more detail about your coverage and costs, you can get the complete terms in the policy or plan document at or by calling Important Questions Answers Why this Matters: What is the overall deductible? Are there other deductibles for specific services? Is there an out-of-pocket limit on my expenses? What is not included in the out-of-pocket limit? Does this plan use a network of providers? Network 3,250 Individual/ You must pay all the costs up to the deductible amount before this plan begins to pay for covered 9,750 Family services you use. Check your policy or plan document to see when the deductible starts over Out-of-Network 6,500 (usually, but not always, January 1st). See the chart starting on page 2 for how much you pay Individual/19,500 Family for covered services after you meet the deductible. Doesn't apply to certain services that charge a copay, preventive care, and prescription drugs. Yes. Per Occurrence: Network 200/Out-of-Network 300 Inpatient Admission. There are no other specific deductibles. Yes. For Network 3,250 Individual/9,750 Family For Out-of-Network 6,500 Individual/19,500 Family Premiums, balance-billed charges, and health care this plan does not cover. Yes. See or call for a list of Network Providers. Do I need a referral to see No. You don't need a referral to a specialist? see a specialist. Are there services this plan Yes. doesn't cover? You must pay all the costs for these services up to the specific deductible amount before this plan begins to pay for these services. The out-of-pocket limit is the most you could pay during a coverage period (usually one year) for your share of the cost of covered services. This limit helps you plan for health care expenses. Even though you pay these expenses, they don't count toward the out-of-pocket limit. If you use an in-network doctor or other health care provider, this plan will pay some or all of the costs of covered services. Be aware, your in-network doctor or hospital may use an out-of-network provider for some services. Plans use the term in-network, preferred, or participating for providers in their network. See the chart starting on page 2 for how this plan pays different kinds of providers. You can see the specialist you choose without permission from this plan. Some of the services this plan doesn't cover are listed on page 4. See your policy or plan document for additional information about excluded services. Did you know the SBCs are provided to you in English and Spanish? Do you know how to access your group s SBC? 5

7 Exchange Notice Exchange Notice Employers covered by the Fair Labor Standards Act (FLSA) have to provide new employees with written notice of the Marketplace. Employers are required to provide the notice to each new employee within 14 days of an employee s start date. The notice is required to be provided automatically, free of charge. It can be provided in writing either by first-class mail, or electronically if the Department of Labor s electronic disclosure safe harbor requirements are met. Pre-Existing Conditions Starting with the first plan year on or after Jan. 1, 2014, plans can t include preexisting condition exclusions for enrollees of any age. Small group employers can also visit the Department of Labor website. Employers should always seek guidance from their tax, regulatory and compliance professionals to ensure they are meeting their obligations under the health care reform law. Employers who wish to inform their employees about the different levels of coverage available on the Marketplace may find our Infographic (under Actuarial Value on Page 8) helpful. Do you have to provide the Marketplace notice? Do you have a process in place to provide the notice to new employees within 14 days of the employee s start date? 6

8 Health Insurance Marketplace In 2014, the Health Insurance Marketplace launched as a new way to buy health insurance. The Marketplace is a website where people can explore and compare a variety of health insurance plans based on budget and benefit needs, apply for coverage and determine whether they are eligible for financial assistance. If you don t provide health insurance to your part-time and/or full-time employees, the Marketplace might be a good option for them to get covered. Your employees can review insurance plans available in their area. They can apply for coverage online, over the phone or by using a paper application. Health insurance plans in the Marketplace offer comprehensive coverage, from doctors to medications to hospital visits. Individuals can compare all of their insurance options based on price, benefits and other features that may be important to them. Your employees may be able to get a premium tax credit and other cost-sharing assistance that lowers their monthly premium. Depending on their situation, they may even be eligible for a 0 premium plan. They can see what their premium, deductibles and out-of-pocket costs will be before making a decision to enroll. All plans on the Marketplace include EHBs, or essential health benefits. You can find more information about EHBs on Page 10. Open enrollment for 2015 plans began on Nov. 15, 2014, and ends on Feb. 15, Do you have any employees who are not eligible for employer coverage? Have you provided them with information about the Marketplace? There are some reasons an employee could still get coverage under the Special Enrollment Period, such as: Moving to a new area that offers different plans, or isn t covered by the employee s HMO network Marriage Birth or adoption of a child Losing health coverage due to job loss, a decrease in work hours, end of COBRA coverage or other reasons* Becoming a U.S. citizen Change in income or household status The employee s health insurance company violates its contract Loss of coverage on a family member s policy as a result of turning 26, legal separation or divorce, or death of the policy holder Becoming a member of an American Indian and Alaska Native tribe An error or other complication when trying to enroll If any of these happen, the employee will have 60 days to go to the Marketplace to enroll in a health insurance plan or change plans. 7

9 Actuarial Value You can find non-grandfathered small group plans in different levels Bronze, Silver, Gold and Platinum. These plans are available both on and off the Marketplace and are meant to make it easier for you to compare plans with similar levels of coverage. Platinum Monthly Cost Cost When You Get Care Good option if you think you might use a lot of health care services Gold Monthly Cost Cost When You Get Care Good option if you want to save on monthly premiums while keeping your out-of-pocket costs low Silver Monthly Cost Cost When You Get Care Good option if you need to balance your monthly premium with your out-of-pocket costs Bronze Monthly Cost Cost When You Get Care Good option if you don t think you ll need a lot of health care services 8

10 Small Business Resources The Small Business Health Options Program (SHOP) is for small employers (less than 50 full-time employees, including full-time equivalents, combined). For 2015, small group employers can enroll in SHOP coverage directly through BCBSTX, through their licensed agent or broker or through the Health Insurance Marketplace. Small groups may also continue to offer coverage as they do today (through a traditional group contract) or pursue alternative ways to cover their employees. Like BCBSTX s other small group products, SHOP plans offer comprehensive coverage, from doctors to medications to hospital visits. Employers can compare options based on price, benefits and other features that may be important to their employees. Plans offered through SHOP have to meet all of ACA s 2014 market reform requirements. Benefits will be offered in select metallic levels based on the amount of coverage that the plan provides. The Small Business Health Tax Credit is available to eligible small businesses and small tax-exempt employers for two consecutive tax years. For small businesses, the maximum tax credit is 50 percent of premiums paid; for tax-exempt employers, the maximum is 35 percent of premiums paid. For 2015, small employers may qualify if they employ fewer than 25 employees with an average annual wage of 51,600 or less. Employers planning to claim the Small Business Health Care Tax Credit will need to get an official eligibility determination from the federal government. Please keep in mind that BCBSTX does not process forms or applications for tax credit eligibility. Please keep in mind that small employers interested in the Small Business Health Care Tax Credit have to enroll in a SHOP health plan (and meet other eligibility requirements) in order to qualify. You can only get the Small Business Health Care Tax Credit by enrolling through the Marketplace. How many full-time employees do you have? Does your business meet the requirements for the tax credit? 9

11 Essential Health Benefits Non-grandfathered small group plans must cover basic health services, called essential health benefits (EHBs). Out-of-pocket Maximum All non-grandfathered plans that cover EHBs must limit annual out-of-pocket member expenses for in-network EHBs. ACA set 10 categories for items and services that are considered EHBs. Ambulatory patient services Hospitalization Maternity and newborn care Mental health and substance abuse disorder services, including behavioral health treatment Rehabilitative and habilitative services and devices Prescription drugs Emergency services Laboratory services The 2015 out-of pocket maximum (OOPM) is 6,600 for self-only coverage and 13,200 for family coverage. The 2014 OOPM is 6,350/12,700. The following types of member expenses must apply to the OOPM: Deductibles for in-network EHBs Coinsurance for in-network EHBs Copays for in-network EHBs (including Rx copays) Any other expenditure required by, or on behalf of, an enrollee for in-network EHBs including out-of-network emergency services. Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care Previously, insurers and self-funded plan sponsors used a good faith definition to determine which benefits are considered EHBs for the purpose of addressing dollar limits. Now and self-funded plan sponsors must use an authorized definition (authorized by the U.S. Secretary of Health and Human Services [HHS]) of EHBs to address dollar limits and to meet new out-of-pocket maximum (OOPM) requirements, if applicable. The minimum package of items and services that must be covered in each of the 10 categories will be generally defined by each state s EHB benchmark plan. Our small group health plans will cover the EHBs under their home state benchmark plans. Each state sets a benchmark for EHB benefits. Do you know which benefits in your plan are considered EHBs? In the past, only coinsurance applied to the OOPM. Now all in-network cost sharing applies to the OOPM, including deductible, copays, coinsurance, and Rx copays. 10

12 Pediatric Dental and Vision Dental and vision care are important parts of a comprehensive health plan. That s why BCBSTX offers dental and vision plans to provide critical benefits and required essential health benefits. Dental insurance plans for adults and children offer savings on preventive care like check-ups, cleanings, and basic X-rays, as well as services including fillings, bridges, and crowns. Fully insured small groups must include pediatric dental coverage as an EHB in 2015 for children up to age 19.* Employers who already offer dental to their employees under a separate plan can complete an attestation form to document that this EHB is taken care of elsewhere. Employers who do not offer pediatric dental separately can add one of BCBSTX s stand-alone dental plans to provide the required coverage. Employers who don t complete the attestation form will have a low-allocation pediatric dental plan automatically added to their policies. Pediatric dental has a separate OOPM, not to exceed 700 for coverage of one child and 1,400 for coverage of two or more children. * Pediatric dental coverage up to age 21 in Pediatric vision is also an added EHB effective in 2014 and benefits are included with the member s medical plan for dependents up to age 19 with no cost sharing. Benefits include routine diagnostic eye exams and standard lenses. This communication is intended for informational purposes only. It is not intended to provide, does not constitute, and cannot be relied upon as legal, tax or compliance advice. The information contained in this communication is subject to change based on future regulation and guidance. Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association