Coming To You in 2014: The ACA and It’s Top 15 Requirements

As it gets closer and closer to 2014 with some of the biggest requirements to take place under the Patient Protection and Affordable Care Act (PPACA, ACA, or Obamacare), it seems like fewer and fewer people understand or even know how the ACA will affect them. We’ve talked quite a bit about the new health insurance marketplace (or exchange) over the last few months and how every legal American will be required to have health insurance by 2014. There are several more requirements soon to take affect that you may not be aware of…partly because they affect large businesses. So, while you may not know about these specific requirements you can bet your employer is scrambling to try to figure out how to implement the changes so that everyone wins. The following list highlights the 15 provisions that will take affect n 2014.

1. Health Insurance Nondiscrimination Requirements: Code Section 105(h) currently taxes the benefits received by highly compensated employees under discriminatory self-funded health plans. PPACA has extended these nondiscrimination rules to insured plans. Grandfathered plans are exempt from this rule.

2. State Health Insurance Exchanges: Each state must establish a health insurance exchange (either state or federally run) for use by the un-insured/under-insured and small employers with 100 or fewer employees (states may set the cap at 50 employees).

3. State Health Insurance Exchange Tax Subsidies: Individuals who do not have affordable minimum essential coverage from their employer will be eligible for tax credit subsidies for their health insurance purchase on a state/federal exchange if their income is below 400% of federal poverty level.

4. Employer Mandate (Pay or Play) Tax Penalties: Employers with fifty or more full-time equivalent (FTE) employees will be required to offer their FTEs minimum essential health coverage or pay a fine of up to $2,000 per year for each FTE in excess of thirty FTEs if any employee receives a premium tax credit on a state health insurance exchange.

5. Individual Mandate Tax Penalty: Individuals are required to obtain minimum essential health coverage for themselves and their dependents or pay a penalty tax if they go without coverage. The penalty for one person is either $95 or 1% of their gross income for 2014. The penalty and percentage increases each year thereafter.

Minimum essential coverage includes Medicare, Medicaid, CHIP, TRICARE, individual insurance, grandfathered plans, and eligible employer-sponsored plans.

6. Automatic Enrollment: Employers with more than 200 employees who maintain one or more health plans must automatically enroll new full-time employees in a health plan. The employer must give affected employees notice of this automatic enrollment procedure and an opportunity to opt out.

7. Pre-Existing Condition Exclusion Practices Eliminated: Pre-existing condition exclusions no longer will be allowed in group health plans or individual insurance policies, not even the limited exclusions previously allowed under HIPAA.

8. Ninety-Day Maximum Waiting Period: Group health plans and health insurance issuers may not impose waiting periods of more than ninety days before coverage becomes effective. This also applies to grandfathered plans.

9. Cost-Sharing Limits: Group health plans, including grandfathered plans, may not impose cost-sharing amounts (i.e., co-pays or deductibles) that are more than the maximum allowed for high-deductible health plans.

10. Annual or Lifetime LimitsGroup health plans, including grandfathered plans, may no longer include more than restricted annual or any lifetime dollar limits on essential health benefits for participants.

11. Wellness Program Health Plan Discount: The maximum premium discount an employer can offer under its health plan for participation in a wellness program is 30%.

12. Coverage for Those in Clinical Trials: Insurers and health plans, unless grandfathered, may not discriminate against an individual for participating in a clinical trial.

13. Employer Minimum Essential Coverage Reporting: All employers providing minimum essential coverage must file information with the IRS and plan participants.

14. Large Employer Health Information Reporting: Large employers and employers with at least 50 FTE employees must submit annual health insurance coverage returns to the FTEs and the IRS.

15. Medicaid Expansion: The U.S. Supreme Court in effect ruled that the requirement for states to offer Medicaid benefits to all persons with incomes at or below 133% of the federal poverty level is optional with each state.

(This blog was excerpted from Al Martin, J.D., LL.M., article and his book “Healthcare Reform Facts”)

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