Mom Always Said, “Don’t Chew On Ice Cause It Could Break Your Teeth”
We’ve heard a lot about how the Patient Protection and Affordable Care Act (PPACA or ACA) is supposed to help the millions of uninsured/under-insured Americans come January 2014, but we haven’t heard much about how Dental and Vision Plans fit into the new mandated Health Insurance Exchange (or Marketplace). I recently came across an article by Karen Gustin, Ameritas, highlighting ten essential facts about the ACA’s Dental and Vision benefits (aimed at small employers with less than 50 employees) or individual purchasers).
1. Dental and vision requirements. Dental and vision benefits sold in stand-alone policies are not subject to most ACA provisions. Only pediatric dental and vision benefits are part of Essential Health Benefit Packages, which are required to be offered to individuals and small employers.
2. Employers can keep current benefits. Employers are not required to purchase any health coverage for employees and their dependents through a health insurance exchange. Employers may keep their current medical, dental and vision benefits with the same insurance carriers.
3. Understand changes with Essential Health Benefits. Essential Health Benefits (EHBs) feature 10 categories of health care services, including pediatric oral and vision care. EHBs must be offered to individuals and small groups both inside and outside the marketplace exchanges.
4. Penalty for no health coverage. If individual consumers choose not to purchase health benefits, they may be assessed a penalty – either a flat rate penalty or 1% of their income, whichever is higher.
5. Dental and vision coverage changes. In an Exchange, medical plans with dental or vision coverage might cover only children. If so, adults will need to purchase separate dental and vision plans. Make sure you understand what is specifically offered and who is covered in the plan you are selecting.
6. Dental and vision embedded in a medical plan may not meet expectations. A medical plan offering dental coverage may seem cheaper (one premium), but likely it has a large combined deductible, and non-preventive dental expenses may not be covered until the medical deductible is satisfied. The high out-of-pocket maximum for medical must be reached before covered pediatric dental or vision would be paid in full.
7. Tax credits and subsidy restrictions. Employers with fewer than 25 employees may receive tax credits for medical coverage only. This credit is available only when purchasing within an exchange beginning 2014. Only individuals who purchase benefits in the Exchange can obtain premium tax credits to help with medical premiums. This subsidy will be applied to the medical coverage first and may not be large enough to cover dental benefit costs.
8. Exchange shopping may be restrictive. Benefit selections will be limited to set plans and selected insurance carriers.
9. Plan comparisons may be difficult. Employees seeking additional or separate coverage from their employer’s plan should know exactly what procedures both plans cover. Look for benefits that properly supplement employer plans to avoid losing overall coverage.
10. Exchanges may be expensive. Plans offered in an exchange may not be cheaper than those offered by an insurance carrier in the private, open market. In an Exchange, plan premiums are based on specific criteria instead of utilization trends within an employer’s industry or claim experience. Since insurance carriers will be charged by state and federal governments to participate in exchanges, these fees likely will be included in the premium cost.
