The Affordable Care Act (ACA) is a fundamental and comprehensive set of reforms aimed at extending health insurance coverage and making it affordable to almost all Americans. The ACA is designed to be implemented over a number of years, and since the law was signed on March 23, 2010, many provisions have been implemented. Some of the key provisions of the ACA already in effect include:
- Dependent coverage to age 26
- No lifetime limits and restrictions on annual limits
- First dollar coverage for preventive health services
- No pre-existing conditions provisions for dependents up to age 19
- Insurers are prohibited from rescinding coverage except in instances of fraud or intentional misrepresentation of material fact
- Medical Loss Ratio rules
- Uniform Summary of Benefits and Coverage (SBC)
- Tax credits for small businesses providing health insurance to employees
Key Provisions Being Implemented in 2013
Two specific provisions that impact employers and brokers are as follows:
- Flexible Spending Accounts
Effective for plan years beginning on or after January 1, 2013, employee contributions to Health Flexible Spending Accounts are limited to $2,500 per plan year
More information on Flexible Spending Account Changes
- Notice to Employees about Exchanges
By March 1, 2013, employers must provide current employees and new hires certain information about the exchanges, including:
New ACA Employer Notification Requirements
- The availability of coverage through Exchanges
- Possible eligibility for premium tax credits and/or cost sharing reductions
- Potential loss of employer contributions, if any
- HHS expected to issue model notice
Key Provisions Being Implemented in 2014
2014 will see a number of key provisions implemented as part of the Affordable Care Act, including:
- Establishment of Insurance Exchanges
Exchanges will be established in each state as a method through which individuals and small groups can purchase insurance.
- Individuals required to have basic insurance plan
Individuals who can afford to buy health insurance, with certain exceptions, will be responsible to obtain a basic coverage plan. If they fail to do so, they will have to pay phased-in tax penalty for noncompliance. However, if affordable coverage is not available to an individual, he/she may be qualified as exempt from this provision.
- Employer “Shared Responsibility” Requirement
“Applicable Large Employer” that employed an average of “50 or more full-time equivalents” during the previous calendar year must offer “affordable” health coverage of “minimum value” or pay a “shared responsibility” penalty. (Please note: Implementation date changed from January 1, 2014 to January 1, 2015.)
- Coverage for Individuals Participating in Clinical Trials
Insurers must cover routine patient costs associated with certain approved clinical trials relating to cancer or other life-threatening conditions.
- Insurers may not refuse to sell or renew policies based on pre-existing conditions.
- Prohibition of Annual Dollar Caps on Essential Health Benefits in the Individual and Small Group Markets
- Phase 2 of Tax Credits for Small Businesses
Small businesses (fewer than 25 employees) that choose to provide health insurance to their employees may receive increased tax credits of up to 50% of the cost of health insurance to employees. Non-profits may receive tax credits of up to 35% of the cost of insurance.
- Voluntary Establishment of Wellness Programs and Incentives
For more information, view The Affordable Care Act and Wellness Programs Fact Sheet from the Department of Labor
- A Flexible Spending Account (FSA) is a tax-deferred savings account established by an employer to help employees meet certain medical and dependent-care expenses that are not covered under the employer's insurance plan. Established under Section 125 of the Internal Revenue Code, FSAs were once known as medical Individual Retirement Accounts (IRAs). FSAs allow employees to contribute a limited amount of pre-tax dollars to an account set up by their employer. They can later withdraw these funds tax-free to pay for qualified health insurance premiums, out-of-pocket medical costs, day care provider fees, or private pre-school and kindergarten expenses.
FSAs can provide an attractive benefit for many employees, and they can also offer tax savings for both employees and employers. As the cost of providing health insurance to employees has
risen rapidly over the last decade, many companies have greatly increased the employee portion of the insurance premium. Co-pays and deductibles have increased as well in an attempt to manage the overall premium cost. The use of a health care FSA is one way in which employers may help their employees to self-fund with tax-free dollars the growing costs that they are asked to bear for their partial company-funded health insurance.
- Exchanges are new organizations being established with the goal of creating a more organized and competitive market for buying health insurance. They will offer a choice of different health plans, certifying plans that participate, and providing information to help consumers better understand their options.
Beginning in 2014, Exchanges will serve primarily individuals buying insurance on their own and small businesses with up to 100 employees, though states can choose to include larger employers in the future. A state can itself operate an Exchange—which can be a government agency or a non-profit organization, can partner with the federal government to run the exchange, or can opt to have the federal government facilitate the exchange in that state.
We have created this site to assist our brokers and employer groups in getting up-to-date information on Health Care Reform at both the national and state level. We are limiting the information provided here to just those issues that we believe will have a direct impact on the commercial group insurance market and our brokers, employers, and members. The information we provide will be a mixture of news story links, our own analysis, and links to government websites. We will be continually updating this site and will send out regular updates of issues as they surface.
The information on this website provided for informational purposes only. While we aim to ensure that content is current, accurate, and complete, Tufts Health Plan makes no representations or warranties regarding its accuracy or completeness and the information provided should not be construed as legal or tax advice or as a recommendation of any kind. Please consult your own legal counsel and/or tax and benefit plan advisors with respect to your individual circumstances and needs.