The Affordable Care Act requires plans and issuers that offer dependent coverage to make the coverage available until the adult child reaches the age of 26, even if the young adult no longer lives with his or her parents, is not a dependent on a parent’s tax return, or is no longer a student, is married, or has another offer of employer-based coverage (through his or her own job).
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The employer shared responsibility provisions, found in section 4980H of the Internal Revenue Code, says that an applicable large employer (one with 50 or more full-time equivalent employees) must offer minimum essential coverage that is both affordable and provides minimum value to its full-time employees or face a tax penalty.
The Affordable Care Act ensures Americans have access to quality, affordable health insurance. To achieve this goal, the law ensures that health plans offered in the individual and small group markets, both inside and outside of Health Insurance Marketplaces, offer a core package of items and services, known as “essential health benefits.” There are 10 categories of essential benefits that must be covered, and additional essential benefits are added in each state depending on the reference plan selected.
Section 1512 of the Affordable Care Act creates a new Fair Labor Standards Act (FLSA) section 18B requiring a notice to employees of coverage options available through the Marketplace. The “Notice of Coverage Options” must be provided to all employees, whether eligible for group health coverage or not, within 14 days from their date of hire.
Before and after the passage of the Affordable Care Act, President Obama has repeatedly said “if you like your health plan, you can keep it”. Though it was misunderstood by many consumers, media outlets, and even our elected officials, there is a provision in the law that allows plans that were in place when the law was signed on March 23rd, 2010 to be “grandfathered” and avoid many of the new market rules, most of which went into effect on the plan’s renewal date in 2014.
One of the most important components of the Affordable Care Act is the Health Insurance Marketplace, originally called the Exchange. The Marketplace is an online shopping portal that allows consumers to shop for qualified plans and to apply for financial assistance in the form of premium tax credits and cost-sharing subsidies.
Starting in 2014, Section 5000A of the Affordable Care Act — the Individual Shared Responsibility provision — calls for each individual to either have minimum essential coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.
Beginning in 2011, the law requires insurance companies in the individual and small group markets to spend at least 80 percent of the premium dollars they collect on medical care and quality improvement activities. Insurance companies in the large group market must spend at least 85 percent of premium dollars on medical care and quality improvement activities. Insurance companies that do not meet the MLR standard will be required to provide rebates to their consumers.
Multiple Employer Welfare Arrangements (MEWAs) are established for the purpose of offering health coverage and other benefits to the employees of two or more employers (including self-employed individuals). MEWAs are typically marketed to small employers as a low-cost alternative to traditional forms of health insurance. The Affordable Care Act amended ERISA to require MEWAs to register with the Secretary prior to operating in a State.
To avoid shared responsibility penalties under section 4980(b) of the tax code, applicable large employers must provide minimum essential coverage that is both affordable and provides minimum value. Generally, a minimum value plan is one with an actuarial value of at least 60% and provide hospitalization coverage.
PHS Act section 2708 provides that, for plan years beginning on or after January 1, 2014, a group health plan or health insurance issuer offering group health insurance coverage shall not apply any waiting period that exceeds 90 days, though there can be a reasonable orientation period before the waiting period begins. The new hire waiting period is different from the limited non-assessment period under the employer mandate.
Section 10101(d) of the Affordable Care Act adds § 2716 to the PHS Act, which provides that a group health plan (other than a self-insured plan) must satisfy the substantive nondiscrimination requirements of § 105(h)(2) of the IRS Code. The Departments have determined that compliance with § 2716 should not be required (and thus, any sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued under § 2716, and those have not yet been issued.
The Patient Protection and Affordable Care Act created a number of new patient protections, many of which became effective with the first renewal on or after September 23, 2010. Other patient protections become effective on the plan’s first renewal date in 2014. Some of these changes are grandfathered, meaning that a plan in effect on March 23, 2010 does not have to implement them, while others are non-grandfathered and must be included in all plans.
Section 2713 of the Public Health Service Act, as added by the Patient Protection and Affordable Care Act, requires coverage without cost sharing of certain preventive health services, including certain contraceptive services, in non-exempt, nongrandfathered group health plans and health insurance coverage. This requirement was effective for non-grandfathered plans with the first renewal on or after September 23, 2010.
This Affordable Care Act creates a tax credit to help small businesses and small tax-exempt organizations afford the cost of covering their employees and is specifically targeted for those with low- and moderate-income workers. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. While not very popular, companies with up to 25 EEs and $50k in wages can get a tax credit.
requires all group health plans and health insurance issuers offering group health insurance coverage to provide applicants, enrollees, and policyholders or certificate holders with a summary of benefits and coverage that “accurately describes the benefits and coverage under the applicable plan or coverage.” Willful failure to provide the information required under this section can result in a $1,000 fine plus a separate fine for each individual or entity for whom there is a failure to provide an SBC.
The Affordable Care Act creates new incentives and builds on existing wellness program policies to promote employer wellness programs and encourage opportunities to support healthier workplaces. The law increases the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan (and any related health insurance coverage) from 20 percent to 30 percent of the cost of coverage and up to 50 percent for wellness programs designed to prevent or reduce tobacco use.