How the ACA Is Shaping Benefit Plans

The Affordable Care Act (ACA) is driving three trends in the workplace: increased outsourcing; reliance on private exchanges; and consideration of self-insurance. The study by the Guardian also finds that 60% of employers need guidance on managing their responsibilities under the Affordable Care Act (ACA).

Employers need help with new administrative and compliance requirements. They also need help with offering employees benefit choices and enhancing the enrollment experience while controlling costs and funding. Sixty-one percent of employers say that preparing for a post-healthcare reform era is a highly important benefit objective, but only 40% say they are prepared to meet this objective. Ray Marra of the Guardian said, “Brokers and carriers are needed to play a strategic role in helping employers navigate the ACA and in identifying the best options for how they can move forward in a changed benefit landscape. As employers adapt to the ACA, we’re seeing greater adoption of private exchanges and self-funded medical plans paired with stop loss insurance.”

One in three employers expects to outsource more aspects of their benefit program as a result of the ACA. Nearly 70% of employers expect compliance and administrative burdens to grow. About 20% of employers expect to offer benefits on a private exchange in the next year. Top reasons are to increase employee choice and to improve the employee experience. Fifty-eight percent those who are thinking of self-insuring say that the ACA is the impetus. Half of those planning to self-insure expect to carry stop-loss insurance. Self-insuring medical plans is a less common funding option for smaller firms, but it’s getting more attention due to the ACA. Seventy-eight percent of employers expect benefit cost increases, due to the ACA

Administration reverses proposed MA cuts

The CMS announced Monday that it would raise payments to insurers providing Medicare Advantage plans by 0.4%, ending plans for a 1.9% average planned reduction. The cuts “would have been disproportionate, hurting seniors who would lose doctors or pay more. We’re glad the administration heeded our call and reversed the policy,” Sen. Charles Schumer, D-N.Y., said. Reuters (4/7), The Hill/Healthwatch blog (4/7), Modern Healthcare (subscription required) (4/7)

Administration delays health coverage parity provision

The Internal Revenue Service will delay enforcing a provision of the Affordable Care Act that penalizes employers that provide more extensive health care coverage to executives than to other employees. The agency has not issued regulations for that portion of the law. The New York Times (tiered subscription model) (1/18)

States, feds brace for choppy opening of ACA exchanges

The computer systems on which the Affordable Care Act’s health insurance marketplaces are based must communicate with a data hub that pulls information from the Department of Homeland Security and the Internal Revenue Service to confirm income, employment status and citizenship. Developers facing tight deadlines have not been able to test the systems, leading some states to delay certain features, and the Obama administration has warned about bugs and glitches when the exchanges go online. The Washington Post (tiered subscription model) (8/24)

Administration Releases New Rules To Implement Health Law’s Individual Mandate

by Mary Agnes Carey

Reprinted with permission from Kaiser Health News (kaiserhealthnews.org.)

As congressional Republicans push for a delay in the 2010 health law’s individual mandate, the Obama administration announced final regulations implementing the requirement that most Americans have health insurance coverage by Jan. 1 or pay a fine.

The document from the Treasury Department and the Internal Revenue Service is in addition to regulations the Department of Health and Human Services published in late June.

The regulations specify nine categories of individuals who are exempt from the mandate, including people who can’t afford coverage or taxpayers whose income is so low they don’t have to file a tax return, according to a fact sheet from the agencies. People in jail or who are not in the country lawfully are also exempt, as are individuals who experience a coverage gap of three months or less.

When filing 2014 taxes in 2015, individuals must say on their returns if they have health insurance coverage and, if not, pay a fine. The individual penalty is the greater of $95 or 1% of income, rising to the greater of $695 or 2.5% of income, in 2016. The Congressional Budget Office estimates that less than 2% of Americans who don’t have health insurance will pay the fine.

In July, the Obama Administration delayed for one year a provision in the health law that employers with 50 or more workers offer coverage to employees or pay a fine. Republicans said that if the administration delayed the employer mandate for a year, individuals should also get a reprieve from the health law’s individual mandate set to begin next January. In July, the House of Representatives passed legislation to delay the individual mandate requirement for a year, but the measure is not expected to come to a vote in the Senate.

Tuesday’s announcement from Treasury and the IRS — along with the final individual mandate regulations that HHS issued in June — make it clear that the administration is moving ahead with implementing the individual mandate, which has become one of the law’s most politically explosive elements. House Republicans have tried to repeal or defund the law 40 times on the House floor and more votes are likely this fall.

Supporters of the law and many health care economists say that the requirement that most Americans have coverage or pay a fine is critical to making the law work as intended.

The individual mandate is one of two lynchpins that make the Affordable Care Act work, Washington state Insurance Commissioner Mike Kreidler said in a statement. You simply cannot guarantee everyone coverage — regardless of their health status — without also requiring that everyone participate. The individual mandate guarantees personal responsibility. Without it, there’s nothing to prevent people from only buying health insurance when they need it — which is similar to allowing people to buy homeowners insurance when their house is on fire.

America’s Health Insurance Plans, a trade group representing health insurers, wants the health law’s tax on health insurance plans repealed but supports the individual mandate.

There is broad agreement that requiring health plans to cover everyone, including those with pre-existing conditions, cannot work without an individual mandate, the group said in a statement. By requiring all Americans to get health coverage, the risk pool becomes large enough to account for the sickest Americans, without the adverse effect of skyrocketing premiums.

Administration Issues Proposed Rules Implementing the ACA

The Obama administration issued a proposed rule that, beginning in 2014, prohibits health insurance companies from discriminating against individuals because of a pre-existing or chronic condition. Under the rule, insurance companies would be allowed to vary premiums within limits,  based only on age, tobacco use, family size, and geography. Health insurance companies would be prohibited from denying coverage to any American because of a pre-existing condition or from charging higher premiums to certain enrollees because of their current or past health problems, gender, occupation, and small employer size or industry. The rule would ensure that people for whom coverage would otherwise be unaffordable and young adults have access to a catastrophic coverage plan in the individual market. For more information regarding this rule, visithttp://www.healthcare.gov/news/factsheets/2012/11/market-reforms11202012a.html.

The administration also issued proposed rule outlining policies and standards for coverage of essential health benefits while giving states more flexibility to implement the Affordable Care Act. Essential health benefits make up a core set of benefits that would give consumers a consistent way to compare health plans in the individual and small group markets. A companion letter on the flexibility in implementing the essential health benefits in Medicaid was also sent to states. For more information regarding this rule, visit http://www.healthcare.gov/news/factsheets/2012/11/ehb11202012a.html.

In addition, the administration issued a proposed rule implementing and expanding employment-based wellness programs to promote health and help control health care spending while ensuring that individuals are protected from unfair underwriting practices that could otherwise reduce benefits based on health status. For more information regarding this rule, visithttp://www.healthcare.gov/news/factsheets/2012/11/wellness11202012a.html.

Last Updated 09/22/2021

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