Is the Affordable Care Act (ACA) working?
That may depend on your political point of view, but based strictly on the numbers, it appears to be a success.
About 8 million people have signed up for private insurance in the Health Insurance Marketplace thus far and as of February, another 3 million were enrolled with Medi-Cal, Medicaid and the Children’s Health Insurance Program (CHIP).
Nationwide, up to 129 million Americans with pre-existing conditions — including as many as 17 million children — no longer have to worry about being denied health coverage or being charged higher premiums because of their health status.
In addition, 71 million Americans with private insurance have gained coverage for at least one free preventive health care service such as mammograms, birth control or immunizations.
Smart Business spoke with Ron Filice, president and CEO of Filice Insurance, about progress toward implementing the ACA and what employers need to keep in mind going forward.
What is the employer mandate?
Employers with 50 or more full-time equivalent (FTE) employees are required to offer their employees ‘affordable’ coverage that meets the law’s minimum essential coverage requirements. If they do not and a FTE employee receives a premium tax credit under an exchange, the employer may be subject to the ACA’s shared responsibility penalty.
According to final regulations issued by the U.S. Treasury Department on Feb. 10, employers with at least 50 but fewer than 100 FTE employees will not be required to comply with the employer shared responsibility provision of the ACA until Jan. 1, 2016. Employers with at least 100 FTE employees will be required to comply with this provision beginning Jan. 1, 2015.
What are the four steps that employers need to take to ensure compliance in 2015?
Determine if you are an applicable large employer. Do you ‘reasonably expect’ to employ an average of 100 or more FTE employees during any consecutive six-month period in 2014? A FTE employee is based on a work week of 30 or more hours. Part-time employees are counted by taking their total number of monthly hours worked divided by 120. Proprietors, partners and shareholders should be counted if they also work as an employee.
If you work with seasonal employees or employees with variable hours, your company may meet the safe harbor for variable employees, which can provide you with some cost control. However, it is recommended that you have a good policy in place that specifically outlines who qualifies as a seasonal or variable employee. Consultants can help you write a policy and outline the risks.
Determine your date of compliance. You may be able to delay the mandate until your benefit policy renewal date. There are some rules around this so be sure that you meet the requirements. Also, ensure you have systems in place for required reporting.
As the cost of health insurance continues to rise, what should employers consider to help control or better manage these increases?
If you have a large number of uninsured employees, perform a thorough analysis to gauge what your new cost exposure will be. Work with a consultant that has a strong individual outreach program with Medi-Cal and individual plan enrollment assistance, especially if you have a large population of low-income and/or part-time employees.
Find a consultant that provides in-depth analysis related to claim utilization, population management, clinical outcomes and formal processes to address health care risk so as to mitigate future exposure. This type of analysis will also give you more negotiating power with insurance carriers.
You may also want to consider alternative funding vehicles to maximize your benefit dollars. Keep your employees engaged and educated to reduce overall costs.
Devise a three-year benefits strategy that is aligned with your business objectives. The insurance industry continues to add more components and options to its packages. It’s imperative to get with an experienced benefit consultant that has the bandwidth, expertise and software to provide your company with the services that meet your evolving needs.
Insights Insurance is brought to you by Filice Insurance
