Last month marked the 3-year anniversary of the Affordable Care Act (Health Care Reform). While changes continue to be made to the requirements for employers and group health plans, here’s a look at three of the most common questions and answers over the past few years:
1. Are all companies required to provide health insurance to employees?
Under Health Care Reform, small employers are not penalized for choosing not to offer coverage to any employee. Beginning in 2014, large employers–generally those with at least 50 full-time employees and full-time equivalents–may be required to pay a penalty if they do not offer affordable health insurance that provides a minimum level of coverage to their full-time employees.
2. What notices must be provided to employees under Health Care Reform?
Employers and group health plans are required to provide a number of informational notices to employees and other individuals eligible for benefits under the plan. Some of the key notices include:
- Disclosure of Grandfathered Status (grandfathered plans only)
- Notice of Patient Protections (non-grandfathered plans only)
- Summary of Benefits and Coverage or SBC (grandfathered and non-grandfathered plans)
In addition, future guidance is expected to establish the new compliance date for all employers to provide employees with notice regarding Health Insurance Exchanges (currently delayed). Additional notice requirements may apply depending on an employer’s plan or when specific events occur.
3. How does a plan maintain ‘grandfathered status’ and why is it significant?
A ‘grandfathered plan’ is a group health plan in existence as of March 23, 2010 (the date Health Care Reform was signed into law) that has not made certain significant changes that either reduce benefits or increase out-of-pocket costs for individuals covered under the plan. Grandfathered group health plans are not required to comply with certain requirements under Health Care Reform, such as coverage of preventive services without cost-sharing.
In addition to not making any prohibited changes that reduce benefits or increase costs, in order to maintain status as a ‘grandfathered plan,’ a group health plan must make specific disclosures in its plan materials, as well as maintain certain records necessary to verify, explain, or clarify its status as a grandfathered health plan.
For more information, contact G.R. Reid Healthcare & Benefit Services.