Businesses, both large and small, soon will experience many changes regarding health insurance offered to employees, as the federal Affordable Care Act continues to roll out.
Representatives from about a dozen local businesses attended a seminar sponsored by AmeriCU on Tuesday at the Hampton Inn, Commerce Park Drive, to learn about the various health insurance plans and what their and their employees contributions toward those plans could be.
Erick B. Bond, a benefits consultant with AmeriCUs broker, Bond Financial Network, Rochester, explained a multitude of facts, including direct and indirect costs, what determines a business to be large or small, new products, essential health benefits, premiums versus risks and plan examples.
For some of you, your existing plans are going away, he said. It might be a small tweak, or a bigger change.
The whole process, he said, starts with determining whether a business is large or small. The federal act defines a large employer as having 50 or more full-time equivalent employees. Large employers soon will be subject to penalties if they do not adopt a plan. The federal act, he said, defines a small business as having fewer than 50 full-time equivalent employees. Small employers will not receive penalties, he said.
Mr. Bond said if a company decides to drop its coverage, it must distribute letters to employees at least 10 days prior to coverage termination.
Employees then may select a plan on their own through the health insurance marketplace.
Mr. Bond said employers may determine what theyll contribute toward an employees plan, and how many plans the company may offer to employees.
Plans for everyone are on levels of bronze, silver, gold and platinum, and as such, their premiums, out-of-pocket costs, deductibles, copays and other specifics vary. Deductibles at the bronze level may go as high as $10,000 per family, but people may pay only $884.18 monthly for a full family premium on an MVP plan. At the platinum level, that annual deductible might be only $6,000 per family, but the premium for the MVP family plan would be $1,688.54 per month.
Premiums, deductibles, copays and other rates are different in each plan.
According to the Internal Revenue Service, coverage under an employer-sponsored plan is affordable to a particular employee if the employees required contribution to the plan does not exceed 9.5 percent of the employees household income for the taxable year. An IRS document about the act went on to say, Because affordability is determined by reference to household income and because household income is determined by reference to variables that are generally unknown to an employer, employers may encounter practical difficulties in assessing whether the coverage they are offering is affordable to certain employees.
Any employee whose family income makes its premiums unaffordable by the federal measure of 9.5 percent of household income is free to seek a cheaper insurance outside the company plan. The company is not penalized under the act for employees who go outside for coverage. Starting next year, he said, employees who do not receive affordable coverage from their employer may apply for a subsidy tax credit through the exchange, which would help lower their premium.
Companies may keep their existing plans, but there could be various changes. Mr. Bond said the federal act will help provide comprehensive coverage, continued access to local and nationwide networks, preventive services covered in full, prenatal services covered in full, with the exception that there will be a charge for deliveries, diagnostic labs that are no longer covered in full on copay plans and essential health benefits. The latter includes some new services, such as pediatric oral and vision care.
Because there is much information to tell employees, Mr. Bond said, employers should offer their employees education about the changes.
Up until now, theres not been a law requiring you to have coverage, he said. Make sure you provide a support system to employees.
That includes informing them of possible penalties they will pay if they decline health insurance coverage. Mr. Bond said penalties for individuals could reach as high as several hundred dollars.
Lynda Jackson, owner of Freds Quick Lube, Clayton, said one of her three employees, and many customers who work in local businesses, said they may just opt to pay the penalty versus a plan with a high premium or deductible.
Details of plans, formulas, penalties and other information can be provided by benefits consultants, such as Mr. Bond, and information can be explained by navigators within community-based agencies. For more information, businesses also can call Ray Acosta, with AmeriCU, at 356-3294.