Healthcare Reform

Healthcare Reform, the Affordable Care Act

How it affects Individuals and Businesses

It takes constant dedication to keep up with the newest health care reform regulations. SPC has the training and resources necessary to keep you informed of all of the latest changes to ensure you are prepared, especially when it comes to the most recent healthcare reform, the Affordable Care Act (ACA).

We ensure employers comply with the ACA with the following services:

  • Design benefits to meet the requirements of the ACA
  • Assist with ACA reporting
  • Provide employer training and education on complying with the ACA
  • Handle all employee forms and notices, and more

For you convenience, we have listed some (but certainly not all) highlights of the new law and how it may impact employers and individuals under 65.

Highlights of the ACA

For Individuals and Businesses

Tax Penalties

EMPLOYERS: Employers who have more than 50 full-time equivalent employees must offer their employees benefits that pay for 60% of the minimum essential benefits. Employers will incur a penalty for non-compliance. The penalty amount is $2,140 per year, multiplied by the number of full-time employees which excludes the first 30 employees. The penalty is increased each year by the growth in insurance premiums. Employers also incur a penalty when at least one of their employees receives a premium tax credit in the Health Insurance Marketplace (Exchange).

INDIVIDUALS: From 2014 through 2018, Individuals were subject to a tax penalty if they did not have qualifying health insurance. Note, this mandate was repealed for 2019 and beyond. Following is information on the Individual Mandate prior to being repealed. The tax penalty is $695 for each adult, with an additional $347.50 for each child, or a maximum family penalty of 2.5% of income, or three times the adult penalty, which is $2,085 (whichever is greater). Penalties are applied on your annual tax return.

New Approval Guidelines

  • No pre-existing clause. Insurance companies can no longer increase rates or deny coverage because of a pre-existing condition.
  • Dependents up to age 26 may be added to an insurance policy for both individuals and employer coverage.
  • Gender is no longer a factor in determining rates.
  • Renewal rates are the same as new business rates.
  • Waiting period should not exceed 90 days.

Open Enrollment Period

November 1st through December 15th

Individuals must purchase their health insurance during the annual open enrollment period. Failure to do so may result in your having no coverage for the following year and having to wait until the next year’s open enrollment to sign up for coverage. However, you may enroll in a health insurance plan outside of the annual open enrollment dates if you have a qualifying event.

You can still sign up for health insurance after the deadline if you meet any of the following qualifying events:

  • change in legal marital status
  • a change in the number of dependants
  • a change in place of residence and the current carrier is not available
  • significant cost or coverage change
  • a change in coverage of a spouse or dependant
  • a COBRA qualifying event
  • legal judgements, decrees and orders
  • entitlement to Medicare or Medicaid

Qualifying Coverage

For Individuals, available health plans, on and off the marketplace, contain at least 60% coverage of the “essential benefits” listed below.

And, employers may be subject to a tax penalty if they do not offer benefits to their employees that cover at least 60% of these “Essential Benefits” of the ACA (please see tax penalty above).

Specifically, to be in full compliance with the law, your insurance policy must cover at least 60% of the costs of the following essential benefits.

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Prescription Drugs
  • Mental health and Substance Abuse disorder services
  • Rehabilitative and habilitative services and devices
  • Pediatric services, including oral and vision care
  • Preventive and wellness services, and chronic disease management

Premium Tax Credits

Small Business and Individuals may be eligible for a tax credit under ACA healthcare reform laws. Thus, the credit is applied as a discount on your monthly insurance premium. Accordingly, to see if you are eligible for a tax credit, please use the Subsidy Calculator provided by the Health Insurance Marketplace. Or, if you are a business, use the Small Business Tax Credit Calculator provided by the Health Insurance Marketplace. In any case, both businesses and individuals must purchase benefits through the Health Insurance Marketplace to secure their tax credit.

Related Resources

To help you with Healthcare Reform

The consultants at SPC are continually educating themselves to stay abreast of new laws, regulations and legislation within the healthcare and healthcare insurance industries. We can help you stay compliant, while reducing costs.

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