Explaining Changes in Coverage Requirements for Small Businesses

Jan 20, 2015

Employers offering a full-insured small group health plan are affected by the changes and coverage requirements of the Affordable Care Act – there are new taxes to pay and increasing premium rates. Here are some of the highlights:

  • Starting September 2012, carriers and group health plans are required to provide qualified participants with summary of benefits and coverage.  This is intended to help individuals to better understand their options
  • Premium rates in individual and small group markets vary per family size, geography, and age. Other rating factors such as group size, health status, medical history, gender, and industry are now prohibited.
  • Under the Affordable Care Act, employers with fewer than 50 full-time equivalent (FTE) employees are not subject to employer shared responsibility, also known as the employer mandate. The employer mandate started January 1, 2015 for employers with 100+ FTEs and January 1, 2016 for those with 50+ FTEs.
  • Any annual dollar limits or lifetime dollar limits must be removed and all fully-insured small group employers are required to cover Essential Health Benefits.
  • Deductibles for non-grandfathered small group plans must be limited to $2,000 for individuals and $4,000 for families.
  • All non-grandfathered plans that cover Essential Health Benefits must limit annual out-of-pocket costs (in-network). Coinsurance, copays, deductibles, and other expenses should not exceed out-of-pocket limits set by the IRS. Some of the out-of-pocket limits have been delayed until 2015.
  • ACA plans cannot impose a pre-existing condition exclusion for all ages.

For more information about the health care law on small businesses, click here

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