How can you tell if the healthcare plan you’re offering employees is Obamacare-compliant? It’s a question we get a lot, and with good reason. With a myriad of rules, regulations and recent health reform updates, the Affordable Care Act (ACA) can be pretty confusing. But it’s worth sorting through the requirements to determine if you’re on the hook for providing an ACA-compliant health care plan to at least 90% of your team.
So what does ACA compliance look like? The plan itself must cover certain “essential health benefits” as defined by the Obamacare regulations. And the plan must meet stringent affordability requirements and out-of-pocket maximums. How does your plan stack up?
The Essential Health Benefits Required by the Affordable Care Act
According to HealthCare.gov (the official online resource for the ACA), an ACA-compliant health plan must cover the following services:
- Outpatient, emergency services and hospitalization coverage
- Pregnancy, maternity and newborn care; contraceptive services and counseling for women as prescribed by a healthcare provider; and breastfeeding equipment and counseling for pregnant and nursing women
- Prescription drugs
- Rehabilitative and habilitative services
- Laboratory services
- Preventive, wellness and chronic disease management
- Pediatric services (including dental, oral and vision care)
Obamacare Affordability Requirements
Your employee health plan must also meet three affordability requirements to be considered ACA-compliant:
1) The employee’s contribution for self-only coverage (not including additional family members) must not be more than 9.5% of his or her income;
2) The plan must cover at least 60% of the employee’s covered medical expenses; and
3) The total out-of-pocket maximums (OOPs) for 2016 must not exceed $6,850 for individual coverage or $13,700 for families.
Businesses do have options to help ensure they’re providing a compliant healthcare plan to employees, ranging from hiring an in-house specialist, to outsourcing all aspects of their healthcare plan. Included in the latter option is working with a Professional Employer Organization (PEO) that offers compliant healthcare plans. The PEO manages the group health plan, which immediately reduces employee-related liability risks for the small business and often results in plans with better benefits at lower costs for both the business and its employees. PEOs also offer additional services related to the management of staff, too.
The best solution for small- and medium-sized businesses that want to ensure they’re Obamacare compliant is to consult with an ACA-certified professional. Stratus.hr handles ACA insurance administration for thousands of employees and has ACA-certified professionals with answers to your questions. For more information, or to schedule a free consultation, please contact Stratus.hr at 801-984-1329 or email ACA@stratus.hr.
While it all looks rather black and white on paper, there have been a number of legal challenges and judicial decisions surrounding the Affordable Care Act. Keeping up with it all can be a huge challenge for small- and medium-sized businesses. Not staying on top of it, on the other hand, can land you in some pretty expensive hot water, especially now that the IRS has increased penalties for reporting errors and noncompliance.