Affordable Care Act Checklist for Businesses in 2014
By: Robert Pusateri, Capstone Brokerage Benefits Consultant, April 2014
It is important for employers who sponsor group health plans to review their compliance with key provisions of the Affordable Care Act (ACA). In 2014, many aspects of the new regulations have taken affect. It is important that employers understand their responsibilities. To do so they need to have a knowledgeable benefits advisor. Some of the key aspects that employers need to understand are:
1. Evaluate grandfathered status of Group Health Plans
A grandfathered plan is a plan that has been in force since March 23, 2010. The plan has also covered at least one person continuously. These plans do not have to comply with certain ACA rules.
2. Review plan documents for required changes to plan benefits.
Many of the required changes affect businesses at different times because they are based on plan year. Plan year is when your plan is effective until it renews, example May 1st- April 30th. This means that your business needs to be in compliance with changes in the calendar year at your renewal not necessarily on January 1st when the new regulations take affect. This allows some business to prolong being ACA compliant which in turn saves them money on penalties and fines.
Some of the major provisions the ACA sets forth are waiting period changes, no annual dollar limits and perhaps the most talked about removal of preexisting conditions. It is important that business owners understand that the maximum waiting period to extend employee benefits is 90 days. Health insurance plans can no longer deny a person coverage based on a pre-existing condition or for any reason. This means everyone is now insurable.
3. Analyze and decide on tax-favored arrangements.
If you are a business owner and you have a cafeteria plan, HRA or FSA then you may need to modify your plan in order to comply with certain requirements in the ACA.
4. Provide required notices to employees and dependents.
Employers are required to provide a Summary of Benefits & Coverage (SBC) to all employees. The Health Insurance carrier should send out a SBC to all enrolled members on the health plan. In the SBC it will further explain how co-pays and deductibles will work when the member needs to utilize their coverage.
For the average business owner all of these aspects are difficult to understand. This is when having a good broker really can help. In general every year there will be changes made that businesses will have to comply with under the ACA. It is important to develop an understanding of these changes, to prepare for each year. This is especially important for employers with 50 or more full-time employees.
