Health Care Reform Update

2014 and full implementation of the Affordable Care Act will come sooner than many realize.  Only recently have many small businesses begun to take stock of what impact the ACA will have on them and their employees.  Here is some relevant information to help New Hampshire small businesses in that analysis.

Beginning January 1, 2014, the Affordable Care Act requires individuals to maintain health insurance, employers to make available “affordable” health insurance to employees, and states to establish “health benefit exchanges” which are web-based marketplaces for medical and dental plans.  Like individuals who will pay a penalty for failure to maintain health coverage, employers, too, can be subject to financial penalties for failing to meet their ACA obligations.  One big exception:  employers with fewer than 50 full-time equivalent (FTE) employees are exempt from at least that employer penalty.

The health benefit exchanges will serve two markets, though both will be accessed via one website; the individual exchange and the Small Business Health Options Program (“SHOP”) exchange. Since New Hampshire did not set up its own state-based exchange, individuals and small businesses in New Hampshire will access the federal individual and SHOP exchanges to shop for health and dental plans.

Carriers planning to offer medical and dental plans to New Hampshire residents on the exchanges are currently designing and filing with the New Hampshire Insurance Department plans that meet the ACA’s requirements. Carriers, too, have obligations under the ACA, some of which will significantly change what small businesses have seen in plans of prior years.  For example, all plans in the individual and small group markets must cover the “essential health benefits” (prescription drug coverage, emergency services, maternity and newborn care are three of them).  And, employers must offer plans that meet the “minimum essential coverage” standard, which is an actuarial value of at least 60%.

A recent study noted that 44% of employers feel morally obligated to offer health coverage to their employees.  It is not a surprise, then, that many businesses are truly struggling to do right by their employees, but they do not have the information or answers they need to make the best healthcare coverage decisions for their long-term financial interests and their employees.  You can read up on exchanges now at “healthcare.gov”, a website that will convert to the federal exchange portal this summer.  The U.S. Small Business Administration’s website, “sba.gov”, is another good resource.  And, before you calculate how much your business can contribute to your employees’ coverage, go to the IRS’s website, “irs.gov”, to determine if your business is eligible for the Small Business Health Tax Credit which can equal up to 50% of your workers’ health care premiums.

I don’t advise you to rely on a blog for matters as critical as these so you are best to consult your benefits team to answer such questions as how to calculate FTE employees, whether your plans meet the “affordable” standard, whether your business is eligible for the small business tax credit and others.

Thomas Raffio
President & CEO
Northeast Delta Dental

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