RSS

New health insurance

BY REED TINSLEY, CPA, CVA, CFP, CHBC

As you know, the primary purpose of the Affordable Care Act (also called the Healthcare Act) was to expand access to affordable health coverage. Central to this is the creation of new Insurance Exchanges, which are being referred to as the Health Insurance Marketplace (or the Marketplace). The Marketplace is intended to provide a competitive private health insurance market where individuals and employees of small businesses can shop for affordable coverage. Every state will have a Marketplace—some will be run by the state, others by the Federal government or a combination of the two. They are currently being set up and are supposed to be up and running by 10/1/13.

Open enrollment for health insurance coverage through the Marketplace begins 10/1/13 for coverage beginning 1/1/14. Individuals who don’t have insurance coverage after 2013 may be subject to a penalty.

Depending on their income, individuals who obtain coverage through the Marketplace may qualify for premium tax credits that immediately reduce the premiums they pay for coverage. They may also be eligible for cost-sharing reductions that reduce the amount they pay out of pocket for medical expenses. However, neither the credit nor cost-sharing reduction is available if the individual’s employer offers a health plan with minimum essential coverage that is affordable and meets the minimum value standard. The plan meets the minimum value standard if the plan’s share of the total allowed cost of benefits is no less than 60%. Coverage is affordable if the employee’s share of the self-only premium for the employer’s lowest cost plan doesn’t exceed 9.5% of the employee’s household income.

To make sure your employees have the information they need to allow them access to the benefits offered through the Marketplace, starting 10/1/13, employers must provide its employees written notice of the health coverage it offers along with an explanation of the new Health Insurance Marketplace coverage options. Employees will take this information to the Marketplace when they apply for insurance.

Providing notice to employees
The notice must be provided to all employees, regardless of plan enrollment status (if applicable) or of part-time or fulltime status. A separate notice does not need to be given to dependents or other individuals who are or may become eligible for coverage under the plan, but who are not employees.

Content of the notice
The notice must include specific information. The DOL has provided two Model Notices: The first model notice applies to employers who offer a health plan to some or all employees (http://www. dol.gov/ebsa/pdf/FLSAwithplans.pdf). The second model notice applies to employers who do not offer a health plan (http:// www.dol.gov/ebsa/pdf/FLSAwithoutplans. pdf). Employers are permitted to modify the model notices as long as they still meet the content requirements specified in the health care reform law.

Timing and delivery of the notice
Employers must provide the notice to all current employees by October 1, 2013, though the notice may be provided sooner. Also starting October 1, 2013, new employees must receive the notice at the time of their hire. For 2014, the DOL will consider a notice to be timely provided at hire if it is provided within 14 days of the employee’s start date. The notice must be provided in writing and can be provided electronically if the DOL’s electronic disclosure safe-harbor requirements are met; otherwise, the notice may be provided by first-class mail.

COBRA
Also in connection with the new exchange notice, the DOL released a revised COBRA Model Election Notice that includes information about the health insurance exchanges. The DOL included a redline document showing the changes made by the revised COBRA notice. http://www.dol.gov/ebsa/