Affordable Care Act Coverage for Employers

Health care reform. "Obamacare." The Affordable Care Act (ACA). Though people have referred to it by different names since the Act passed in March 2010, certain principles remain the same. It aims to make health insurance — and health care — accessible to more Americans.

The ACA has changed the way employers provide health insurance. Health care has many new features on its map. Let’s look at some of the more important changes:

Qualified health plans

One of the most important parts of the ACA is the standard of qualified health plans (QHPs). These health coverage plans are certified by the Health Insurance Marketplace or Small Business Health Options Program (SHOP) Marketplace and are available from insurers such as UPMC Health Plan. All QHPs must meet certain requirements for quality and coverage before they are sold in the Marketplace. Also, QHPs must cover all essential health benefits. These standards make it easier to compare health plans and choose the right one for your organization.

Employer “pay or play” mandate

If you own or help manage an organization with 50 or more full-time (FT) equivalent employees, you’ll want to know more about this requirement. Many employers will be subject to penalties if they do not offer full-time employees and their children affordable health insurance coverage that meets certain standards of the ACA.

These employers must pay penalties if at least one of their FT employees (those working 30-plus hours per week) gets a premium credit/cost-sharing reduction through a Marketplace. An individual may be eligible for a premium credit/cost-sharing reduction if the employer:

  • Does not offer health care coverage.
  • Offers coverage that is not “affordable” (the employee’s annual premium for self-only coverage must not exceed 9.7 percent of household income).
  • Offers coverage that does not provide “minimum value” (the plan’s share of allowed costs under the plan must be at least 60 percent).
Employer coverage Penalty if at least one full-time employee receives a premium credit
Coverage is not offered to at least 95% of FT employees (and their dependents) $2,260 per FT employee in excess of 30 FT employees
Coverage is offered to at least 95% of FT employees (and their dependents) Whichever is less:
  • $3,390 per FT employee who receives a tax credit/cost-sharing reduction in a Marketplace plan
  • $2,260 per FT employee in excess of 30 FT employees

Note: This information does not constitute tax or legal advice. Please consult your tax advisor.

Prevention

Another key part of the ACA reforms is a focus on preventive care. No-cost coverage of preventive health care services is mandatory for most health plans. Vaccinations, health screenings, and well-baby visits are examples of services that can be offered for free.

Improved access

Health care costs can quickly add up. The ACA is designed to curb costs for everyone and provide tax credits for eligible small businesses. Another key feature is ensuring that no one is denied health care because of a previous or ongoing health condition. This increases access to health care for everyone.

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