Benefit Exchanges and the Affordable Care Act
Under the Affordable Care Act, the individual mandate will require that all US citizens and permanent residents purchase health care insurance or face a penalty. In 2014, the penalty will consist of $95 or 1% of taxable income rising to $325 or 2% in 2015 and $695 or 2.5% in 2016. For this reason, businesses that are able to offer group coverage will be particularly attractive to workers. Unfortunately, the increasing cost of health care coverage is causing many employers difficulty in continuing to provide coverage. Similarly, the new regulations and changes being made under the Affordable Care Act (ACA) means employers that do continue to offer health care coverage will find that the types of plans they are able to provide may change. They may also have additional responsibilities under the health care reform. For example, employers with 250 or more employees will be required to meet W-2 reporting requirements in which they report their contributions towards their employee’s health care coverage, the cost of premiums, and types of plans they offer. Employers must also ensure that their employees have a summary of benefits and coverage document before open enrolment takes place. This document clearly summarizes terms and definitions pertinent to the health care coverage plans offered by the employers. This helps employees to compare their health care options side by side, and make informed decisions regarding which benefit plan to choose. This also helps employees to compare plans offered by their employer with other plans such as those available in the individual market or through benefit exchanges.
The Affordable Care Act not only helps to improve access to health care such as the implementation of public benefit exchanges, but also works towards increasing the quality of health care coverage. The patient-centered outcomes research institute carries out research into the current status of health care in the USA, helping to make the costs of treatments more transparent. This will help both employers and employees to make more informed decisions regarding their own health care, including where to access cost effective treatments. New plans will also offer a guaranteed approval, helping to decrease discrimination or refusal of health care coverage to certain individuals. As a consequence, health care coverage cannot be denied to individuals based on pre-existing medical conditions, although age, location, and tobacco use will still play influential factors in the premium costs.
Larger businesses will face a penalty if they do not offer group coverage, and many companies are choosing to use this period of health care reform to analyze their current benefits offerings and look for new benefit options. HR consulting companies can not only help to analyze the businesses current status, but can also offer customized guidance. They help to guide companies through the health care reform. As the cost to administrate benefits also plays an important role, HR consultants are able to advise on the best software solutions and applications which can reduce administrative costs and streamline HR processes. Choosing to work with benefit exchanges may also influence how companies run their internal administrative processes and should also be taken into consideration when choosing software solutions and applications.