Benefit Exchanges and the Health Care Reform
For some employers, new public benefit exchanges will be made available and will provide a marketplace in which companies can shop for benefit plans which are cost effective, and more importantly which are compliant under the Affordable Care Act. Ensuring that employers offer plans which are compliant is particularly important as companies may face penalties. Plans are considered to be compliant in several was. First, they should cover what is considered to be basic and essential treatments. This includes no lifetime dollar limits and restricted lifetime limits, preventative care, mental health, maternity coverage, amongst other treatments which will be considered a standard for any plan. Employees will now be able to keep dependents up until the age of 26 years of age, on their coverage. The plan offered must cover at least 60% of the potential health care claims that an employee may make, also known as the actuarial cost. Plans must also be offered to employees and their dependents and must be affordable to employees. Affordability is determined by the cost of the employee’s contribution which must not exceeding 9.5 % of the employee’s annual earnings as reported on their W2 after any salary reduction contributions. Employers will also be responsible for providing their employees with a SBC or summary of benefit and coverage document, which summarizing the health care plans offered using predefined templates provided by the Department of Health and Human Services.
To prepare for participating in benefit exchanges, employees must determine if they are eligible and analyze current health care coverage against the new alternative plans to determine if a move towards benefit exchanges is cost effective. Public exchanges are initially aimed at small business and individuals, but over the coming years, it is envisaged that medium and large sized companies may also be eligible to participate. In addition to choosing the most appropriate health care coverage, employers must begin planning for how new coverage may be implemented, how companies will liaise with exchanges or directly with carriers. Companies may need to consider how they will communicate the new changes and options to their employees and determine the company policies, procedures, and documentation that may require updating. New regulations also include automatic enrolment through which employees must automatically enroll all employees into their health coverage. Employers may need to consider how to implement this change, such as through the use of software and applications to support the enrollment process. Other considerations include how employees who participate in certain wellness programs may be rewarded with a reduction in their premium costs. Employers may need to determine how they will record and monitor employees participating in these programs, in order to ensure that this is reflected in premium costs and accounting.