How The Affordable Care Act May Affect Your Company

The Affordable Care Act or ACA will help to improve the quality of health care, reduce health care costs, and improve access to health care. This is particularly important for those who do not currently receive health care coverage through their employer. It will also help to provide a greater number of coverage options to employers, including helping to support small businesses in purchasing health coverage, such as through the provision of small business tax credits. Other changes under the ACA will include expanding the criteria for eligibility to Medicaid, providing greater control and consumer protection.

The Affordable Care Act will have many implications for companies based on the company size and other criteria. For example, companies that employ 50 full time employees or more will be required to provide health care coverage to their employees or face a penalty. Similarly, from 2014, individuals who do not purchase health care coverage will also pay a penalty which will initially be set at 1% of the individual’s annual income or $95, whichever is greater. This will increase to 2% or a flat fee of $325 in 2015 and 2.5% or a flat fee of $695 in 2016.

Large businesses will also have additional responsibilities, such as providing ongoing status reports to the federal government, such as reporting the number of employees and the types of coverage they offer their staff. Full time employees are considered to be those who work over 30 hours a week and who may be eligible for tax credits. The plans that employers provide must also be compliant with new plan regulations. In particular, they must provide certain basic and essential coverage, such as maternity, preventative care, mental health services, physical and occupational therapy and hospitalizations, amongst many other requirements.

In addition to federal guidelines, states may also have their own specific mandates. States will be required to set up public exchanges or market places, which help individuals and small business to compare and shop for plans. Through these exchanges, the plans will be offered as levels which indicate their comprehensiveness and quality, and will be set at bronze, silver, gold, and platinum. Public benefit exchanges will also be required to set up websites and benefit portals through which consumers can access benefit information. They will also provide customer service, helping consumers to understand their options and any federal assistance that may be available to them.

Public exchanges will allow smaller companies and individuals to enjoy lower premium costs as the risk of purchasing coverage will be shared amongst all those participating in the exchange.  Discounts will also available for individuals and families to help them afford coverage costs. For example, it is estimated that individuals who earn between $15, 302 and $46,021 and family of four who earn between $31,155 to $93,700, may be eligible for discounts. Companies must therefore be aware of these changes, ensuring they remain compliant under the Affordable Care Act, including how to effectively integrate new coverage options and technologies within their company.

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