|With a one-year delay until 2015 in the employer pay-or-play penalty, the availability of small business “SHOP” plans, and the higher standards for health insurance benefits in the individual market, all this might lead business owners and individuals to believe not much change will actually be felt in 2014. Be assured, this is a false notion.
Here is a summary of what key provisions will take effect for plan years which begin in 2014 (whether on January 1st or some other date during the year).
Pre-Existing Condition Exclusions
One provision which has been cited perhaps most frequently by supporters of the Affordable Care Act, is the elimination of exclusions for pre-existing conditions. Supporters have particularly pointed to this provision since the law itself came under fire during the premature roll-out of the public exchanges for individual coverage. There is no “free lunch,” of course. As employers and individuals getting health coverage quotes now have recognized, the health plans’ increased exposure to higher claims contributes to a boost in premiums. Yet it can be a small price for an individual with a chronic, life-threatening disease.
Dollar Cap Eliminated
Employers covered by the Affordable Care Act (that is, those with at least 50 full-time equivalent employees) are not obligated to cover the full spectrum of minimum essential benefits until 2015. They are however, not permitted to put a dollar cap on those which they do offer. In addition, you cannot change your plan year to postpone becoming subject to this requirement. A possible exception, although the rules are unclear at this point, is whether you can cap the number of hospital days your plan will cover.
These dollar limits ($6,350 for single coverage and $12,700 for family) on the amount employees can be required to kick in, collectively, pertain to health services included in the essential health benefits. However, next year you are permitted to have higher limits for prescription drug and dental plans. (In 2015, that exemption disappears.)
Wellness and Preventive Services
Next year you can beef up wellness plan participation incentives to 30 percent of the cost of health coverage, and half the cost for tobacco cessation programs. Coverage of preventive services for non-grandfathered plans has been required for a couple of years already. But that requirement kicks in next year for grandfathered plans. Grandfathered plans are those which were in existence when the ACA was enacted in 2010, and haven’t reduced benefits significantly since then.
The required services are based on recommendations by the U.S. Preventive Services Task Force, many of which are identified here. As the old saying goes, the devil is in the details. You’ll need to check with your health plan providers for how they are interpreting the guidelines. In theory, making these services available to your workers without co-pays could ultimately lower — or slow the rate of increase — of your healthcare spending. Time will tell.
Women’s Health Services
Required for non-grandfathered plans since last year, this ACA mandate has been the subject of considerable controversy and litigation, particularly focused on birth control. Grandfathered plans will be required to offer the following services (without a co-pay):
In addition, the hot button “contraceptive methods and counseling” is supposed to cover “all FDA approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.” This is according to the government’s rundown on the broader topic on this webpage. An exception is provided for religious institutions. Also, “accommodations are available to group health plans established or maintained by certain eligible organizations… as well as student insurance coverage arranged by eligible organizations” allowing them to opt out of providing contraception coverage.
90-Day Waiting Period
The ACA bans waiting periods of longer than 90 days, for new hires to become eligible to join your health plan. This applies to all eligible employees and dependents. Preliminary regulations state, “Being eligible for coverage means having met the plan’s substantive eligibility conditions, such as being in an eligible job classification or achieving job-related licensure requirements specified in the plan’s terms.” These regulations, issued back in March, govern the 90-day waiting period issued jointly by all federal agencies involved in enforcing ACA, and will be in effect through 2014.
The regulations make it clear you will not be considered in violation if, for example, you have a 30-day waiting period (or a waiting period less than the maximum of 90 days), but your employee takes longer than 30 days to elect coverage under your plan. Also, if you hire a new employee who will be working on a variable hour schedule and it’s not yet clear if the employee will average enough hours to be considered a full-timer, you can use “a measurement period consistent with the timeframe permitted” under a section of the law described here.