A Quick Affordable Care Act Update for Small Businesses
Gauri Gupta December 14, 2017
There was little doubt that the Affordable Care Act was going to open up a lot of questions for everyone at its inception as insurance companies, individuals, and healthcare providers all struggled to comply with the new rules.
Of course, things haven’t gotten any clearer since then. There has been a lot of tension in Congress surrounding the act, and questions of repealing and replacing it remain unanswered. But as each change and challenge arises, small businesses still have to reevaluate their strategy and perhaps even their budgets to meet the current federal and state expectations.
So let’s explore what’s on the horizon for 2018, and how small business health insurance is expected to be affected.
Consumer Open Enrollment
As of the writing of this post, the open enrollment period for the ACA is just wrapping up for the year. In the past, this open enrollment period would last until the end of January, but this was recently changed. There are still plenty of plans on the market today, and most Americans should be able to find a reasonably priced plan that works for them.
In fact, a full 80% of those enrolled in the ACA should be able to find a plan for $75 a month or less. Those looking for coverage can still use the regular websites to sign up for coverage, or they can use an approved third-party website this year. Employees are still able to compare different coverages online as well.
Business Open Enrollment
Each employer has their own timeframe when it comes to open enrollment in group healthcare plans, so it’s important for small businesses to understand when they’re deadlines loom.
Small businesses are still considered Applicable Large Employers when they hire more than 50 workers to work 30 hours a week or more. If you fall under this category, you will need to offer the Minimum Essential Coverage (MEC) to employees, which is defined as the Bronze level of coverage. A Bronze plan is defined when the insurer covers at least 60% of healthcare coverage in order to meet the MEC.
Catastrophic Coverage Is Not Available
The major changes for this year are tied up in the cost of each level of coverage (e.g., Silver, Gold, Platinum). Each state is experiencing different changes in the cost of their plans based on the specific major providers in their state.
Some small businesses looked forward to the Copper Plans offered this year, because they would give small businesses a way to offer coverage at a low cost. However, they were told that these plans would not be available in 2018 and potentially not even available for 2019 either. These plans offered low-cost health insurance to employees if the worst were to occur.
So an employer would be expected to cover their standard healthcare needs out-of-pocket, but their insurance coverage would kick in if they were to suffer a devastating/catastrophic event (e.g., major car accident, illness diagnosis, etc.).
Loss of Cost Sharing Reduction
Cost Sharing Reduction gave insured individuals another way to lower the cost of their healthcare by providing additional discounts for co-pays and deductibles. Consumers used to have to enroll in a Silver plan to qualify for these reductions, but this year they’ve been scrapped altogether.
The implication for small businesses here will only be clear as 2018 unfolds, but some fear that the loss of this benefit may affect individual insurance exchanges. Ultimately, this could lead to higher bills for small businesses if they’re left to shoulder the bills of those who are unable to meet their medical obligations.
In the past, the IRS may have been forgiving to a small business who failed to fill out the right form or provide the exact level of coverage to an employer. This is because the ACA was still new, and everyone was testing its real-life implications.
However, now that the ACA has been around for a few years, the IRS is expecting to collect far more penalties this year from both individuals and employers alike. Small businesses have to be especially vigilant right now to avoid paying high penalties.
What You Can Do
Navigating small business health insurance is practically a full-time job, and there are many ways employers can miss a potential cost-saving opportunity for themselves and their employees. As regional costs rise and state legislators step in, we’re likely to see more upheaval during 2018. The best thing a small business can do is forge a relationship with an insurance provider who can find the right level of coverage for a company as efficiently as possible.
Choosing the level of insurance coverage for your small business based solely on price may feel like the only option, but this choice can have far-reaching consequences with the new ACA changes. Instead, pick a provider who can not only keep you up to speed on what’s coming around the corner but who can also provide solutions to each new small business health insurance change.