Health Care Reform: What You Need to Know
The Affordable Care Act, or ACA (the U.S. health care reform law) creates new opportunities and responsibilities for large groups.
Here are 10 ways the law may affect your group coverage:
- Guaranteed issue and renewal. With few exceptions, groups are guaranteed to have their coverage issued and renewed. Exceptions are if the group moves outside a service area, the group cannot pay premium costs, or the insurer withdraws from the market.
- Large group redefined. As of January 1, 2016, New York State defines "large group" as a business with 101 or more full-time equivalent (FTE) employees. This means that groups with 51 to 100 FTEs, which were previously considered “large groups," are now small groups. See our FAQs for what this change brings for affected groups, such as the chance to choose plans on the NY State of Health Marketplace.
- Employer mandate. This ACA policy requires groups with 50 or more FTE employees to offer affordable, adequate health insurance to all their full-time equivalent employees and those employees' dependents, or risk paying a penalty.
- Affordable coverage. Group coverage must be considered affordable under the ACA. This means employees' premium contribution for their self-only coverage cannot exceed 9.5 percent of their annual household income.
- Adequate coverage. Group coverage must be considered adequate under the ACA. This means the plan must cover at least 60 percent of the total health care expenses.
- Shorter waiting period. Groups must allow employees to enroll in their group coverage no more than 90 days (including weekends and holidays) after they become eligible for the coverage. This period reduces to 60 days if the group purchases coverage on the NY State of Health Marketplace.
- Employee protections. The ACA ensures full coverage for certain in-network preventive care, guarantees coverage for people with a pre-existing condition, limits out-of-pocket costs, and removes annual and lifetime dollar limits for covered services.
- Wellness incentives. Groups can encourage their employees to participate in wellness programs by offering to pay a portion of their premium contribution.
- Reporting required. The IRS requires large groups (those with 101+ FTE employees) and small groups with 51 to 100 FTEs to complete and file Section 6056 to report on all the individuals they covered under their group plan in the tax year they’re reporting on. Groups must also supply each of their FTEs with a copy of the 6056 report they filed with the IRS.
- Fees and taxes. The ACA includes fees and taxes that may be reflected in your premium costs. For example, starting in 2020, the "Cadillac Tax" will be levied on high-cost employer-sponsored health coverage.