Providing clarity and compliance for the Affordable Care Act
As the health insurance industry continues to move forward, change course and then roll back, many employers are having a difficult time keeping up with the legal landscape. DVB Insurance Services is well-versed in all state and federal laws concerning employee benefits, and we pay close attention to news rules and regulations as they are established, including those of the Affordable Care Act. Accordingly, we can assist you with the following ACA compliance:
Design benefits to meet the requirements of the ACA, as well as other city, state and federal laws.
Assist you with ACA reporting.
Handle all employee forms and notices.
Provide employer training and education on complying with the ACA.
More on the Affordable Care Act
Following are brief highlights of the ACA provided for your convenience. Because of the complex nature of the ACA, we suggest you call our office for professional assistance.
Individuals and Small Businesses may be eligible for a tax credit under ACA healthcare reform laws. Thus, the credit is applied as a discount on your monthly insurance premium. Accordingly, to see if you are eligible for a tax credit, please use the Subsidy Calculator provided by the Health Insurance Marketplace. Or, if you are a business, use the Small Business Tax Credit Calculator provided by the Health Insurance Marketplace. In any case, both businesses and individuals must purchase benefits through the Health Insurance Marketplace to secure their tax credit. However, note that you must purchase benefits through the Health Insurance Marketplace to secure your premium discount.
EMPLOYERS: Employers who have more than 50 full-time equivalent employees must offer those employees benefits that pay for 60% of the minimum essential benefits. Accordingly, if you are in non-compliance, you will incur a penalty of $2,140 per year multiplied by the number of full-time employees, and excludes the first 30 employees. Additionally, the penalty is increased each year by the growth in insurance premiums. However, note you may also incur a penalty when at least one of your employees receives a premium tax credit in the Health Insurance Marketplace (Exchange).
INDIVIDUALS: Following is information on the Individual Mandate of the ACA. However, note the tax penalty for individuals has been recently repealed. The penalty, prior to 2019, affects individuals who fail to obtain qualifying health insurance. Individuals can have coverage through their employer, or through an individual policy to satisfy the requirement. Accordingly, if you do not have qualifying health insurance, the tax penalty will be $695 for adults. Additionally, the penalty is $347.50 for each child. However, the maximum family penalty is the greater of 2.5% of income, or three times the adult penalty, which is $2,085. Consequently, your penalty will be applied on your annual tax return.
- There is no longer a pre-existing condition clause. In other words, insurance companies can not increase rates or deny coverage because of a pre-existing condition.
- Your dependents can remain on you policy until they turn 26 years old.
- Insurance companies can not consider gender when setting rates.
- Employer renewals must be based on the same rates as new business.
- The waiting period for employer benefits should not exceed 90 days.
You may be subject to a tax penalty if you do not comply with the “Essental Benefits” of ACA. Specifically, to be in full compliance with the law, your insurance policy must cover at least 60% of the costs of the following essential benefits.
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Prescription Drugs
- Mental health and Substance Abuse disorder services
- Rehabilitative and habilitative services and devices
- Pediatric services, including oral and vision care
- Preventive and wellness services, and chronic disease management