On January 1, 2014, the brunt of changes included in the Affordable Care Act will become effective. These changes will affect both the health insurance offered by your school and the health insurance offered in the individual marketplace for your school’s part-time employees. We’ve been working with client schools over the last several months to prepare for these adjustments, but, if you’re not part of the ISM insurance community, you might find yourself wondering, “What do I need to do to prepare?”
Some of the stress was alleviated by the news that came out of Washington a few weeks ago announcing that the employer mandate for offering affordable health insurance and report requirements that went with the mandate have been postponed for one year. This additional time allows you to determine your school’s strategy—either work to avoid the penalties or decide that it is less costly to pay the penalties. (Next month, I will delve into the nuts and bolts of the employer mandate.)
Hopefully your school followed compliance standards and sent notice of your state exchanges (if your state has an established exchange—some states haven't established a state marketplace—otherwise it would be the federal exchange.) to all your employees by the October 1 deadline. Remember, moving forward, new hires must be given this notice within the first 14 days of employment.
All individuals will need health insurance on January 1, 2014, or they face a penalty. The exchange notice you distributed informs them if they are eligible for your health insurance or if they must find health insurance elsewhere. If they elect to join the marketplace, they may be eligible for a tax credit or premium assistance.
At Open Enrollment for your health insurance, you must provide employees with a Summary of Benefits Coverage (SBC). This material will inform them if your health insurance plan offers the minimum essential coverage as well as the minimum value. This document comes from your insurance provider, so you will have to notify your provider early if you are making changes to your plan. Insurance companies require time to get the SBC prepared for you.
The IRS and Department of Labor have issued guidance on individual health insurance policies and employer reimbursements. For plan years after December 31, 2013, you cannot pay for or allow employees to pretax individual health insurance premiums. This includes policies individuals might purchase in the individual marketplace. If you are currently allowing this practice, you should inform your employees of the required policy change.
For your group plan, the waiting period for newly hired, full-time employees (employees hired who are scheduled and expected to work more than 30 hours per week) cannot be longer than 90 days. It has been emphasized that the 90 days are actual calendar days, so you cannot define eligibilities as a first of month after three months of employment.
Health Reimbursement Arrangements (HRA) must be integrated with a health insurance plan. That means that, for employees to be eligible for the HRA, they must be in your health insurance plan.
You will see changes in your health insurance plans that have been mandated in the Affordable Care Act. These changes will show up, possibly with increased rates, in your new plan year. Starting with plan years on or after January 1, plans must eliminate pre-existing condition language. You will still have to give employees in your health insurance their Credible Coverage Notice when they terminate for 2014. Plans also must cover at 100% all Preventive Care Services, and they must eliminate Annual Dollar Limits on essential health benefits, and cannot have cost-sharing limits greater than $6,350 for individuals and $12,700 for families in 2014. If you are a small employer, your deductible can be no more than $2,000 for single coverage and $4,000 for other coverages.
Looking for different benefit options to meet your school’s unique budget? ISM Insurance has worked closely with private-independent schools for nearly four decades, helping them build benefit packages that promise long-term, sustained success. Since the health care reform changes have begun implementation, we have been working with schools and special health care consortiums that help to keep costs predictable and manageable. To see if your school qualifies for one of our state health care consortium programs, or to see what creative insurance solutions we have to help your school’s bottom line, contact us at martin@isminc.com.
Additional ISM articles of interest
Private School News Vol. 11 No. 5 Health Care Reform and the Effect on Health Flexible Spending Accounts and Health Reimbursement Arrangements
ISM Monthly Update for Business Managers Vol. 11 No. 9 Preparing for the Health Care Reform Changes
Private School News Vol. 11 No. 4 Health Care Reform 2013–2013
ISM Monthly Update for Human Resources Vol. 11 No. 9 Health Care Reform, Exchanges, and School Culture
ISM Monthly Update for Business Officers Vol. 10 No. 8 Rises in U.S. Health Care
