Health reform made simple: The 3 big things you need to know now
Employers across Michigan have told us that, when it comes to health reform, there’s TMI (Too Much Information) and TLT (Too Little Time) to figure out what it all means. Confusion caused by TMI is why we offer employers a very brief and direct take on reform requirements. For example, a recent online survey of small business owners found one-third (34%) incorrectly believed they were required to buy insurance for employees in 2014 and another third (35%) weren’t sure what they had to do.
Since some of biggest health reform changes go into effect beginning January 1, 2014, it’s time for employers to clear away the clutter of misconceptions and get up to speed on what really matters. Here, in a nutshell, are three key things you should know about the Affordable Care Act to help you prepare.
Companies with fewer than 50 employees are exempt from employer responsibilities.
According to a government fact sheet, employers with fewer than 50 full-time equivalent employees (which includes full-time and part-time employees) are exempt from new employer responsibility policies. Excise tax will not be imposed on these employers, and they do not have to pay an assessment if their employees get tax credits through a state-sponsored health insurance exchange.
Exchanges are coming.
As you probably know, the new laws require states to offer these exchanges, which are essentially competitive marketplaces of qualified health plans. The exchanges allow smaller employers (for 2014, Michigan’s exchange will define small employers as entities covering fewer than 50 employees) and individuals to directly compare available private health insurance options on the basis of price, quality and other factors. Michigan will have a state-federal partnership exchange in 2014 with open enrollment beginning on Oct. 1, 2013.
Businesses can be fined for not providing minimum essential coverage.
This one’s a little complicated, but here’s the gist: Effective January 1, 2014, a benefits package must meet the criteria for minimum essential coverage or face potential fines. The basic guideline for this is offering a plan with at least a 60% actuarial value, which means the plan pays 60% of its promised benefits after factoring in deductibles, coinsurance and copayments. (Note: The actuarial value formula to judge the criteria has not yet been finalized by the U.S. Government at the time of posting.) Most Blue Cross Blue Shield of Michigan health insurance plans meet or exceed this requirement.
Rising benefit costs is a challenge for all companies. GlidePath, a new solution from Blue Cross Blue Shield of Michigan and Blue Care Network, offers your mid-size company an innovative way to manage spending and risk. It can transform the way you finance your company’s health insurance coverage. With GlidePath’s defined-contribution solution, you can determine your company’s health benefit budget and simplify the administrative work that goes along with offering health benefits.