Understanding the changes to health care coverage that will impact you.
Young Adult Insurance
Under health care reform, young adults up to age 26 may be eligible for coverage under their parents’ family policies. Dependent to Age 26 Fact Sheet
Premium Rate Review / Medical Expense Ratio
The PPACA requires states to establish a transparent process for reviewing premiums and justifying any increases. New York’s process meets the law’s requirements.
Health plans must report and meet certain medical expense ratios. A medical expense ratio compares the amount of premium dollars spent on clinical services and quality initiatives to the amount of premium dollars spent on administrative costs. If medical expense ratios are lower than 85 percent for the large group market (at least 85 cents for every $1 spent on medical expenses) and 82% for the small/individual group market, the health plan must provide rebates to the employer groups.
For more information, please visit the NYS Department of Financial Services website.
Auto-Enrollment
Upon promulgation of regulations and guidance, employers with more than 200 full-time employees offering at least one health plan must automatically enroll new full-time employees and continue enrollment of current employees. Adequate notice and the ability to opt out of the plan must be given.
On February 9, 2012, the U.S. Department of Labor issued an FAQ regarding automatic enrollment, employer shared responsibility, and waiting periods. For the full document, click here.
Uniform Summary of Benefits & Uniform Glossary
Group health plans and issuers will be required to provide uniform Summary of Benefits and a Uniform Glossary across all health plans, in order to help individuals shop for coverage. The U.S. Department of Labor (DOL) released an updated FAQ with regard to Summary of Benefits and Uniform Glossary, noting an extension of compliance with the final regulation.
On February 12, 2012, the DOL updated the Affordable Care Act Regulations and Guidance.
Notices to Employees of the Exchange
In 2013, employers are required to provide information about the health insurance exchanges and the availability of any tax credits to new hires and current employees.
Prohibition on Discrimination Based on Health Status
Effective January 1, 2014, group health plans and issuers are prohibited from establishing rules for eligibility based on a person’s health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, disability, and any other health-related factor determined by the Department of Health and Human Services.
Wellness Programs
Insurers will be able to offer wellness programs that promote health or prevent specific diseases and meet specific requirements and conditions. Programs that were established or adopted by state law prior the enactment of the new law will not be prohibited.
Prohibition on Excessive Waiting Periods
For plans or policies that take effect on or after January 1, 2014, a group health plan and issuer may not impose waiting periods for benefits that exceed 90 days.
Coverage for Eligible Clinical Trials
If a group health plan or issuer offers coverage to individuals eligible for clinical trials, the health plan or issuer cannot prevent the person from participating in the trial and must not impose additional conditions or place limitations on the services or items that are provided as part of the clinical trial. Certain costs are excluded from this requirement; and plans and issuers are not prevented from requiring that the person visit a participating provider. This policy goes into effect for plans and policies that begin on or after January 1, 2014.
Limits on Out-of-Pocket Sharing
Group plans must ensure that annual cost sharing does not exceed essential benefit limitations. For example, the annual out-of-pocket limitations for cost sharing cannot be greater than the amounts in effect for an HSA-qualified high-deductible health plan for individual and family coverage; and the annual deductible cannot exceed $2,000 for individual coverage and $4,000 for families in any other plan. This change takes effect for plan years beginning on or after January 1, 2014.
Penalties Associated with Not Providing Coverage
Effective January 1, 2014, employers with more than 50 full-time employees will pay a fee for each employee who receives a tax credit for health insurance through the exchanges. Under the new stipulation, employers will pay $2,000 for every employee who receives a premium-assistance tax credit. For employees who provide coverage that is either unaffordable or fails to meet minimum coverage standards, the employer will be assessed either $3,000 for each full-time employee who obtains a premium credit for participation in the exchanges or $2,000 for all full-time employees – depending on which is lesser. The assessment would not apply to the first 30 full-time employees; but part-time employees would be counted when determining “full-time” employees for employer-coverage requirements. Penalties would be assessed on behalf of full-time employees who work 30 hours or more per week. For more information, view the Kaiser Family Foundation Employer Penalty Flow Chart.