The ACA So Far

The 2015 health insurance open enrollment period for individuals and small group employers begins Saturday, November 15. Some employers still wonder whether they are required to offer health insurance to their employees. If your company has fewer than 50 full-time equivalent employees (FTE), you are not subject to the Employer Shared Responsibility sections of the law. However, most employers would agree that a good business strategy for recruiting and retaining excellent talent is offering a robust employee benefits package. If you are an employer with 50 or more FTEs, you will need to offer health insurance coverage to your full-time employees to avoid being required to make an Employer Shared Responsibility Payment.

With so many changes and so much to understand, here are some of the basics to remember when reviewing options with your broker. The new ChamberHealthOptions.com marketplace has plans to fit nearly every individual and group need.

OPTIONS FOR EMPLOYERS WITH 2-49 FTEs:

Offer coverage to employees. You may purchase a small group qualified health plan directly from a health insurance carrier, an agent, or through a private or public exchange. If you have 10 or more employees, there are new self-insured options available as well. Employers need to choose between paying a set percentage of the premium or providing a flat dollar amount contribution that each employee may use towards their benefit selection. Chamber members can access a variety of small group plans at ChamberHealthOptions.com.

Choose not to offer coverage to your employees. Depending upon annual income, some of your employees may be eligible for a federal subsidy to help offset their premium cost for an individual plan. Many small group employers are deciding to give each employee an additional flat sum in their paycheck that they may use to purchase individual health insurance. There are two important things to consider if an employee shops on their own for their health insurance coverage: first, the allowance given to the employee will become taxable income; and employees who are not Medicaid-eligible could be subject to a substantial penalty under the individual mandate provision of the Affordable Care Act (ACA) if they fail to purchase their own coverage. It is important for the employee to understand that they need to purchase their insurance policy during open enrollment, which takes place from November 15, 2014 until February 15, 2015. If they fail to purchase their new policy during open enrollment, they will not be allowed to buy a policy until November of 2015 without a “qualifying life event,” such as changing marital status, having a baby or a change in employment. Employees can shop for individual insurance options, as well as capture potential federal subsidies, at ChamberHealthOptions.com.

OPTIONS FOR EMPLOYERS WITH 50 OR MORE FTEs:

Purchase a fully-insured or self- insured large group product. All employers who have 50 or more FTEs are required in 2015 to provide an affordable health insurance plan to their employees under the ACA. To be deemed “affordable,” the employee’s contribution cannot exceed 9.5 percent of their annual income. Any employee who purchases a less expensive policy through the state-based exchange may trigger a penalty for the employer, even if only one employee purchases their insurance through the State Health Insurance Exchange.

Opt to not offer coverage. Any large group employer who does not offer coverage to full-time employees can potentially face penalties up to $3,000 per employee.

Employer sponsored health insurance coverage is one of the top two business expenditures facing most business owners. Because of the changes that continue to take place and the importance of this decision to your business, it is prudent to seek the counsel of an insurance professional or a financial advisor who is well grounded in the provisions of the ACA. If you do not have a Chamber member broker, please contact Chamber Health Options at 702.586.3889.