The Affordable Care Act has altered the healthcare landscape in the United States. But many workers are unclear about how the act — also known as the ACA, or Obamacare — impacts their employee health benefits. Along with the employment solutions Robert Half offers, we explain the 2010 healthcare overhaul. Let's take a closer look at this legislation and what it might mean for you.
What is the Affordable Care Act?
The Patient Protection and Affordable Care Act is a 2010 healthcare reform law that aims to increase the quality, accessibility and affordability of health insurance. Following are some of the fundamental insurance market reforms that apply to employers and the group health plans they sponsor:
- Required coverage of adult children up to age 26
- Before 2014, prohibition of pre-existing condition exclusions for children under age 19 (after 2014, this prohibition is expanded to include all adults)
- Required coverage of preventive health services with no cost-sharing (i.e., deductibles and co-pays)
- No lifetime limits or annual limits on essential health benefits (except, for years before 2014, restricted annual limits were permitted)
- Prohibition on discrimination under an insured group health plan in favor of highly compensated individuals
- Additional choice of healthcare providers and access to certain services
- Use of a uniform explanation of coverage and standardized definitions (commonly referred to as a Summary of Benefits and Coverage, or SBC) and a uniform glossary
- Required appeals process for benefit denials, including an internal appeal and external review
- Access to additional data about the particular health coverage, such as claims denials
How are employee health benefits affected?
Companies that have previously not offered healthcare insurance to employees may now begin to offer it; other firms may stop offering coverage. It's likely that a majority of Americans will notice no change to the employee health benefits offered by their employers, however, and will not have to visit a marketplace.
What is a health insurance marketplace?
Public insurance marketplaces (often called "exchanges") are state- or federal-operated arenas in which health insurance providers compete. They provide access to health insurance that meets ACA standards for individuals and small groups and make it easier to compare competing health insurance products on an apples-to-apples basis.
Will my company have to offer health insurance if it didn't before?
Under the act, employers have a greater responsibility to provide employee health benefits. The act mostly affects organizations that don't already offer health benefits to their workforce.
The ACA's employer mandate rules impose new requirements on businesses with 50 or more full-time employees and full-time equivalent employees (FTEs) that take effect January 1, 2015. But for employers with between 50 and 100 full-time employees and FTEs that meet certain requirements, the effective date of the employer mandate has been pushed back to January 1, 2016.
Employers that are subject to the employer mandate must generally make an offer of group health plan coverage to at least 95 percent (70 percent in 2015) of all their full-time employees or face the prospect of a penalty. Where an employer does make an offer of coverage, but that coverage costs too much or is not sufficiently generous, a separate, and in most cases lesser, penalty may be imposed.
Subsidized plans in the marketplace offer small-business owners reduced rates to encourage them to offer employee health benefits.
Do I need to buy insurance?
If you have insurance through your employer, a public program like Medicare, Medicaid or the VA, or a private policy that you've purchased yourself, you don't have to do anything. If you're uninsured, and you don't qualify for an exemption, you must pay a penalty when you file taxes.
What if I'm a temporary or part-time worker?
If you have a part-time job at a businesses with 50 or more full-time and full-time equivalent employees, your employer must provide coverage if you work more than 30 hours a week. Otherwise, it's optional. Even if your company chooses to offer employee health benefits, it may be cheaper to buy a plan through the marketplace.
Temporary and contract workers retained through a third-party staffing firm for legitimate business reasons, however, are generally considered employees of the staffing firm. The staffing firm is in most cases responsible for complying with the mandates of the ACA for its eligible full-time employees. Reputable staffing firms with a sizeable temporary, contract or consultant workforce most likely already offer qualified candidates access to some form of employee health benefits.