Countdown to 2014: Preparing Employers for Healthcare Reform

Category: Personal Insurance

On January 1, 2014, the Patient Protection and Affordable Care Act goes into effect across the United States. This landmark bill was signed into law in 2010 and requires health insurance for all Americans. Also known as the Healthcare Reform Act, it mandates fundamental changes to employer-sponsored health insurance plans, affecting employees’ coverage options and your bottom line as well.

In the coming months, employers must prepare for the implementation of the new laws. To help, we’ve outlined some frequently asked questions and their answers.

Do the new healthcare laws apply to all employers?

The new laws apply only to “large employers” with a full-time staff of 50 or more employees. Full time status is determined by 130 hours per month or 30 hours per week. Smaller employers are provided coverage incentives under the new laws, but are not directly required to participate.

What is required of eligible employers?

Large employers have two options under the Healthcare Reform Act:

1) Provide affordable health insurance options that meet minimum federal coverage standards to most employees and their dependents; or

2) Pay a penalty.

This “pay or play” model allows employers to opt out, but not without significant cost to the company. If employers do not participate, employees can seek individual coverage through state-run insurance marketplaces.

What will participation cost?

The cost to provide healthcare coverage for employees is largely determined by each company’s situation. However, premiums for group medical plans are expected to increase, and new insurance requirements also may result in higher costs to your company:

1) Coverage cannot be determined or denied based on gender, current health status, or preexisting conditions.

2) Adult children can be covered by their parents’ insurance plans through age 26.

3) Increased minimum policy standards limit the allowable coverage options.

What should employers do to prepare?

Before taking any action, employers should become knowledgeable about their responsibilities and options under the Healthcare Reform Act. An excellent resource is Critical Employer Issues in the Patient Protection and Affordable Care Act, a guide produced by the U.S. Chamber of Commerce. A cost analysis will further help individual companies determine whether to participate or to pay the penalty.

The knowledgeable agents of McInnis Insurance are available to answer your questions about the Healthcare Reform Act. We offer insurance options for companies all across the Southern United States. Call or visit any of our Northern Louisiana offices to learn more.

What questions or concerns do you have about the new healthcare regulations?

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