Will Your Groups be Exposed to a Possible Fine?

In six short weeks groups with 50+ Full-Time Equivalents become exposed to the ACA’s employer mandate for health coverage or suffer a possible fine!  Are your groups covered?

For 2015 employers with 50+ Full-Time Equivalents and less than 100 received a one year pass on the employer mandate requiring them to offer and least Minimum Essential Coverage (MEC) to avoid the “A” penalty. Starting January 1st that free pass is over and groups in this category are now subject to possible fines if they are not in compliance. Do you have clients with 50+ Full Time Equivalents, or worse yet 100+, that still don’t at least have Minimum Essential Coverage for their employees in place NOW!?

If you do, now is the time to act, there is not a minute to waste as January 1st, 2016 is quickly coming upon us. Any group 100+ that chose to stick their head in the sand and do nothing will have a bit of a surprise coming their way about April or May, 2016 as that is when I have read that the fines for groups that did not comply will be going out. Those in the 50+ market still have time to avoid fines which would be levied in 2017 for calendar year 2016 if they act now.

If you’re an agent that has clients that fall into these categories, it's important that they know they now meet the definition of an Applicable Large Employer, or an ALE. They also need to know that as an ALE, they must comply with the employer Mandate to offer coverage that has the following components:

• Provides Minimum Essential Coverage – MEC (74 Preventative Procedures covered at 100% In-Network)
• Provides Minimum Value – Must pay at least 60% of the total cost of medical services for a standard population.
• Must be Affordable - Employer insurance is considered affordable under the health care law if the employee’s share of the premium for the lowest priced plan available that would cover the employee only — not the employee’s family — is 9.56% or less of their W-2 box 1 amount.

It is very important that you have taken the time to discuss this with your clients and make sure they are aware of the possible fines for non-compliance. We at INA have calculators that can help you calculate the possible ramifications of not being in compliance. Here is a chart that shows some of the penalties under ACA for not having the appropriate coverage required under the law. I have shown the penalties for both Employers and Employees/Individuals

Last year INA introduced some new concepts and products that helped many large employers that were not currently offering benefits! These options proved to be successful in getting employers compliant with ACA employer mandates while not breaking the bank. This year we have introduced new plans and concepts that will do the same thing, and they work for the 50+ market as well!

Let me repeat, I am here to say that we have found a way for applicable large employers that are in this boat today, to become ACA compliant at a cost that they can handle. Let me explain in a little more detail about the type of coverage required under ACA. I know that many of you may have heard this already… others of you have not… so keep reading!

The first type of employer coverage to know is MEC, or Minimum Essential Coverage. If an employer offers coverage that offers 100% coverage without a copay, deductible or coinsurance for the 74 Preventive Services as outlined by CMS (Center for Medicare & Medicaid Services), they then do comply with part “A”, and therefore avoid the “A” penalty.

Under the individual responsibility, ACA states that in order to avoid the penalty for not having insurance, an individual must secure coverage that at least provides MEC. In other words, this is the type of coverage that the law is mandating every American have at a minimum. Hence “MINIMUM” Essential Coverage. The exact definition off of the .gov site for MEC is; the type of health coverage an individual needs to meet the individual responsibility requirement under the Affordable Care Act. This includes individual policies bought through the Health Insurance Marketplace and other sources, job-based coverage, Medicare, Medicaid, CHIP, TRICARE, and certain other coverage. To recap, if an employer offers just the MEC type of coverage, they do insulate themselves from the “Sledgehammer” penalty, the $2000 ($2,160 in 2016) penalty! This also insulates each employee who enrolls in Minimum Essential Coverage from possible fines!

Large employers, those employing 100 FTE’s Starting Jan 1, 2015 and those with 50 FTE’s in 2016 will avoid the $2,000 ($2,160 in 2016) per employee penalty by offering MEC coverage. This however does not make them completely ACA compliant, and does not exempt them from the $3,000 ($3,240 in 2016) penalty. Such an employer would have to pay for any Full time employee who seeks coverage from the Exchange and who qualifies for a subsidy.

Another option is a MVP Plan - Minimum Value Plan. This definitely could be the MOST VALUABLE PLAN to those large employers who simply cannot afford to offer coverage to all full time employees with no more than a 90 day waiting period. The ACA states that in order to be fully compliant with the employer responsibility provisions of the act, an employer’s plan must meet several criteria. One is that the health plan not only provides MEC, but also be designed to pay at least 60% of the total cost of medical services for a standard population. The CMS has provided an online calculator for administrators, carriers, and employers to test their plans to see if they meet this minimum value requirement. If the health plan can pass this test, and if no employee has to pay more than 9.5% (9.6% in 2015) of their Box 1 wages on their W-2 for individual coverage, then the employer would meet the employer responsibility demands made of them under the ACA. They have achieved Safe Harbor!

More good news! Insurance Network has plans available for you and your clients that have passed this CMS calculator test. These plans require no medical underwriting and the pricing is affordable. As I said before, the MVP plans include MEC in the cost, so by offering the MVP plan the employer can protect themselves from any of the ACA penalties imposed for not offering an affordable health plan that meets the Minimum Value testing requirements. The other win is that employees, who most likely had no coverage before, will now benefit from insurance coverage at 100% after a copay for many of the outpatient procedures done today!

DON’T forget to ask us about how to show your client what the costs of not getting into compliance might be vs getting into compliance and how much they can save!  It can be a staggering amount!  We can bring you up to speed and supply you with all the training and tools that are sure to make you the MVP – Most Valuable Partner to your clients!