As we continue to analyze the new healthcare law, we have prepared these frequently asked questions to help Blue Cross and Blue Shield members better understand what healthcare reform will mean to them. These answers are meant to provide guidance. You should consult legal and tax experts to understand how the law will affect your individual or business circumstances.
What immediate changes should I expect as an employer?
Another requirement effective with plan years beginning on or after September 23, 2010, employers may no longer set lifetime limits on essential benefits. “Reasonable” annual limits on essential benefits are permitted until 2014. The secretary of the U.S. Health and Human Services will define reasonable limits.
Employers with more than 200 employees must also automatically enroll full-time employees as soon as they are eligible for coverage. Employees, however, may opt-out of coverage.
Does the new law require that all employers offer healthcare coverage?
Beginning in 2014, businesses with 50 or more employees that do not offer coverage and have at least one full-time employee who receives a federal tax credit to purchase health insurance on his own through an Exchange, must pay the federal government a $2,000 per-employee penalty. The first 30 employees would be excluded from this assessment.
Employers with 50 or more employees that do provide coverage, but have at least one full-time employee who receives a federal tax credit to purchase health insurance on his own through an Exchange, will be assessed a penalty that will be the lesser of $3,000 per employee receiving a premium tax credit or $2,000 for each full-time employee, excluding the first 30 employees.
Large businesses – those with more than 200 full-time employees – that offer health insurance will have to automatically enroll workers into a health plan. An employee, however, may choose to opt out of this automatic enrollment into their employer’s health plan.
I own a small business and want to provide health insurance for my employees and their families. Are there subsidies or other assistance to help me afford to coverage?
Many small businesses will be eligible for tax credits of up to 35 percent. Businesses that employ fewer than 25 employees, pay average annual wages of $50,000 and pay at least half the cost of single coverage for their employees may be eligible to receive a tax credit.
Employers with 10 or fewer employees that pay annual average wages of $25,000 or less per year may be eligible for up to a 35 percent tax credit in 2010.
In 2014, the tax credit for eligible small businesses will increase to 50 percent of premiums paid.
Full eligibility details will be provided by the Internal Revenue Service. You should review and discuss the full criteria with a tax professional to determine whether your business will qualify.
Can I keep the plan I currently offer my employees?
Yes, but there are certain rules that may apply. Plans in existence on March 23, 2010 are “grandfathered,” meaning that they do not have to comply with certain provisions of the new law unless they are changed. Federal officials will have to clarify what changes would alter a plan’s grandfathered status via regulation. The statute only specifies that enrolling new employees or adding family members will not affect grandfathered status.
My company provides health insurance coverage to our retirees. Will the new law make retiree coverage more affordable?
The new healthcare reform law creates a temporary retiree insurance program that will reimburse employers for qualifying retiree medical expenses. Employers may be reimbursed for up to 80 percent of expenses between $15,000 and $90,000. Retiree expenses of employees over age 55, but not yet eligible for Medicare will be eligible. Employers must submit claims to the Secretary of HHS for reimbursement.
I have a lot of employees, but most only work on a part-time basis. Will I still be required to offer insurance coverage?
Part-time employees will count toward the size-limits requiring coverage on a pro-rated basis based on the number of hours worked.
Where can I find more information about how healthcare reform will affect me?
Use our AskBlue Healthcare Reform guide to find out more infomation about healthcare reform
