Bridgepoint Hosts Event to Share ACA Updates
The Affordable Care Act deadline seems to be a moving target with many unanswered questions. Bridgepoint recently hosted a group of CFOs at Hanger Orthopedics to discuss the latest updates, pending implications and what they really mean. Todd Panter and Darryl Simchak, Managing Directors at Wortham Insurance & Risk Management, were on hand to lead the discussion. The following information summarizes a few of the key take-aways from the meeting.
While the employer mandate of ACA has been delayed, there are still issues that employers have to comply with:
- All employers subject to Fair Labor Standards Act (FLSA) must send out a Notice of Exchange to all employees by October 1, 2013. And the COBRA election notice must be updated to provide information about the exchanges.
- Two fees must be paid by all plans:
- Patient Outcomes Research Fees – $1.00 per member per year (pmpy) for 2013 and $2.00 pmpy for 2014 (HRAs integrated with fully-insured plans are also subject to this fee)
- Reinsurance Fee – effective for 3 years – 2014 – 2016 – $63.00 pmpy
- There is a Health Insurance Company Tax for fully insured plans only. Amount varies based on market share of the insurance company (approximately 1-3% of premium in 2014). It is expected to raise $8 billion in 2014 and increasing to $14.3 billion 2018.
- Small Group fully insured plans have a maximum deductible of $2,000 in 2014
- Total Out-of Pocket (OOP) cannot exceed HSA HDHP limits – $6,350 for self-only coverage, $12,700 for family for 2014. This maximum includes all participant cost sharing (e.g., Co-insurance, Co-payments, Rx Co-payment, etc.).
- Small group fully-insured plans will be subject to community rating in 2014
Many employers offering fully-insured plans are considering self-funded plans to avoid some of the requirements of ACA. Those requirements include the Health Insurance Company Tax, the maximum deductible of $2,000 and community rating. One of the major concerns about self-funding is the variability of monthly claims and its impact on cash flow, especially for smaller employers. The insurance industry has responded and are now offering level funded self funded plans that maybe an option for some employers.
The implementation of ACA is constantly changing and it appears that the insurance industry is also trying to change to offer more alternatives to employers. There is a lot more we need to know, but we just do not know what it is yet.