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Boiling Down the Affordable Care Act

We’ve had a lot of employers request a simple, at-a-glance way to see all the PPACA requirements that apply to their business.  This is no easy task since requirements vary by group size, markets, such as private markets or SHOP exchanges and self-funding variables! Let’s just look at a few provisions that are effective for the plan year beginning on or after 1/1/2014:

Here’s what (non-grandfathered) large group insured plans (more than 50 employees) should be focused on:

  • Eligibility waiting period maximum of 60 days (in California)
    In most cases employers will need to change eligibility waiting periods to 1st of the month following 30 days effective with their Plan Anniversary Date.  Remember, the Plan Anniversary Date may be different than your insurance renewal date if you elected an “Early Renewal” in 2013.  Plan Anniversary is not equal to Insurance Anniversary to regulators.
  • Pre-existing conditions are  not permitted on anyone.1, 2 (see notes 1 and or 2 below)
  • Annual dollar limits are prohibited on “Essential Health Benefits”.1   If you are self-funded, your plan does not need to include “Essential Health Benefits”, but if it does, you cannot impose annual dollar limits on these benefits.
  • Plans must protect individuals seeking participation in clinical trials. 1,2 
  • Out of pocket limits may not exceed $6,350 for an individual or $12,700 for a family. 1, 2
  • Guarantee issue and guaranteed renewal applies if your plan is fully insured.  Stop-loss insurance for self-funded plans in California must offer guaranteed renewal.
  • Wellness program rules are revised. 

For an at-a glance chart of over 40 PPACA requirements, whether they apply to large groups and their respective effective dates, request our more comprehensive check list at  Large Group Insured Plans (More Than 50 Employees) and PPACA 

If you are a (non-grandfathered) small group (50 or fewer employees) insured plan, keep a watch on the following requirements that apply BOTH inside and outside the SHOP exchange:

  • Modified community rating applies
  • Essential health benefits (EHBs) must be offered
  • Deductible generally may not exceed $2,000/$4,000
  • Out of pocket may not exceed $6,350/$12,700
  • Must meet metal levels (60%, 70%, 80%, 90%)
  • Guarantee issue and renewal apply (subject to participation)
  • Single risk pool
  • Revised wellness program rules
  • Eligibility waiting period maximum of 60 days
  • Pre-ex not permitted on anyone
  • Annual dollar limits prohibited on essential health benefits
  • Protections for those in clinical trials

For an at-a glance chart of over 40 PPACA requirements, whether they apply to small insured plans outside and/or inside the SHOP exchange and their respective effective dates, request Small Group Insured Plans (50 or Fewer Employees)  and PPACA

If you are a small OR large self-funded plan, the following requirements should be on your radar:

  • Eligibility waiting period maximum of 60 days
  • Pre-ex not permitted on anyone
  • Annual dollar limits prohibited on essential health benefits
  • Protections for those in clinical trials
  • Out of pocket may not exceed $6,350/$12,700
  • Revised wellness program rules
  • Transitional reinsurance fee, including reporting

For more information on over 40 PPACA requirements, whether they apply to small and/or large insured group self-funded plans and their respective effective dates, request Self-funded Plans and PPACA.

1 If you are fully insured, your insurance carrier will handle this. 

2 If you are self-funded, your Plan Document must be updated.  Administration must follow the Plan Document.

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