Countdown To Affordable Care Act Implementation: Key Information For Michigan Businesses

MBPA is actively monitoring the Affordable Care Act’s (ACA) implementation and the impact on Michigan businesses. We urge you to use this brief while conducting final ACA preparations; these are the key ACA provisions you must know about as we approach 2014. Links to files referenced below will be posted on the MBPA member website.

1. Small Business & Individual Healthcare Marketplace Go Live:
In October 2013, the federal government will launch an individual and small group (“SHOP”) health marketplace and begin open enrollment. Initially, only businesses with 50 or fewer employers may elect to purchase health insurance via the marketplace. Key developments you should be aware of:

Michigan decided that the federal government will operate its health marketplace in 2014. In the future, Michigan may play a role in operating the marketplace or assume operational control.

• The federal government is evaluating which insurance carriers (and plans) to offer.
• All health plans will include a baseline set of essential benefits modeled after a benchmark plan that Michigan has selected – Priority Health HMO.
• In 2014, the marketplace will allow small businesses to select one health plan option, rather than offering employees the choice of multiple plans. Multiple options will become available in 2015.
• Small businesses can purchase health insurance on a rolling basis via the marketplace; they are not tied to a specified open enrollment period (like individuals).
• Licensed agents may continue to assist small businesses that choose to purchase insurance via the marketplace. They may do so by using an insurer’s website or the marketplace website. Insurance carriers will pay commissions; agents must register with marketplace and undergo training before assisting customers.
• Some of your employees may be eligible for subsidized health insurance if they purchase individual policies via the healthcare marketplace and earn less than $45,960 ($94,200 for a family of four).

2. Employer Penalty Delayed for Business with 50 or More Employees:
The federal government, due to pressure from MBPA and businesses nationwide, delayed implementation of the employer penalty. Key developments you should be aware of:

The employer mandate and penalty will take effect in 2015 (delayed from 2014).

In 2014, the federal government plans to work with businesses to simplify reporting requirements and allow time for businesses to develop systems for compiling and reporting data.

3. New Insurance Market Rules Take Effect for Small Group Policies:
New requirements for insurance plans have been phasing in since the ACA passed in 2010. In 2014, the final market protections take effect. Key developments you should be aware of:

• Regulations detail how grandfathered health plans maintain their status and which market protections are still applicable. Similarly, the federal government has detailed this for self-insured plans.
• Controversy persists about new community rating rules and their rate impact; in 2014, insurance carriers may only vary rates based on geography, family size, smoking status, and age (age rate differences may only vary by a factor of three).
• 2014 will be closely watched for rate changes driven by additional requirements for individual and small group policies including the requirement to offer a minimum, essential benefit package and implement deductible limits.

4. Employee Communications Required:
Before October 1, all employers must notify their employees about the healthcare marketplace. Key developments include: The federal government created model notification forms to ease this communication.

• The requirement to report the cost of employee coverage continues to be suspended for firms with fewer than 250 filed W2 forms until further notice.

5. Individual Mandate Takes Effect:
While the employer mandate is delayed, business owners must themselves have health insurance in 2014 or face a penalty. The same is true for your employees. Key developments you should be aware of: 

• The federal government detailed circumstances where a hardship exists and the individual mandate is not in effect.
• The feds outlined what is considered “minimum essential coverage,” which is the standard for satisfying the individual mandate.
• The feds provided applications for individuals who wish to access coverage via the healthcare marketplace; employees may solicit your assistance with key questions on applications particularly concerning existing healthcare coverage and income.

6. Expanded Wellness Incentives Available:
Employers may offer employees up to 30% – or where authorized 50% – off of the cost of health coverage if they participate in wellness programs, and in some cases, meet specific health standards. A key development you should be aware of:

• The federal government issued final guidance on the details of expanded wellness programs. Regulations are complex and should be analyzed if you choose to take advantage of these options.

Quick Glance Calendar

2013
Late Summer

• Expect increased press around the healthcare marketplace launch and speculation on whether the technology infrastructure is sufficient for a smooth launch.
• Expect state community based organizations and the federal government to publicize the health marketplace and offer enrollment assistance to individuals and small businesses.
• Expect the federal government to announce which health insurance carriers and plans will be available for individuals and small businesses via the healthcare marketplace.

Early Fall

• Notify your employees about health reform.
• Decide whether to purchase health insurance for employees.
• Decide whether to purchase via the marketplace.

October

• The health marketplace launches and open enrollment begins.

2014

January

• Coverage purchased via marketplace takes effect.
• New market rules on health reform take effect in individual and small group market.

Onward

• Feds work with businesses to finalize employer penalty regulations for 2015 implementation.
• Feds strive to improve the health marketplace for small businesses, specifically working to offer businesses a choice of plans.