Monday, December 09, 2013

Affordable Care Act [ACA]

Over the last week I have found that there is a lot of misunderstanding about the ACA or lack of knowledge exist about the ACA. Let me state some information that may be important to you.
  1. The ACA defines full time employees as 30 hours. If you have a group health plan you must offer coverage to  anyone that works 30 hours with some exceptions. Many small businesses in the past have defined full time workers as above 30 hours. This changes Jan 1st, 2014.
[Note: you can reduce the definition of full time to 20 hours but this is not required under ACA. You cannot provide on your group plan employees who work less than 20 hours.]
  1. An employer cannot pay for an employee’s individual health policy and have the payment be on a pretax basis. This was not the case prior to ACA.
  2. If you provide coverage for employees on your group policy you are not required to provide dependent or spouse coverage. Each case needs to be looked at closely but if you have less than 50 employees you may not want to offer coverage as that will disqualify the spouse and dependents from receiving any subsidies from Covered California. If you have 50 or more employees you are required to offer coverage to dependents.
  3. If you have a Health Reimbursement Account (HRA) and your employees have money  in the HRA,  which provides coverage for some Minimal Essential Benefits,  the employee will not be eligible for subsidies in Covered California. This becomes effective Jan 1st, 2014.
[Note: Minimal Essential Benefits do not include Dental and Vision. These are called Excepted Benefits]
  1. Individuals who purchase health coverage from Covered California and are eligible for subsidies receive the subsidy based on the Silver Plan. The individual  then has the option of purchasing a Bronze, Silver, Gold or Platinum with the Silver plan subsidy.
Under the Small  Business Health Option Plan [SHOP], the employer chooses the Metal level and the employee must choose the option available only at that metal level.

What questions do you have about ACA?


Last week I sent out a survey about  employer health coverage. Thank you to all that responded. The most interesting results were about 15% of the respondents said they would be dropping their health insurance. Very few people responded to the question of whether they felt their employees would buy individual  coverage but everyone one that did did not think their employees would purchase coverage. 

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA  94116

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