PPACA 2014 Compliance Update

Please note that the rules and regulations changes on a regular basis by the Obama

administration. To date there have been 35 changes or delays. It is our practice to update this

document on a regular basis so stay connected with us for future posts.



• No lifetime maximum benefit

• Children up to age 26 can stay on parent’s coverage

• No preexisting clauses for children under 19

• SBC’s are required by employers to provide to employees. This is a multi-page benefit summary of

benefits provided by carriers that describes benefits in detail. The carriers are required to send them out

and employers are required to distribute them to each employee. Our agency upon renewal sees to it

that our clients are provided with these summaries. There is a $1,000.00 fine per employee if they are not provided.

• There is a provision called MLR. That stands for medical loss ratio. It requires that in small group if a

carrier pays out less than 80% in claims they must return the difference to the insured. In Large group the % is 85%.

EFFECTIVE 01-01-2014

The U.S. Supreme court said fines for not having medical coverage were to be called taxes. So listed are

the taxes one will pay for not having coverage-

• 2014 Greater of $95.00 or 1% of taxable income

• 2015 Greater of $325.00 or 2% of taxable income

• 2016 Greater of 695.00 or 2.5% of taxable income

For individual plans bought through a government exchange- A person can be subsidized if their income

is from 133% and 400% of the federal poverty level (FPL) *individual $14,856 to $44,680 *family of four

$30,656 to $92,200. (Premium credits for any plan,) Cost sharing subsidies Silver plan only. Co-pays and deductibles count towards out of pockets expenses.

These changes will apply to groups with less than 50 eligible employees. Changes will be implemented

on a plan’s renewal date in 2014. Community rating means that there will be no difference in rates

between sexes. There will be only age brackets (some carrier’s use composite rating for certain sized

groups) Rates will be based solely on geography and ages. There can be no more than three times

difference between one age bracket and the other. There will be no pre-existing condition exclusion and

no occupational rating. Sic codes will not be used and there will be no association discounts or volume discounts.

Employers can’t deduct more than 9.5% of an employee’s total wages for the employee portion of their premiums.

For more clarification check out Questions and Answers on Employer Shared Responsibility Provisions Under the ACA

Another resource is the US Chamber on the Health Reform website. All the information in this briefing are based on notes, conferences, and newsletters from the industry, my health underwriters association and insurance carriers. Nothing stated here takes the place of any legislation and is not legal advice and should not be considered a legal interpretation of the ppaca legislation.

Beginning 01-01-2014 all group medical plans must include the following essential benefits-if an

employer plan includes these benefits an employee cannot receive a subsidy from the Government.

If the employer deducts more than 9.5% form an employee’s check for their portion of premiums the

employee can apply for a subsidy and may also apply if they are not offered coverage.

• Ambulatory patient services

• Emergency services

• Hospitalization

• Laboratory services

• Maternity and newborn care

• Mental health and substance abuse services, including behavioral health treatment

• Prescription drugs

• Rehabilitative and habilitative services and devices

• Preventive and wellness services, and chronic disease management

• Pediatric services, including oral and vision care

Although not part of ppaca this is another mandate for all covered under

medical insurance

• Women’s Health and Cancer Rights Act

• In 1998, Congress passed legislation that outlines specific coverage

• that all group health plans and health insurance carriers offering

• Medical and surgical benefits for mastectomies must offer to patients.

• This coverage is for:

• Reconstruction of the breast on which the mastectomy was

• performed

• Surgery and reconstruction of the other breast to provide a

• symmetrical appearance

• Prostheses and the treatment of physical complications during

• all stages of the mastectomy, including lymphedemas, in a

• manner determined in consultation with the attending

• physician and the member

• Coverage of these services is subject to the same copayments,

• deductibles and coinsurance percentages, if any, as other services

• covered under your plan. Please refer to your Certificate of Coverage

• for more specific information. Please contact your administrator or

• call Member Services at the phone number on the back of your

• insurance identification card for more information


Small group size under fifty employees

Rules for small group – no rate up in premiums for medical conditions- no declines for medical

conditions- no sex rates only age and geographical- one age band cannot be more than three times

higher than the other-sic codes cannot be used for rating purposes-no volume discounts will be applied

not mater the number of employees.

Large group

Update as of 02-12-2014

The White House announced a delay Monday, Feb. 10 in the requirement on businesses to provide

worker health coverage. For some employers who have 50 to 99 employees they have another one

year delay to 2016. For larger employees they will only have to cover 70 percent of workers in 2015

and then 95 percent the following year and thereafter.

As in the original ACA provision, companies with fewer than 50 employees will not be required to

provide health care coverage. View the Treasury/IRS final regulations, FAQs and Fact Sheet for

more information.

Large groups will be guaranteed issue but premiums can be rated up for health conditions.

Rates for large group are based on sex and age; sic codes, size and zip codes and health


What ACA requirements are delayed in 2014?

• Employer Mandate: Employers must offer coverage to employees who work on average 30+ hours per week or be

subject a penalty.

• Affordability: Coverage must be affordable to avoid a penalty (i.e., the employee’s share of the coverage cost cannot

exceed 9.5% of the employee’s household income).

• Minimum Value: Coverage must provide minimum value to avoid a penalty (although this requirement is waived,

employer must still report whether a plan provides minimum value on the SBC).

• Certain Reporting Requirements: Employers (and insurers) must provide information regarding employees and

coverage in order to facilitate enforcement of the employer mandate.

What ACA requirements remain effective in 2014 for employers?

• SBC: Summaries of Benefits and Coverage must be distributed during open enrollment for the 2014 coverage period

and must indicate whether the plan provides minimum value.

• Exchange Notices: Employers must distribute exchange notices to employees by October 1, 2013, and thereafter to

new employees upon hire.

• Application for Advance Premium Credits: Employers are required to complete a 12 page form entitled, “Application

for Health Coverage and Help Paying Costs” when requested by employees who are applying for advance premium

tax credits when purchasing coverage on the market.

• ACA Fees: Patient-Centered Outcome Research Institute Fees (“PCORI Fees”) must be paid in July 31, 2013 for

years ending before January The first Transitional Reinsurance Fee must be paid on or before January 15, 2015.

• W-2 Reporting: Employers must continue to report the aggregate value of health coverage on Forms W-2 The rules

for 2013 will be the same as applied for 2012.

• Counting Period for Employer Mandate: Employers that need to determine whether they will be subject to the

employer mandate in 2015 (50 or more full-time or full-time equivalent employees in 2014) will need to record

employee hours in 2014. It is not yet clear whether a short counting period will be available which means that

employers may wish to track hours on a per-employee, monthly basis beginning January 1, 2014.

• Measurement Period for Employer Mandate: Employers will need to count employees and record hours over the

applicable measurement period to determine which employees are eligible for coverage offers effective January 1,

2015, under the employer mandate. It is not clear whether the transitional measurement period will no longer be

available and employers may want to count hours over a 12-month Standard Measurement Period commencing

November 1, 2013. This would afford employers a two-month administrative period at the end of 2014 in which to

evaluate eligibility data and extend coverage offers to eligible employees. It is not clear whether the employer

mandate will be effective on January 1, 2015 or the renewal date in 2015.

• Benefit Mandates For All Plans: Plan design requirements for all plans continue to apply (e.g., maximum 90-day

waiting period, no limits on preexisting conditions or essential health benefits, and expansion of wellness incentives).

• Benefit Mandates for Non-Grandfathered Plans Only: Plan design requirements for non-grandfathered plans only

continue to apply (e.g., limits on out-of-pocket maximums, coverage for clinical trial-related services, and provider

nondiscrimination, and for small group health plans, limits on annual deductibles).

What ACA requirements for individuals remain effective in 2014?

• Individual Mandate: Individuals must have health care coverage or pay a penalty.

• Exchanges: Public exchanges are still scheduled to offer coverage effective January 1, 2014.

• Subsidies: Premium subsidies will be available to help eligible individuals buy policies on the exchange.

A link to Notice 2013-45 is provided below:


EFFECTIVE 10-01-2013

All businesses whether they offer a group medical plan to their employees or not will be required to send a notice of

marketplace options for 2014. For an employee to apply for coverage on the exchange they will be required to list

information on the form. One factor that will play into the subsidy’s if whether an employer sponsored plan meets

essential benefits. The following are important links to follow for updated information

Technical release www.dol.gov/ebsa/pdf/tr13-02.pdf

For employers who offer coverage www.dol.gov/ebsa/pdf/FLSAwithplans.pdf

For employers who do not offer plans www.dol/ebsa/pdf/FSLAwithoutplans.pdf

A very interesting article on health insurance exchanges


This is a link to health and human services that give medical insurance cost across the country

with and without subsidy’s. Hers is a question to consider, where does the subsidy’s come

from? How much is set aside for them? How long can they last? What happens if some of the

taxes funding the law is repealed such as the durable medical equipment tax of 2.4%. The DME

industry reports that research and development because of the tax is being stifled. These are

things to consider.


Businesses that have more than 50 employees cannot be turned down by a carrier but can be

rated up as high as the carriers deem based on medical conditions.

All sized groups

All groups regardless of size must contain 100% coverage for preventative screenings. The

covered procedures can be found on www.healthcare.gov and do a search on preventative

care. One should remember that when you go to a provider for these screenings do not go

there for any other purpose. It would be advisable to make sure the doctor’s office codes the

screening as preventative.

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