Large Group Employers

employerWhile the Affordable Care Act does not require employers to offer health insurance to their employees, beginning in 2015, if you have more than 50 eligible employees and you do not provide health insurance, you will pay a penalty to offset the costs your employees pay buying their own insurance.

An Eligible Employee is anyone that is reasonably expected to work at least 30 hours per week. This does not include employees who work on a temporary basis.

 

Large employers that don’t offer coverage may face a penalty of $2,000 per full-time employee, beginning in 2015. In addition if you offer health insurance that is considered “unaffordable” for your employees, you may also face a penalty. If your employees are required to pay more than 9.5% of their annual household income to cover premiums, coverage is considered “unaffordable”.

For plan years beginning on or after January 1, 2014, employers may not set a waiting period that exceeds 90 days.

What should I look for when choosing a group plan? 

The plan you choose must accept all employees within a certain employee class, and employee family members if you offer dependent coverage – even employees and family members with health problems. However, health insurance companies cannot deny your application because of the health status of your employees or their family members. In addition, the health insurance coverage you choose will come with “guaranteed renewal” – meaning that it cannot be canceled because someone in your group becomes ill. Keep in mind that the insurance is not limited to keep premiums at a certain level, in large group they can increase rates when they see risk in the health status or financial status of a group that is applying or renewing.

What if I currently offer Health Insurance?

Was your group plan in effect on March 23, 2010? If your insurance company allowed, it may be “grandfathered” – which means that is it considered qualified coverage. You will not lose grandfather status if you continue to add employees and dependents to the policy. However, if your employer has allowed the coverage to be reduced or your portion of the premium has increased, it may have lost it’s grandfathered status. At that point, your employer would be required to select a new health care plan.

What if I would rather help pay for my employees individual health care plans rather than purchasing a group plan?

This is not allowed under new Health Care Reform laws, both the IRS & Department of Labor have issued bulletins and regulations coming out against use of employer funds to pay for any portion of individual premiums. You probably have better options anyway. Give us a call to find out what they are.

Due to the complexity of the group insurance we recommend a one-on-one conversation to insure that all options have been explored. Please call 303.667.7123