Benefits, HR News & Trends

The Health Insurance Exchange Shuffle: What You Need to Know

Health care reform2

There is no doubt about it — the health care reform smorgasbord choices requiring employer attention are growing.

Our clients report that some are easier to digest than others. The key provisions of the Affordable Care Act – the health insurance coverage mandates, large employer coverage requirements, health insurance exchanges, guaranteed issue and renewability, pre-existing condition exclusions, insurance premium restrictions, nondiscrimination rules, annual limits, waiting periods, limits on cost-sharing, wellness programs, tax credits — are set for implementation in 2014.

Our clients, including our broker-partners and employers, are working hard to understand the provisions of the health reform law in order to provide the best possible benefits solutions and comply with all of the law’s requirements.

Health care exchanges postponed

Based on the volume of questions that we are receiving on the ThinkHRLive Hotline, there are a few areas of the health reform rules where our clients need more perspective, including understanding how the health insurance exchanges will work for individuals and small employers next year.

So let’s focus on the “special of the day” today — the government-run health insurance exchanges and a recent announcement from the U.S. Department of Health and Human Services (HHS) postponing implementation of the choice of options programs.

  • What has been postponed: The implementation of the requirement that government-run health insurance exchanges offer small businesses and their employees the ability to select from various competitive health plans through the health insurance exchanges for small businesses, called SHOPs.
  • Postponement date: Initially scheduled for implementation on January 1, 2014, now postponed to January 1, 2015.
  • Who does this impact: Small employers and those businesses’ employees. For this purpose, a “small employer” is defined as an employer that employed an average of at least one but not more than 100 employees on business days during the preceding calendar year, and employs at least one employee on the first day of the plan year. States generally have the option to define “small employer” by substituting “50″ for “100″ until 2016.
  • What does this mean for small businesses?
    • For the states that have opted out of running their own state exchange and are relying on the federal government to provide the SHOP options, this means that small businesses will only have one health care option from the government to choose from instead of a range of competitive options (as promised under the ACA) until 2015. The federal government has admitted that they were not able to do that as the program is currently configured (thus the delay until 2015).
    • To clarify, beginning in 2014, small business owners will still have access to an exchange opening for enrollment on October 1 that will allow them to make decisions between one government plan and any other plans identified by their insurance brokers that fits their budget and benefit needs. But for those states relying on the federal government exchanges, there will only be one health care option available from the government.
    • For the states that have been creating their own state-run small business exchanges and are preparing for a competitive market implementation for 2014, those states will be given the option to either go live on schedule for 2014 with full choice options or delay the choice option implementation until 2015. As of today, most states have not publicly announced their plans to move forward or delay the choice options under their plans.
    • For small business owners expecting to be able to offer cost-effective health insurance options to employees, they will need to work with their insurance brokers to identify additional options for coverage in private sector plans.
    • With respect to the small business tax credits for buying health coverage from the exchanges that is part of the Affordable Care Act, the government is stating that the tax credits will continue to be available to those employers that buy the government option.

Additional government agency guidance is expected to clarify how the limited SHOP options will work in 2014. ThinkHR will continue to monitor this development, along with other aspects of health care reform compliance, and keep you informed.

Laura Kerekes is the Chief Knowledge Officer for ThinkHR. She applies her extensive human resources and general management experience to a broad range of services for her clients, including: strategic HR consulting, interim human resources executive assignments and compliance/OD/training. Contact her at lkerekes@thinkhr.com.