The intent of the Affordable Care Act (ACA) was to make health insurance affordable for all and to enable those who have insurance to keep their current plans if they meet their needs and comply with the law, says Marty Hauser, CEO of SummaCare. What we’ve seen in the last year is a significant amount of confusion as the law is implemented and more innovative options becoming available to employers.
By far, the most popular decision by employers has been to keep their existing plan. In many cases, this has been considered the easiest and least costly option. We’ve found 82 percent of our employer groups have opted to keep their existing 2013 plans through 2014.
In March, the Centers for Medicare and Medicaid Services announced it would extend the transitional relief policy, which allows individuals and small groups to keep their existing coverage for another two years, through Oct. 1, 2016. This certainly continues to be a viable option for employers in the near term.
Other groups have selected to go on the Small Business Health Options Program (SHOP) to help employees get coverage. Some have found the SHOP can save them money. Yet other employers have gone to private exchanges, like mysummacare.com, which shows all of one company’s plan options. Other private exchanges are provided by third parties and give access to plans offered by multiple insurance companies.
A very recent IRS ruling has indicated that employers who use after-tax dollars to provide funds to employees to buy insurance, either through a qualified health plan in the marketplace or outside the marketplace, and employers who provide employees cash compensation in lieu of a health insurance plan will be heavily penalized.
A new option being tested and explored in the health insurance industry is to aggregate small employers with other small employers to create a self-funding option. Pooling the small employers together and providing various levels of stop loss and re-insurance allows the risk of self-funded insurance to be spread out beyond an employers’ small group of employees.
While the ACA has provided lots of opportunities to employers, it has also brought about plenty of confusion. None of the options are perfect for all employers. Because of the complexities of buying health insurance, employers now need to seek guidance and counsel from multiple sources, such as their attorneys, tax accountants, benefits consultants and carriers to see what’s best for them.