Your Trusted Advisor on the Healthcare Reform Law
With all the changes implemented by the Patient Protection and Affordable Care Act (PPACA), it is more important than ever to partner with an independent agent who can keep you up-to-date on the health care reform.
Jennifer Krog, our PPACA certified agent, can help evaluate the impact of the ACA on your business and your employees, keep you educated and informed on upcoming health care requirements, coordinate your benefits package with your workers’ compensation coverage and fiduciary liability, and discuss the online tools that are available to support your Human Resources operations.
Consider us your go-to resource for everything ACA:
The total number of full-time equivalents (FTEs) determines whether a business is subject to the employer shared responsibility mandate. Large group employers with 50 or more full-time employees or FTEs are required to offer health coverage to at least 95% of full-time employees.
The number of hours worked by all part-time employees is combined to determine the number of FTEs. This number is calculated by adding your total monthly part-time hours and dividing the sum by 120.
Scheduled to take effect in 2022, the “Cadillac Tax” is a 40% excise tax on high-cost employer health care plans that exceed an established annual cost. The current threshold is $10,200 for individual coverage and $27,500 for family coverage and will increase each year with inflation.
As a result of the Cadillac Tax, health care costs are expected to increase. Although health insurance premiums may not necessarily increase, the costs of labor, tests, and other services provided by health providers who exceed the threshold will likely increase.
Unlike employers who have a fully-insured plan, those with a self-funded structure assume partial financial risk for providing health care benefits to employees, up to a certain level. Once that level is met, a reinsurance or stop loss insurance company will cover claims that exceed a predetermined amount.
In other words, in a self-insured health plan the employer is responsible for paying all claims out-of-pocket with a reserve that is specifically set aside from company assets.
Because self-funded plans can be customized to your needs, the resulting program benefits tend to be richer than traditional health plans. Another benefit of a self-funded health plan is that renewals are based on the company’s personal claims experience, so if it was a good year with fewer than expected claims, the company will benefit.
If you have additional questions about whether self-funding is right for your business, contact Jennifer Krog, our self-funding certified agent.