Changes for
Large Employers 51+

Health insurance is going through unprecedented changes because of the Affordable Care Act.

If you’re the business owner or the benefits manager, it is important for you to learn about the changes so you can make decisions that are in the best interest of your business and your employees.

These changes go into effect for products you can start purchasing on October 1, 2013, for a January 1, 2014, effective date.

To help you get prepared, we’ve outlined four key areas where things are changing for businesses with 51+ employees.

What is it?

All non-grandfathered plans must include certain benefits to ensure group coverage has the same comprehensive coverage as individuals can purchase.

How does it work?

Nonprofit Service Organization

10 Essential Health Benefits

1. Ambulatory patient services (outpatient)
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services and chronic disease management
10. Pediatric services, including oral and vision care

Type of Plan	What It Covers	Your Pay	Premium Cost
Bronze	60 percent of the medical costs	40 percent of the medical costs	Lowest
Silver	70 percent of the medical costs	30 percent of the medical costs	Medium
Gold	80 percent of the medical costs	20 percent of the medical costs	High
Platinum	90 percent of the medical costs	10 percent of the medical costs	Highest

What is it?

Insurance companies must start using adjusted community rating to determine premiums for small business 1-50 plans with a January 1, 2014, or later effective date.

For businesses with 51 or more employees, these new rating rules will expand in 2016 to include non-grandfathered plans that are sold on the exchange or Health Insurance Marketplace as well as off the exchange.

How does it work?

Adjusted community rating allows the following guidelines to determine group premiums:

• Geographic area
• Small age bands
• Tobacco use
• Individual or family coverage

The following can no longer be used to determine group premiums:

• Industry
• Gender
• Health status
• Medical history
• Claims experience

These guidelines must also be followed:

• Removal of pre-existing conditions
• Guaranteed availability and renewability of coverage (guaranteed issue)
• No medical underwriting

What is it?

Several new taxes and fees go into effect to help fund some of the Affordable Care Act requirements.

How does it work?

The following fees will be included as part of the premium:

What is it?

Penalties that employers with at least 50 full-time or full-time equivalent employees may have to pay if an employee is eligible for a subsidy and purchases insurance on the Health Insurance Marketplace.

How does it work?

There are two types of penalties:

1. Employer Mandate Penalty
2. Minimum Essential Coverage Penalty

Employer Mandate Penalty

• If at least one employee purchases subsidized coverage from the Health Insurance Marketplace, the employer must pay a penalty of $2,000 per year per full-time (30+ hours) employee minus the first 30 employees
• For example, an employer with 100 full-time employees would be assessed a penalty of $140,000

Minimum Essential Coverage Penalty

• If an employer with at least 50 full-time or full-time equivalent employees offers coverage but the coverage is not affordable or does not provide minimum value, the employer may also be assessed a penalty if any of their employees receives a tax credit or subsidy when buying insurance on the Health Insurance Marketplace
• Coverage must have an actuarial value of at least 60 percent (equivalent to a bronze plan) and the employee contribution cannot exceed 9.5 percent of the worker’s income
• The penalty is $3,000 per employee who receives the tax credit or subsidy
• The penalty is capped at the amount the employer would have paid if no coverage were offered to any employees ($3,000 per employee minus the first 30 employees)