Healthcare Reform Employer Mandates Review

With the recent signing of the Patient Protection and Affordable Care Act many employers will face numerous changes to their health care plans. It is our goal at CG Benefits Group to provide you with the most comprehensive resources for understanding your health care requirements as an employer.

Some of the mandates that will be required in the future:

1. Lifetime and annual limits
2. Coverage of adult children
3. Pre-existing conditions exclusions
4. Employer play or pay provisions

Lifetime and Annual Limits

Effective in 2010 group health plans may not establish lifetime limits or “unreasonable,” annual limits on the value of essential health benefits. Health and Human Services has to still define what constitutes unreasonable limits and essential health benefits.

Coverage of Adult Children

Effective in 2010 a group health insurance plan must provide coverage of an adult child until age 26. The adult child may not be eligible for other employer sponsored health care. It is important to note that New Jersey has been a leader in insuring adult children up to age 31. This segment of adult children are the largest group of uninsured Americans, so this extended coverage nationwide will help many people secure insurance.

Pre-existing Conditions Exclusions

No group plan may limit coverage for pre-existing conditions for children under the age of 19. Beginning in 2014, a group health plan many not limit coverage of anyone for pre-existing conditions.

Employer Pay or Play Provisions

By far the most controversial portion of the bill in our view is the employer pay or play mandate. According to the reform bill, employers with over 50 employees will be required to offer “affordable” health insurance or they will face large fines. Fines can reach up to $2000 times the number of full time employees if an employer does not offer health insurance coverage. Employers who do not provide “affordable” coverage will be fined $3000 times the number of employees receiving federal subsidies. The health and Human Services office will have to clarify what is considered affordable for each region of the US. In my opinion this mandate will be unfair to large employers in the service and hospitality industry. One of our clients who owns multiple restaurants will have to offer coverage to his servers. I don’t think this is fair; in the past many restaurants only provided health insurance to their management and not for servers or other lower wage workers. It is not clear from the bill, if all employers who have over 50 employees will have to conform to this mandate or if there will be additional requirements based on the type of business, revenue received, or workers income.

Do you have any questions about the health care bill? Please post your comments and we will have a licensed insurance professional answer your query.