Health Care Reform for Small Employer Groups
Beginning January 1, 2016, a small employer is defined as a business with up to 100 full-time employees, including full-time equivalents. This definition determines whether a Colorado-based business will be offered metal-level plan options and be rated as a small employer group.
If you offer the same group health coverage that was in place on March 23, 2010, you may be enrolled in a Grandfathered Health Plan (see non-grandfathered plan for specifics). RMHP will continue to offer these plans to you and the group size change for small employers will not affect grandfathered plans.
No matter what plan you have, your business must comply with the new waiting period requirements for health insurance eligibility. The waiting period limit can be no more than 90 days for newly eligible full-time employees.
Your company may introduce an orientation period of up to 30 days that can be added on to your waiting period, resulting in up to 120-days before coverage is offered. RMHP will allow a maximum waiting period of the first of the month following 2 months of employment, or the first of the month following 3 months of employment when an orientation period is established. We know this can be complex; please contact us with any questions.
The ACA health plan requirements state that all health plans offered in the small group and individual markets include specific benefits and cost-sharing values.
The specific benefits to be included in all ACA-compliant plans are called Essential Health Benefits (EHB). They include:
- Ambulatory patient services
- Emergency services
- Maternity/newborn care
- Chiropractic services
- Bariatric services
- Infertility services
The specific cost-sharing values will have a standardized label to describe how benefits are covered.
- Bronze (60% AV)
- Silver (70% AV)
- Gold (80% AV
AV = Actuarial value. This means the percentage the plan will pay on average toward the cost of care. The amount the plan pays for any individual's care will vary.
For example, a Silver plan will cover (on average) 70% of the overall costs of the covered benefits.
If you have made a plan change (for example, if you have increased your deductible or cost-sharing on benefits), decreased your contribution by more than 5%, or changed insurance carriers to enroll in a different health plan after March 23, 2010, you are most likely enrolled in a non-grandfathered health plan.
Small employers with less than 50 full-time employees, including full-time equivalents, will not face any penalty if they do not to provide coverage to their employees.
If you have employees who work less than 30 hours, you will need to track their hours of service each month.
Add their collective hours together for the month. Divide by 120. This will give you the full-time equivalent number.
If you have less than 50 full-time employees, including full-time equivalents, you are not subject to payments or penalties for not offering “affordable” coverage.
If the group health coverage you offer is determined to be “unaffordable” for one or more of your employees, those employees and their dependents may be eligible for premium tax credits on an individual health plan offered through Connect for Health Colorado.
No. “Related Individuals” are family members eligible for group health coverage. Related Individuals will not be eligible for premium assistance if the employee's contribution for self-only coverage is at or below 9.5 percent of their household income, regardless of how much they must pay for family coverage.
Health Care Reform for Large Employer Groups
Beginning in 2015, large employers who meet the definition of an “Applicable Large Employer” must offer affordable healthcare coverage to their full-time employees or be subject to financial penalties.
If you add together the number of full-time employees and full-time equivalent employees, and the number is 51 or greater, you are an Applicable Large Employer.
Full-time employees who work 30 hours or more per week, or 130 hours or more in a calendar month.
- Add their collective hours together for the month and then divide by 120. This will giver you the full-time equivalent number.
- Example: Employer X has 25 employees who each average 80 hours of service per month (20 hours/week)
- The 25 part-time employees are aggregated (25 x 80 hours) and divided by 120: (25 x 80 = 2000/120 - 16.6)
- Employers are allowed to round "down" to the next lowest whole number
- Employer X has 16 FTEs (Full-Time Equivalents)
- All full-time employees (30 hours or more per week)
- Dependent children of the employee up to age 26 (includes adopted children, foster children and stepchildren). Coverage for spouses is not required.
Final regulations provide two Measurement Methods employers can use for different categories of employees.Measurement methods provide a structured timeline using information about employees you employ to determine their full-time status.
FAQs from the IRS provide more detail on these Measurement Methods.
Applicable Large Employers are required to report certain health coverage information to the IRS and to furnish certain related employee statements to full-time employees.
Employee Statements (Similar to a W-2)
- Provides specific information about the employer's offer of health coverage.
- Specific Form to complete (Form 1095-C*) Employers meeting specific criteria may use Alternative Method A.
- Can be mailed or sent electronically (with prior consent from employee).
- Must be furnished on or before January 31st following the calendar year for which the report is due.
Transmittal Form Filing to IRS
- Provides aggregate employer-level data for all full-time employees.
- Specific Transmittal Form to complete (Form 1094 -C) Employers meeting specific criteria may use Alternative Method B.
- Must be sent electronically (if employer has 250 or more full-time employees, optional for employers with less than 250 full-time employees).
- Must be submitted to IRS on or before: February 28 (paper submission) or March 31 (electronic submission) following the calendar year for which the report is due.
Alternative Methods of reporting may be available. Please refer to the FAQs from the IRS above.
- Offer Minimum Essential Coverage (MEC) to at least 95 percent of all full-time employees and their (child) dependents.
- Coverage offered provides Minimum Value (MV). MV is defined as covering at least 60 percent of the total allowed costs of benefits expected to be incurred under the plan. For example, your plan must cover (on average) 60 percent of the overall costs of the covered benefits.
- Provide Affordable coverage. Affordable coverage is defined as the employee’s share of the annual premium costs (for Employee-Only Coverage) being no more than 9.5 percent of their annual household income.
Let's Create a Benefit Program That Works For You
- For Employer Group Plans
Healthy employees build healthy businesses, and your employees receive the health protection they expect and deserve when you partner with RMHP. Whether you’re a small business or large employer, we have a group health insurance plan that will fit your employees’ needs.
- For Individual and Family Plans
Our plans offer the coverage, network, and health management resources you and your family need for your Colorado lifestyle. Get the personalized attention and quality care you deserve from your local health insurance option that has been serving our communities for over 40 years.