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As the final stages of the Affordable Care Act (ACA) go into effect, new insurance options are opening up for small businesses as well as individuals.
Last week, the Chamber of Commerce conducted the second of four workshops designed to steer small business owners through the key points of the new system, facilitated by Terry Linton.
Although businesses with two to 50 employees are not required to provide insurance for their employees, and there will be no penalty if they don’t, the ACA has provisions to make insurance more accessible and affordable to them.
The Small Employers Health Options Plan (SHOP) is the key instrument for that, offering small employers tools for selecting the best options for their business.
SHOP allows employers a choice of Qualified Health Plans (QHP), plans that meet the basic requirements of the ACA. It assembles all the plans in one place for easy comparison and allows employers to register online.
New Mexico’s health insurance exchange offers four providers: Blue Cross/Blue Shield, Lovelace, Presbyterian and the newly formed New Mexico Health Connections. NMHC is a non-profit cooperative created with grant money from the ACA. NMHC is New Mexico’s first venture into nonprofit insurance.
United Health Care is not participating in the exchanges.
Under ACA exchanges, employers will choose the “metallic” level of coverage (bronze, silver, gold or platinum) and employees will choose the provider. Even if employees enroll with all four providers, the employer will receive one bill and write one check, with the exchange dispersing the premiums to the carriers
One impediment for small businesses wishing to offer insurance has been the fact that many companies require 75-percent employee participation —a high bar for most small enterprises.
Those who act quickly can take advantage of the ACA “Golden Enrollment Period.” During the months of November and December, businesses can enroll with no minimum employee participation. After the grace period, minimum enrollment will be 50 percent of eligible employees.
SHOP was off to a busy start last week. Approximately 500 small businesses had signed up in the first two days of enrollment.
One key provision employers should be aware of is the small employer tax credit for businesses with 25 or fewer employees whose average salaries are $50,000 or less. This provision actually kicked off in 2010, with a 35 percent tax credit for businesses and a 25 percent credit for non-profits.
When full ACA implementation goes into effect Jan. 1, only small businesses buying insurance on the exchanges will be eligible for the credit, but it will increase to 50 percent.
Employers already offering insurance should be aware of some key provisions in the ACA that become effective Jan. 1, 2014.
The waiting period for new employees cannot exceed 90 days. Many employers have a 90-day waiting period, with insurance starting on the first of the month following that, which would put them out of compliance with the new law.
Since most insurance companies start enrollment on the first of the month, Linton recommends that policies be rewritten to start eligibility on the first of the month after a 60-day waiting period.
The new law also defines full-time employment as 30 hours a week, not the 40 hours many employers use now.
“So if you have in your plans right now anything over 30 hours a week as eligibility criteria, you need to change that,” Linton said. “It’s okay to have it 20 hours a week if you want, but 30 hours a week is the maximum amount for eligibility for health insurance.”
New Mexico’s website for the new exchanges is bewellnm.com. The site has links for businesses, individuals, as well as a link for Native Americans, who may be eligible for special cost exemptions.
Insurance agents and brokers can help with navigating the new law. The state also has more than 300 specially trained health care guides (check the website for the nearest ones or call 1-855-99-NMHIX).
Open enrollment continues until Dec. 15 for a Jan. 1, 2014 start date. To jumpstart implementation, the enrollment period is extended until March 1, 2014, with a July 1 start date for those enrolling after Dec. 15.
The state did not have the means to implement an exchange for individuals in time for the ACA launch, so individuals will be directed to the federal exchange for insurance options.
The Chamber has two more small business workshops scheduled, one from 5–7 p.m. Oct. 23 and another from 7:30–9:30 a.m. Nov. 7. The workshops are free, thanks to a grant from the New Mexico Health Insurance Exchange, but registration is required.