With the recent Supreme Court decision to uphold the Affordable Care Act, there is much speculation on how this legislation will change clinical practice. While the unknowns are greater than what we currently understand about the ACA, the AASM has been analyzing what is in store for sleep medicine. Over the next several weeks, the AASM website will provide a synopsis of certain provisions in the bill. This week will focus on employer requirements.
Beginning in 2014 employers with at least 50 full-time employees will have to provide “qualified” health insurance coverage to their full-time employees and their dependents. Qualified coverage means that plans are comprehensive (pay at least 60 percent of health care expenses) and affordable (cost less than 9.5 percent of employees’ household incomes).
If employers do not offer qualified coverage, and if their employees purchase coverage instead through a new state insurance exchange with the assistance of federal subsidies, companies will have to make an “assessable payment” of up to $2,000 for every full-time employee beyond the first 30 employees. The amount of the assessment will be adjusted annually to reflect the growth in national insurance premium costs.
If employers offer coverage, but the coverage does not meet certain parameters, they may still have to pay assessments. Employers will be assessed if the coverage is comprehensive which means the plans has an “actuarial value” of at least 60 percent.
Employers will also be assessed if the employees’ premiums are considered unaffordable relative to their household incomes. Specifically, the employee’s share of the premium must not exceed 9.5 percent of his or her annual household income.
Starting in 2014, if employers do not meet the comprehensive or premium requirements, the employer must pay a $3,000 annual assessment for each employee who declines his or her employment-based insurance and obtains government-subsidized coverage through an exchange.
Small businesses with fewer than 50 full-time employees do not have to meet the requirement and are exempt from having to offer health insurance. However, the ACA encourages small businesses to offer health insurance to their employees by making tax credits available for two consecutive years to firms with fewer than 25 employees whose average annual salaries are less than $50,000. The amount of the tax credit is up to 35 percent of the employer’s contribution to employee health premiums.
Employees who earn less than four times the federal poverty level (in 2011, $43,560 for an individual and $89,400 for a family of four) and whose share of the premium is between 8 percent and 9.5 percent of his or her household income, can choose to enroll in an exchange instead of the employer plan. The employer must issue the employee a “free-choice voucher” equal to the amount the employer would have paid under the employer’s plan.
Tax on high-value health plans
Beginning in 2018, “Cadillac” or high-value health plans will be subject to a 40 percent excise tax on premium amounts exceeding $10,200 for single coverage and $27,500 for families.