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Do you understand the Affordable Care Act?

Published on August 15th, 2013 by Triton Benefits & HR Solutions

The Affordable Care Act is an intricate and complex law that reshapes the health care industry to make medical treatments more affordable and accessible to all Americans. The federal regulation also mandates that employers with the equivalent of 50 or more full-time workers must offer group health insurance plans. 

To truly determine if you're compliant with the ACA, ask yourself, "Do I understand the following statements?"

Calculating full-time
Under the ACA, full time is defined as an average of 30 work hours per week. However, your total number of full-timers isn't defined by how many employees meet or exceed this threshold. For instance, the Society for Human Resource Management points out that if you have 100 people who work 15 hours per week, that's averaged out to 50 staff members at 30 hours per week. Essentially, the formula is to add the numbers of hours your contributors work and then divided the sum by 30. 

Do you understand how to count how many full-time equivalent employees are on your staff?

Incentivizing wellness programs
The ACA also includes provisions that will help employers ensure their workers stay healthy. The Department of Labor explains that the law increases "the maximum permissible reward" companies can give to employees for health-contingent wellness programs from 20 to 30 percent of the cost of medical coverage. This means that a business can give its workers incentives that are equal to 30 percent of their insurance costs for meeting certain health goals. Further, the reward can go as high as 50 percent for wellness programs that reduce tobacco use. 

Do you understand what incentives you can offer for wellness programs?

Requirement to report medical loss ratio
The Centers for Medicare and Medicaid Services explains that the law "requires health insurance issuers to submit data on the proportion of premium revenues spent on clinical services and quality improvement, also known as the Medical Loss Ratio." This provision applies to all insurance plans offered on or after March 31, 2010. Coverage in the small group market must have a medical loss ratio (the amount spent on health care) of 80 percent and plans in the large group market must have an 85 percent medical loss ratio. 

Do you understand medical loss ratio reporting?

The marketplace
The ACA mandates that employers with the equivalent of 50 or more full-time employees must provide written notice of health insurance marketplace options, which are by state governments and the federal government in some locations. Further, businesses must explain by October 1, 2013 that staff members can purchase insurance through the marketplace and qualify for tax incentives, but may lose employee benefits. 

Do you understand what you have to tell employees about the marketplace?

Coverage and cost
The federal law also states that a company's insurance must cover a minimum of 60 percent of health care costs, according to the Kaiser Family Foundation. Additionally, coverage cannot cost more than 9.5 percent of a family's total income. 

Do you understand how much coverage has to be offered and at what price?

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