Illinois Health Care Marketplace: Employer Compliance
The Affordable Care Act (ACA) is well on its way into action, and trailing with it there seems to be a substantial amount of misinformation out there. As a small business owner, you are likely to have a whole lot of questions: Am I required to provide insurance for my employees? Do I have to play a tax for not offering insurance in 2014? Will this eliminate my small group health insurance?
At R.C. Keller & Company, we want to help you better understand your responsibilities as they apply to the ACA and the deadlines by which you need to comply.
Illinois Health Insurance Marketplace
As of October 1, 2013, Illinois, in partnership with the federal government, began running its Health Insurance Marketplace. The Exchange as it is also known is set to provide all individuals with affordable health care coverage that can be purchased in person, by phone or online. The program is geared towards people who are currently without insurance or are not insured by their employer; people with pre-existing conditions; and small businesses.
Illinois Plans Offered
Each state may offer four different levels of plans: bronze, silver, gold, and platinum.
The cost of services will vary by plan.
- Bronze – You pay 40%, plan pays 60%
- Silver – You pay 30%, plan pays 70%
- Gold – You pay 20%, plan pays 80%
- Platinum – You pay 10%, plan pays 90%
Regardless of the level of plan you purchase, each will be required to offer 10 essential health benefits. Illinois’ Benchmark Plan will include the following:
- Outpatient services
- Emergency services
- Hospital stays to include weight loss surgery
- Pregnancy, baby care, and fertility treatments
- Mental health and substance abuse services
- Prescription drug coverage
- Rehabilitative services, both for accident recovery and those with developmental issues
- Lab services
- Wellness and preventative care
- Services for children to include dental and eye care
In order to meet the minimum requirements of the ACA and avoid a financial penalty you must purchase a plan at the bronze-level or higher; a catastrophic plan fails to meet this requirement.
Help with Health Insurance: The Premium Tax Credit
Taxpayers who purchase their health care coverage through the Illinois Marketplace may be eligible for a premium tax credit to help offset the cost of coverage. To be eligible for the credit you must:
- Meet specific income criteria (household income 100% – 400% of the federal poverty level)
- Buy a plan through the exchange without any sort of employer contribution
- Not be able to secure minimum essential coverage except by purchasing an individual plan through the Marketplace, or if the employer-sponsored plan is unaffordable or does not meet minimum value requirements
Employer-sponsored plans are considered unaffordable if they require the employee to contribute more than 9.5% of the household income toward the premium for self-only coverage.
For those who choose not to purchase health insurance or fail to meet the requirements of minimum coverage, a penalty fee will be assessed to your federal income tax return to be filed for that year. The initial penalty is $95 for the 2014 tax year and is set to increase $300 annually.
Employer Obligations: 50 or More Employees
If you own a business with 50 or more employees there are several requirements you, as an employer will be required to meet in the years 2013 and 2014.
Notice to Employees of new Health Insurance Marketplace
In accordance with the ACA, all employers must have provided notification to their employees about the new Illinois Health Insurance Marketplace by October 1, 2013. Information about their eligibility for the premium tax credit should also be included, as should the warning that those with an employer contribution to their current health plan may be in jeopardy.
All new hires must be provided with the same information following the October 1st deadline.
If you have any questions about what information needs to be included, contact R.C. Keller & Company or visit the Department of Labor’s website for samples.
Employer Shared Responsibility Provision
In attempt to offset costs of the Marketplace premium tax credit, beginning 2015, those of you choosing not offer affordable health insurance to your full time (FT) employees you will have to pay an assessment if at least one of your FT employees is certified to receive a premium tax credit in the individual Health Insurance Marketplace.
Starting in 2015, the IRS must be provided with information regarding FT employees’ health care coverage and the cost of benefits provided. Self-insured plans are also subject to this rule. Further information will be made available soon.
Summary of Benefits and Coverage (SBC) Disclosure Rule
Employers must provide SBC to all employees. A penalty will be imposed for those who do not comply.
In addition, there will be a new 90-day maximum waiting period for employees who are eligible for employer-provided health care. This begins on January 1, 2014.