For large group employers
The Affordable Care Act, also known as the ACA, specifies requirements and guidelines in a number of different areas that are relevant and applicable to "large employers, defined as employers with an average of 50 or more full-time employees. Below is a summary of the relevant provisions for large employers.
Providence Health Plan offers this information on some of the laws applicable to healthcare reform so that employers can understand the general legal landscape and seek their own counsel. Where possible, we provide tips for how to find additional information from regulators. This guide is offered for general educational purposes only and should not be taken as legal advice. Employers should consult with their benefit advisors about the specific legal considerations of their benefit programs.
Grandfathered Plans - A grandfathered plan is one that maintains the benefits that were available to enrollees as part of the plan as of March 23, 2010. The ACA grants grandfathered plans exceptions to adopting some reform mandates, and these exceptions are identified below. Unless otherwise specified, all requirements below also pertain to grandfathered plans.
New/updated benefits requirements
Health plans offering dependent coverage must allow adult children to remain on their parents' health plan until age 26. This provision is already in effect. The mandate does not extend to other children an employer may cover, such as an employee's grandchild. Adult children do not need to live at home, nor are they required to be in school, in order to be covered. Disabled children who meet the requirements for enrollment, however, do not become ineligible at age 26. For grandfathered plans, in 2014 this requirement is extended to adult children who are covered under other employer coverage.
Health plans must cover specified preventive services - including routine immunizations, screenings for conditions such as cancer and high cholesterol, and preventive services for women - without any cost-sharing requirements. The complete list of covered preventive services is here. This requirement is already in effect, but does not apply to grandfathered plans.
For more information on how preventive care will be covered for Providence Health Plan groups, see our detailed list of coverage guidelines.
Lifetime Dollar Limits
Health plans cannot set lifetime dollar limits for spending on the "essential health benefits," they provide. This is currently in effect.
Under the ACA, only health plans offered through the individual and small group markets are required to offer all items and services that qualify as essential health benefits. For large employers, however, any such items that are provided as part of coverage may not have lifetime dollar limits.
In 2014, cost-sharing maximums for non-grandfathered plans will be limited to the maximum allowed by Internal Revenue Service regulations for high-deductible health plans, which for 2014 is $6,350 for individuals and $12,700 for families (i.e., other than self-only). For 2015 and beyond, this amount will be adjusted based on average premium growth.
The cost-sharing maximum is the total of all member out-of-pocket expenses: copays, coinsurance and deductibles. It does not include premiums.
FSA Contribution Limit
Currently, there is a $2,500 limit on salary reduction contributions to a health flexible spending account, or FSA. The ACA limit is on FSA salary reduction contributions and not on other employer contributions. The limit does not apply to contributions to a health savings account, or HSA, or to amounts made available by an employer under a health reimbursement arrangement, or HRA.
Beginning in 2014, health plans must cover services legally provided by a class of licensed health care practitioners (e.g., chiropractors, acupuncturists or clinical social workers) acting within the scope of their state licenses, if it covers those same services when provided by a different class of practitioners (e.g., medical or osteopathic physicians).
Already in place for non-grandfathered plans, emergency services must be covered without prior authorization and utilize the same copay or coinsurance for in-network and out-of-network services.
Applicants cannot be disqualified from health plan coverage - whether for a new plan or a plan renewal - based upon their health status, including any pre-existing conditions. This only applies to non-grandfathered plans.
Beginning in 2010, this requirement was previously in place for children younger than 19, but as of Jan. 1, 2014, will apply to members of all ages.
Medical Loss Ratio
If insurers fall below a specific medical loss ratio limit - 85 percent for large groups - they are required by law to refund policy holders.
The ACA medical loss ratio is unique and is defined as the sum of incurred claims plus expenses to improve health care quality divided by earned premiums minus federal and state taxes and licensing fees. The calculation is done yearly, beginning Jan. 1 through Dec. 31.
In 2011, 2012 and 2013, Providence Health Plan met the medical loss ratio requirements established by the ACA. This means that we demonstrated fiscal responsibility and are not required to issue member rebates.
The ACA specifies that health coverage may not be terminated ("rescinded") except in cases of fraud or intentional misrepresentation. Many states, including Oregon, have had similar regulations in place for years.
Starting in 2014, insurers will be prohibited from terminating coverage because an individual chooses to participate in a clinical trial that treats cancer or other life-threatening diseases. Plans also must cover routine patient costs or services for participation in these clinical trials.