Large group reform FAQ

The Affordable Care Act, or ACA, contains a myriad of new requirements and provisions for large employers, likely changing the way you provide benefits to your employees. You're going to have questions. Following are answers to commonly asked questions about health care reform for large groups.

We're here for you. If you have questions not answered below, contact your Providence Health Plan account manager.

Q. What is Employer Shared Responsibility and when does it go into effect? 

A. Employer Shared Responsibility is the part of the health reform law that imposes a penalty on large employers that do not offer coverage to full time employees (and their dependent children), or that offer coverage to full time employees that is considered unaffordable or does not provide minimum value. For this purpose, “full time” is defined as 30 or more hours per week or 130 hours of service per month. Employer Shared Responsibility is commonly called the “employer mandate” or the “pay or play” requirement.

Employer Shared Responsibility was originally scheduled to take effect on Jan. 1, 2014, but the Obama administration announced two delays. The first delay was a blanket 1-year delay that postponed the requirement for all employers until January 1, 2015. The second delay phases-in the requirement based on the size of the employer.

For 2015, shared responsibility applies to employers that employed an average of 100 or more full-time and full-time equivalent employees in 2014. These employers must offer health care coverage that meets the ACA’s standards for affordability and minimum value to at least 70 percent of their full time employees (and their dependent children) or pay an additional tax.

Employers with 50 to 99 full time equivalent employees are generally exempt from shared responsibility in 2015. However, this exemption is only available if the employer can certify that it maintained the size of its workforce and aggregate hours of service during 2014, and maintained any previously offered health coverage through 2015.

For 2016, shared responsibility expands to include all employers that employed an average of 50 or more full-time and full-time equivalent employees during 2015. These employers must offer affordable, minimum value coverage to at least 95 percent of their full time employees (and their dependent children) or pay an additional tax.

Q. If I make an off-cycle eligibility change to ensure compliance with the employer mandate, does the change require a premium re-rate?

A. Re-rates will be required only if the change in the resulting number of eligible employees is greater than ±25 percent.

Q. How do I reduce my eligibility waiting period to 90 days in order to comply with ACA eligibility requirements?

A. There are multiple ways that an employer can meet the 90-day waiting period requirement, such as setting the probationary period at exactly 90 days or establishing a "first of the month following 60 days" waiting period.

Please contact your account manager to discuss these options.

Q. What are the 2015 requirements for out-of-pocket maximums (OOPM)?

A. For 2015, the limits on out-of-pocket maximums for essential health benefits have been raised to $6,600 for employee-only coverage and $13,200 for family coverage. In addition, plans that use separate administrators for different categories of essential health benefits (for example, separate medical and prescription drug administrators) will no longer be allowed to apply the full OOPM to each class of benefits separately. These plans can continue to apply separate limits to each benefit category, but the total combined OOPM for all essential health benefits cannot exceed $6,600 for individuals and $13,200 for families.  

Q. Will Providence allow an employee to waive group coverage so she can get coverage on her own via the exchange?

A. Yes, however any such employees who waive coverage will not count against Providence plan participation requirements.

Q. If I offer coverage that meets the ACA requirements for minimum value and affordability but employees waive coverage and purchase coverage via an exchange, will I be penalized?

A. If an employer offers coverage that meets minimum value and affordability requirements, its employees are not eligible for subsidized coverage through the exchange, so there is no risk of penalty to the employer.

The requirement to the employer is not that they actually enroll employees but that they have made available a plan that meets minimum value and affordability requirements.

Q. With the availability of exchanges as an option for employees' dependents to get coverage on their own, will Providence Health Plan drop the dependent participation requirement?

A. We do not anticipate making any modifications to the dependent participation requirements at this time.

Q. Do I need to consider leased employees when determining our total number of full-time equivalent employees, which ultimately determines if we are subject to the employer pay-or-play mandate?

A. Leased employees are not considered in the full-time equivalent head count.

Q. Do the Employer Shared Responsibility provisions apply only to large employers that are for-profit businesses or to other large employers as well?

A. All employers that are applicable large employers are subject to the Employer Shared Responsibility provisions, including for-profit, non-profit and government entity employers.

Q. I'm an employer with more than 50 full-time employees. How can I determine if my current plan meets the minimum value requirements, the plan's actuarial value and if the plan includes all the essential health benefits described in the ACA?

A. Providence Health Plan uses the minimum value calculator issued by the U.S. Department of Health and Human Services to ensure that all of our standard plans, as well as clients’ customized benefit plans, meet the minimum value requirement.

Since you have more than 50 full-time employees you are considered a "large group" under the ACA. Large-group plans are not required to offer coverage at a metal tier (bronze, silver, gold or platinum). Therefore, Providence Health Plan does not anticipate determining whether large group plans meet a particular actuarial value level. Unlike small-group employers, large employers do not have to cover the 10 categories of essential health benefits (EHBs) described in the ACA.

Q. Can I use "wash billing" to accommodate a 90-day eligibility waiting period?

A. Yes. Wash billing specifies that if an employee enrolls between the first and fifteenth of the month, a premium is owed for that month; if they enroll after the fifteenth, no premium is due.