The Affordable Care Act (the Healthcare Reform Law) imposes new requirements on health benefits offered by employers in the large group and self-insured markets. Beginning on January 1, 2014, companies must cover and pay for services in ten categories of “Essential Health Benefits” with no annual or lifetime dollar cap. The ACA does not define the specific services to be offered in each benefit category. Rather, it requires employers to define essential health benefits in the same way as “benchmark plans” selected by each state and approved by HHS. Most companies benchmark benefits against the plan in the state where their headquarters are located. However, some companies operating in more than one state may select a benchmark plan from any of the states.
Benchmark plans vary in benefit structure and cost from state to state. Choosing to benchmark employee benefits against a plan that is similar to the company’s existing offering can save the company the time and resources needed to change their current program or to develop an “Actuarially Equivalent” benefit in the same category. Conducting a benchmark analysis also helps the company document compliance with ACA requirements.
Arent Fox developed and validated a custom proprietary methodology to analyze benchmark plans from which companies that offer benefits in the large group and self-insured markets will have to choose.
Arent Fox can advise on whether your company’s employee health benefits comply with ACA requirements and help identify benchmark plans your company needs to consider.