The Patient Protection and Affordable Care Act (now referred to as the “ACA” by federal regulators (“ACA”)), as amended, contains significant new requirements for employers and their health plans. This summary describes the main provisions of ACA but not every provision.
This summary is divided into five sections:
- Plan Changes – Describes what health benefits a plan must cover (e.g., preventive care without cost-sharing) and restrictions a plan must eliminate (e.g., lifetime limits). Also includes new enrollment rules (e.g., covering older children).
- Employer and Insurer Administrative Requirements – Describes the administrative actions employers must take (e.g., reporting the value of health plan coverage on Form W-2).
- Tax Incentives / Penalties for Employers, TPAs and Insurers – An overview of tax benefits offered by ACA (such as the early retiree reinsurance program), tax increases (e.g., additional FICA tax of 0.9%) and tax penalties that can apply (e.g., the $2,000 and $3,000 penalties that can apply under the “pay or play” rules) to employers, third-party administrators (“TPAs”) and insurers.
- Exchanges and Co-Ops – The new rules for health plan “exchanges” are described.
- Requirements, Taxes and Benefits for Individuals – An overview of the requirements individuals must follow (such as obtaining “minimum essential coverage” as of 2014), along with related tax credits and penalties.
Grandfathered Plan Exceptions. Some ACA changes do not apply to a “grandfathered” health plan (a “GF” health plan). Where applicable, this is noted in the “Comments” heading.
Notices and Plan Amendments: We state in the “Comments” section whether ACA requires a specific notice relating to the change. In addition, many plan changes will require an amendment and a related summary of material modifications (“SMM”).
Which Plans are Affected? ACA’s changes generally apply to “group health plans.” However, ACA does not apply to every group health plan. In general, ACA applies to (click here to view table).
Which Plans are Not Affected?
Click here to view tables.