The post below is a guest blog from Steve Byrd who serves as Principal, Health & Welfare Consultant for CAI’s employee benefits partner Hill, Chesson & Woody.
Many questions have arisen from the ever changing Affordable Care Act (ACA), specifically amongst the small group employers. Many feel as though they have been left out in the cold with more questions than answers when it comes to the changing regulations.
“Should I renew early and what happens if I do? How do I handle the new small group age rates? How do I communicate the new benefit changes concerning, smoker rates, out-of-pocket maximums, age-rated premium schedules, metallic levels, pharmacy MAC pricing changes, pediatric dental/ vision changes, and deductible limit requirements?”
With new regulations published every week and a variety of health-care related bills moving through Congress every day, it is difficult for a large company much less a small employer, to keep up with the changes.
One bill recently passed through Congress and signed by the President (Protecting Access to Medicare Act of 2014)) is worthy of special attention by small employers. This bill, known as the “doc fix” bill, includes a section that ends the limitations on deductibles for small group employer-sponsored health plans that was previously imposed by the Affordable Care Act.
Prior to passage of this bill, deductible levels of no more than $2,000 for individuals and $4,000 for families were required in the small group market. This deductible cap made it extremely difficult for small group carriers to offer a wide range of plan designs within their small group plan offerings.
Small group carriers struggled to design plans that met the deductible requirements while also meeting the required Actuarial Value (AV) bands. The ACA requires small group carriers to offer plans at four specific AV levels (called Metallic Levels): Platinum (90%), Gold (80%), Silver (70%), and Bronze (60%). Deviations of no more than 2% are allowed. To operate within these Metallic Levels, many small group carriers made changes that resulted in higher per occurrence copays and increased costs for non-generic medications.
The passage of the Protecting Access to Medicare Act of 2014 allows carriers designing plans for the small group market to move beyond the $2,000/$4,000 deductible level and still meet the required Metallic Levels. It also allows small employers to remain creative in their plan designs, especially those that have focused benefits strategies around Consumer Driven Health Plans. To find out more about this recent change to the ACA, continue on to Robb Mandelbaum’s coverage on the “doc fix” bill.