Beginning in 2014, the Affordable Care Act (ACA), will require most Americans to have health insurance coverage or pay a tax (otherwise known as the individual shared responsibility). This means many new individuals will enter the health insurance market with many questions, including how to purchase coverage.
New in 2014: Public health insurance exchanges
Health insurance may be purchased directly from a health insurance carrier, through a broker, through employer-sponsored group coverage or through a private exchange. Beginning in 2014, individuals and small group employers will have another option to purchase health insurance with the addition of newly created public health insurance exchanges. The public health insurance exchanges are known by many names, including the Health Insurance Exchange, Public Exchange, American Health Benefits Exchange (for individuals), Small Business Health Options Program or "SHOP" (for small group employers), or simply the Exchange or Marketplace.
What is a public health insurance exchange?
Think of a public health insurance exchange as an online marketplace where consumers may compare and purchase a variety of health insurance products, similar to online travel sites where an individual may book a flight or hotel room.
Is every state required to establish a public health insurance exchange?
Under the ACA, each state is required to have a public health insurance exchange. There are three proposed models of how exchanges can be set up and operated: a state-based exchange, a partnership between the state and federal government, and a federally facilitated exchange. All public exchanges must be ready to begin enrolling individuals and small employers on October 1, 2013 for an effective date of January 1, 2014.
Both Iowa and South Dakota have announced they will pursue a state-federal partnership, meaning they will share operational functions with the federal government.
What do employers need to do?
The ACA will require employers to provide all current employees and new hires written notice:
- About the existence of the exchange, including a description of the services it provides and how employees can contact the exchange for assistance;
- That if the employer plan does not cover at least 60% of covered benefits, the employee may be eligible for a premium tax credit or cost-sharing subsidy if he or she purchases coverage through the exchange; and
- That if the employee purchases coverage through the exchange, he or she may lose the employer's contribution to the employer-sponsored plan and associated tax benefits.
Timing for distribution of notices has been delayed from March 1, 2013. The Department of Labor (DOL) stated that it would issue further guidance which will include a new compliance date. However, the DOL indicated that a likely new compliance date will fall sometime during the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.
DOL is considering providing model, generic language that could be used to satisfy the notice requirement. Wellmark will provide more information as it becomes available.
Where can I get more information?
Wellmark is here to inform, lead, assist and support you through all the ACA changes. For more information call your Wellmark representative.