Frequently Asked Questions
about Health Care Reform
The answers below are meant to serve as guidelines. Please consult with your legal advisor or benefits manager to determine how the health care reform law will specifically affect your business.
Q: Which employers are required to offer coverage?
A: Small employers are exempt from the mandate to provide affordable coverage to employees, while applicable large employers are required to provide affordable coverage to their full-time employees.
Q: Am I a small employer or an applicable large employer?
A: Small employers are those with fewer than 50 full-time equivalent employees (FTEs).
Large employers are those with 50 or more FTEs.
Q: How is a full-time-equivalent (FTE) employee determined?
A: Total number of hours worked by your part-time employees in a month
Divide by 120
Add to number of full-time employees
Q: How is a full-time employee defined?
A: A full-time employee works at least 30 hours per week, averaged over the course of a month.
Q: Will I purchase coverage in the small group market or the large group market?
A: Generally, for the 2014 & 2015 plan years, if you have fewer than 50 employees (using the definition for full-time equivalents) you will be purchasing coverage in the small group market.
Q: What are the different coverage requirements?
A: If your organization is required to offer insurance, your coverage must:
- Be affordable and provide minimum value
- Offer minimum value coverage
Q: How does the law define "affordable" coverage that provides "minimum value"?
A: Employer sponsored coverage is considered affordable if the employee's share of the premium for an individual policy does not exceed 9.5% of his or her income.
A plan meets the minimum value requirement if it has an actuarial value of at least 60%, meaning that the health plan, on average, pays for 60% of the costs of services covered in the plan. The employee pays, on average, the remaining 40%.
Q: How do I know if my plan meets the 60% actuarial value requirement?
A: BCBSND will work with our employer groups to ensure that plans meet the minimum value requirement.
Q: What deductible levels are acceptable?
A: Your plan cannot impose cost sharing that exceeds the high-deductible health plan limits (currently $6,450 for an individual, $12,900 for a family). These amounts are indexed to medical inflation each year.
Q: What is the "essential health benefits package"?
A: The essential health benefits package refers to criteria for a non-grandfathered plan. Meeting cost sharing limitations and satisfying the new preventive services requirements are other criteria.
Q: What are the "essential health benefits" that my plan must include?
A: Generally, the essential health benefits include items and services contained within ten broad categories:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
Q: Who must offer the "essential health benefits package"?
A: Coverage in non-grandfathered small group and individual markets must include the essential health benefits package.
Plans that are grandfathered, or in the large group market, do not have to cover the essential health benefits package. However, if anon-grandfathered plan covers any essential benefit there cannot be an annual or lifetime limit on that benefit.
Q: What happens if I fail to meet the reform law requirements?
A: Failing to offer the mandated coverage to full-time employees does not necessarily mean an employer will have to pay a penalty. Whether you will be penalized and at what cost will depend on:
- Whether you are an applicable large employer
- Whether you offer minimum essential coverage to all full-time employees
- How many full-time employees receive subsidies to purchase coverage in the Health Insurance Marketplace
Q: Which individuals are eligible for a premium subsidy in the form of a tax credit?
A: In order to be eligible for a premium subsidy in the form of a tax credit, an individual must have a household income between 100% and 400% of federal poverty level (FPL), depending on family status. The individual must also not have other affordable coverage available (such as employer-sponsored or government-sponsored coverage.
Q: When do the employer mandate penalties go into effect?
A: January 1, 2015. However, transition relief is available for certain employers with fewer than 100 FTE employees.