ACA requirements for insurers - ANSWER(a) Insurers may no longer exclude members based on preexisting conditions.
(b) Insurers may not place annual or lifetime caps on coverage.
(c) All fully insured products must comply with a medical loss ratio (MLR)
requirement. It mandates that health insura...
ACA requirements for insurers - ANSWER(a) Insurers may no longer exclude members based on
preexisting conditions.
(b) Insurers may not place annual or lifetime caps on coverage.
(c) All fully insured products must comply with a medical loss ratio (MLR)
requirement. It mandates that health insurance issuers in the individual and
small group markets and in the large group market spend at least 80% and 85%
of premiums, respectively, on health care activities (as opposed to administrative
functions).
(d) Coverage must be available to dependents until the age of 26.
(e) Benefits that discriminate in favor of highly compensated employees are
prohibited.
ACA requirements for self-funded plans - ANSWERACA treats self-funded health care plans just as it
does fully insured plans in many
respects. The bans on preexisting condition denials as well as annual and lifetime
caps apply to self-funded plans and fully insured plans. Both types of plans must
comply with nondiscrimination policies for highly compensated employees and offer
coverage extensions to dependents under the age of 26. All these requirements apply
regardless of employer size.
Affordable Care Act (ACA) requirements for employers - ANSWERACA requires companies with 50 or
more FTEs to offer health care policies that
meet specific criteria—or pay penalties. Although ACA does not impose this
requirement on firms below 50 FTEs, it does establish minimum conditions for
policies sold by health insurers to the firms under 50 FTEs. Also, employers under
50 FTEs are not required to contribute toward employee health care insurance costs.
, Attachment point - ANSWERSpecific stop-loss coverage limits the dollar amount on each employee's
health care
costs. Aggregate stop-loss coverage limits the dollar amount on the health care costs
of an entire employee population over a period of time.
As in traditional health insurance, employers are responsible for costs until a
deductible amount is met—beyond that point, they have no payment responsibility.
This point is known as the attachment point. Thus, the attachment point is the
deductible amount, and lower attachment points reduce the employer's financial
risk.
Benefits of self-funding - ANSWERThe three main advantages of self-funding for a small employer are
cost, flexibility
and freedom from potentially adverse effects of regulation. The first two existed
before ACA, whereas the final advantage resulted inadvertently from ACA and its
effects on the small group market.
A self-funded plan can offer financial advantages to an adopting employer. Total
costs are lower relative to fully insured product options in large part because
traditional insurance premiums include carrier marketing costs and profit margins—
factors that are not applicable to self-funded plans. In all, self-funded plans can save
10-25% in nonclaims costs relative to fully insured plans.
Self-funded plans allow greater flexibility in benefit package design and
reimbursement contracting with providers. A small employer can personalize a
benefits package to reflect the needs of its workers. For example, if an employer had
a workforce comprising a large number of smokers, it could include a rigorous
smoking cessation program in its benefit package that would otherwise not be
included in a fully insured health plan. Self-insured employers also have the freedom
to strike unique payment arrangements with providers that align incentives and
control costs
Perhaps most importantly, self-funding enables businesses to escape elements of
ACA that may adversely impact some small groups. In particular, small employer
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