7 important facts about Health Care Reform

Did you know?

1. Employers must notify all employees that the new Health Care Exchanges are opening Oct. 1, 2013.

If you are an employer, it is required that you give each of your employees a notice that the new Health Care Exchange will be opening October 1, 2013. The Department of Labor has prepared a model notice for employers to deliver to each employee.

2. In 2014 health insurance benefits will be standardized.

If your policy is considered a non-grandfathered plan, your benefits will likely be changed to one of the standard product offerings at your renewal in 2014. This may cause your rates to be increased if the plan you are converted to is considered an upgraded benefit to your current plan. All new insurance policies must have the essential health benefits included and there will be four levels of benefits. The actuarial values of the plans are, 90 percent platinum, 80 percent gold, 70 percent silver and 60 percent bronze.

3. Insurance companies will be required to meet specific standards when rating a policy.

Rates can only be influenced by three factors -- age, region of state and tobacco use. Rates are restricted to a 3:1 ratio between low and high price. There will not be separate rates for males and females. Ultimately this means your rates may go up drastically for some or a slight decrease in other cases. You should be aware of how the new rating methodology will influence your specific situation so you can prepare for upcoming available options.

4. The individual mandate to have health insurance in 2014 requires all U.S. citizens and all documented individuals living in our country to have health insurance for themselves and their families.

There are a few exceptions, but those exceptions will exclude less than 2 percent of the country’s population. If you don’t have health insurance, you will be subject to a financial penalty. There are subsidies available for individuals and families below 400 percent of the federal poverty level.

5. The Summary of Benefit and Coverage “SBC” is required to be delivered to all employees at renewal, upon hire, or when there is any benefit change.

The health care reform legislation standardized benefit summaries for all insurance companies to use describing the policy purchased. The intent is to make comparing policies between different companies easier.

6. Tax credits are available for companies who meet certain requirements.

If your company has less than 25 employees and the company pays at least 50 percent of the employee’s premium and your employees earn less than $50,000 annually, your company may qualify for a 35 percent tax credit in 2013. The credit is increasing to 50 percent in 2014. After 2013, it will be necessary for your company to enroll through the SHOP Exchange to receive any tax credit. Details about the SHOP Exchange can be received by contacting one of our agents.

7. Employers may want to consider requesting a 2013 early renewal.

Many insurance companies are offering groups the option of renewal their policies in December 2013. This allows employers to retain their current benefits and rating method until December 2014. All of the health care reform changes will be effective for your employer sponsored health insurance plan upon your renewal in 2014. By renewing in December 2013, you can delay many of the reform changes until December 2014.

These are some of the important facts that you should be aware of right now. The deadlines for some of these requirements are approaching. Health care reform will have many other affects on your individual policy and/or your group employer sponsored plan.

Consult a health insurance agency for what is best for you and your individual or companies health insurance benefits.