Are you still unsure of how the Affordable Care Act will affect your small business?

Many employers are wondering how the Affordable Care Act will affect the coverage they provide to their employees. Below is a recap of just some of the health plan changes that small groups can expect effective January 1, 2014:

Community Rating

Small groups will be subject to Community Rating. Health conditions will no longer have any bearing on their group rates. Risk Adjustment Factors (RAFs) will be eliminated. In California, Community Rating will be based solely on:

1. Age (3:1 ratio, rates from younger to older will have 3:1 ratio)
2. Employee Zip Code
3. Family Status (i.e. number of dependents)

Essential Health Benefits – CA

Carriers will revise their small group plan portfolios to comply with the “Essential Health Benefits” requirement. EHB will include coverage for the following categories:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Laboratory services
• Maternity & newborn care
• Mental health and substance abuse services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services & devices
• Preventive and wellness services and chronic disease management

Metallic Level Plans

Carriers will offer four different metallic level plans as follows:

• Bronze: 60% Actuarial Value
• Silver: 70% Actuarial Value
• Gold: 80% Actuarial Value
• Platinum: 90% Actuarial Value

Maximum Deductible of $2000

Maximum deductible for small group plans will be limited to $2000 per individual and $4000 for family.

Maximum Out of Pocket Limits - $6,350/$12,700

Annual limitation on out-of-pocket maximums will be the same as those that apply in 2014 to high-deductible health plans (HDHPs) combined with Health Savings Accounts (HSAs). These maximums are $6,350 for an individual and $12,700 for a family. For 2015 and beyond, the out-of-pocket maximum will be adjusted based on increases in the average per capita premium for health insurance coverage, and will no longer be linked to the out-of-pocket maximums for HDHP/HSAs.

60 Day Waiting period: Assembly Bill 1083

Unlike the Federal PPACA with 90 days, AB 1083, applicable to small group California employers, provides that the waiting period for new hires cannot be more than 60 days. More guidance is expected from carriers on this rule and whether it will go into effect at the group’s renewal or effective January 2014. All new business written after January 1, 2014, will be subject to a maximum of 60 day waiting period.