When open enrollment to purchase health insurance begins Tuesday, hundreds of thousands of uninsured or under-insured Wisconsin residents will begin the search for insurance coverage.
Employees who are offered and receive health insurance through their employers will arguably be the least impacted consumer group.
“Employers can choose to opt in early if they find a better deal, but the big changes starting tomorrow will largely be with the individual market,” said J.P. Wieske, a spokesman for the state’s Office of the Commissioner of Insurance.
Yet despite negotiations at the federal level that led to a one-year implementation delay for large businesses, there are still portions of the Affordable Care Act that impact how companies will administer health insurance benefits.
For starters, if you work for a small business, defined as having between 2 and 50 employees, you do not have to be offered health insurance through your employee. That wouldn't change.
Conversely, small employers will never be penalized — unlike large employers — for not offering health insurance. That said, if a small employer does offer insurance, the plans offered must meet certain criteria or the company will not be allowed to offer them to employees.
For example, the plans offered by a small business to its employees must not require the employees to pay more than $2,000 for an individual plan or $4,000 for a family plan on deductibles.
If they do, the small business must contribute money to the employee’s health savings account. Small businesses with under 25 employees and average employee incomes of $50,000 or less also are eligible for tax credits to help them offset the cost of providing insurance.
“It’s their option whether or not they provide coverage,” Wieske said. “How the exchange impacts small employers will be something we see over the next year. Although there are no penalties (for not providing insurance), if they chose to offer insurance they will have to contribute toward savings plans or lower the (offered) deductible.”
Those working for large companies with more than 50 employees will be subject to a different set of guidelines, as will the employer.
For starters, large employers who offer insurance must offer “affordable” insurance. The Affordable Care Act defines “affordable” as an employee with an individual plan not paying more than $6,350 on out-of-pocket expenses and an employee with a family plan not paying more than $12,700.
Out-of-pocket expenses include the cost of deductibles, co-payments and co-insurance payments.
Wieske said for the first year of coverage, drug costs may not be included in these totals. These limits will go into effect the next time policies renew.
Employees of large and small companies will be eligible for bronze, silver, gold and platinum plans. The bronze plan requires employers to cover 60 percent of claims submitted by the employee, silver 70, gold 80 and platinum 90.
The platinum plan will cost more, as the highest percentage of claims are paid.
Insurance offered by large employers will not be deemed “affordable” if the employer fails to offer a plan that covers at least 60 percent of the cost of claims.
Insurance also is not classified as “affordable” if the cost of the insurance plan is more than 9.5 percent of the employee’s income. This percentage is just based on the cost of the plan and does not include the cost of deductibles.
For example, if you earn $100 a year and your employee share for insurance is $10, you would be eligible for a subsidy if you chose to get your health insurance on the exchange.
As of Tuesday, if either of these criteria — covers at least 60 percent of claims, costs 9.5 percent of salary or less — is not met, an employee can receive a subsidy and shop for insurance on the exchange. Large employers simply won’t be penalized for not offering affordable insurance until 2015.
“If you’re not happy with the (affordable) plans offered by your employer, you can go on the exchange,” Wieske said. “You just won’t get a subsidy.”
To help people navigate through the website, the state has been training counselors, known as navigators, and certified application counselors. 500 navigators, each of whom received 16 hours of training, will be positioned across the state to assist residents.
To find out where to find them go to www.E4healthwi.org.
As of Tuesday, the exchange, or online insurance marketplace, will be accessible at www.healthcare.gov or by calling 800-318-2596.