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Patient Protection and Affordable Care Act.

On March 23, 2010, President Obama signed comprehensive health reform, the Patient Protection and Affordable Care Act, into law.

Find out how the health care reform will affect your business.

Covered California

Covered California, the state run program responsible for overseeing the implementation of the Affordable Care Act, just released the standards for benefit plans that will be made available to Californians. The benefits within these plans will be the same from one carrier to another and consumers cannot be denied coverage due to pre-existing conditions.

There are four plan levels, Bronze, Silver, Gold and Platinum. Tax subsidies and credits will be based on the percentage of federal poverty level for the individual enrolling. The less income earned the greater the financial assistance provided.

Covered California’s website is www.CoveredCA.com. There will be up to date information, resources, tools to help you estimate your cost, and will provide information on insurance carriers that will be allowed to participate in Covered California when the open enrollment begins in late fall of 2013 for effective date January 1, 2014.

Please download the file for further information or visit CoveredCA.


  • On May 23rd, Covered California announced the name of the 3 health insurance plans that will offer individual coverage in 2014 through the Exchange. The plans reflect a mix of large non-profit and commercial plans.
  • The California Health Benefit Exchange, Covered California, announced on August 1, 2013, the planned participants for the new Small Group Health Options Program (SHOP) marketplace. Download press release.

Take a moment to familiarize yourself with our links to Health Plans & Rates for 2014 and look over Healthcare Reform Frequently Asked Questions.

Beginning January 1, 2014, employers will be subject to a number of provisions that affect the health benefits they provide to full-time employees. Employers with over 50 employees may pay penalties for employees who receive tax credits for health insurance through The Exchange.

In 2014, small businesses (with less than 100 employees) and individuals will have access to purchase private health insurance coverage through the Exchange.

The Exchange is a marketplace which will provide one stop shopping for health insurance with detailed information about benefit coverage and costs.  Each state will create its own Exchange called the Small Business Health Options Program (SHOP).  SHOP Exchanges will be administered through a governmental agency.

The act requires employers to issue a notice to employees containing information about SHOP Exchanges, the availability of premium assistance (if the actuarial value of the employer’s plan is below 60 percent), and the availability of free choice vouchers in the upcoming plan year (2014). The Department of Labor expects that the timing for the distribution of notices will be late summer or fall of 2013.

Individuals and Families with income between 133-400% of the federal poverty level can purchase coverage with premium and cost-sharing credits.

The SHOP Exchange Plan coverage designs will be determined by the level of coverage you choose.  There will be four levels of coverage: Platinum, Gold, Silver and Bronze. All California carriers must offer all levels of coverage.  There are numerous other rules governing exchange plans, such as insurance premium rating rules and the actuarial value of benefits that can be sold in the Exchange.

Private health insurance sold in the exchange must contain “Essential Benefits.”

“Essential Benefits” are defined as coverage for the following:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • 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
  • Preventative and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

In addition to the “Essential Benefits” described above, there are other required changes that must be made to the coverage such as:

    • An employer may not impose a waiting period longer than 90 days on the employee before they are eligible for group health insurance
    • Costs for routine patient costs for items and services furnished in connection with participation in certain clinical trials for life-threatening diseases, such as cancer, will be required coverage through health plans
    • The act extends the Paul Wellstone & Pete Dominici Mental Parity and Addiction Equity Act to cover groups of all sizes. Insurance companies cannot limit the number of outpatient visits or hospital stays, or impose a higher deductible or co-pays for psychological services

New employer penalties

Under the act, certain penalties will be imposed on employers with 50 or more full-time employees, if any of the following applies:

  • The employer provides either no health coverage to full-time employees, or provides coverage to full-time employees that is not affordable.
  • The employer does not provide any “minimum essential coverage” for its full-time employees
  • In the situation where one or more full-time employees enrolls for coverage in the Exchange and qualifies for a premium tax credit or cost-sharing reduction, the employer penalty imposed is $2,000 for each of its full-time employees; however, no penalty is assessed on the first 30 full-time employees. Penalties are assessed monthly.
  • Even if the employer offers insurance, if the employee enrolls in coverage through the Exchange and qualifies for a premium tax credit or cost sharing reduction (because the employee’s share of premium within the employer sponsored program is greater than 9.5% of the employee’s income, or the employer’s plan has an actuarial value of less than 60 percent), the employer may be penalized.

Employers with 50 or more employees will be required to calculate how many full-time (or full-time equivalent, working 30+ hours per week) employees they employ in order to determine whether or not it must comply with the act’s 2014 provisions; seasonal employees may be included for this purpose.


New Employer Administrative Reporting

Finally, the act may require employers to annually report to the IRS a number of pieces of data, including

the following:

  • Whether the employer offers minimum essential coverage to full-time employees;
  • Any waiting period for health coverage;
  • The monthly premium for the lowest cost option in each enrollment category under the plan;
  • The employer’s share of the total allowed cost of benefits provided under the plan;
  • The number of full-time employees during each month; the name, address and taxpayer identification number (or Social Security number) of each full time employee, and the months each employee was covered under the employer’s plan.  HHS may require other information, which may be further refined in later regulations

“Free Choice Vouchers Through the Exchange”
If an employee has an income below 400 percent of the federal poverty level, and the contribution to the group health coverage is between 8 percent and 9.8 percent of the employee’s family income, and the employee does not participate in the employer’s health plan, he or she may qualify for a “free choice voucher.”  The employer must pay to the exchange the value of what the employer would have paid towards the employee’s cost of health coverage under the plan


Requirements for Businesses.


MMC Affordable Healthcare Act 2014

Penalties for Non-Compliance.


Affordable care act 2014 - MMChr

Navigate the Health Care Reform.

Need additional information? Download our business owner’s guide to dealing with the Affordable Health Care Act.

Download The Guide →



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