One of the main provisions of the Affordable Care Act, the Health Insurance Marketplace (also known as Exchanges), is opening for business. Beginning October 1, individuals and small businesses (50 or less full time equivalent employees) can access the Exchange for their state to compare plans and purchase coverage that will take effect as early as January 1, 2014. The initial open enrollment period for coverage through the Marketplace will run until March 31, 2014, with a provision for qualified event special enrollments afterwards and subsequent annual open enrollment periods each year.
Individuals who purchase coverage through the Marketplace may be eligible for tax credits and/or subsidies depending on their income and family size if they do not have an offer of affordable coverage from their employer designed to cover at least 60% of of medical costs. Conversely, individuals choosing to forego coverage will incur a tax penalty of the greater of 1% of their income or $95 beginning in 2014, with penalties increasing through 2016.
Small businesses that purchase coverage for their employees through the Small Business Health Options Program (SHOP) may be eligible for tax credits of up to 50% of their premium costs if they have 25 or less full time equivalent employees earning an average of $50,000 or less per year. Keep in mind that the Affordable Care Act does not require employers to provide healthcare coverage to their employees either through an Exchange or the traditional marketplace, only that it meet specific coverage standards should they choose to do so. In addition, the "pay or play" penalties for large employers and the related reporting requirements have been delayed until 2015 which has given group sponsors more time to consider their options.
The Marketplace is meant to provide individuals and small businesses with alternatives for purchasing affordable healthcare coverage. As always, there will not be one best solution for everyone. More information on the Marketplace may be found at:
Marketplaces will have trained assisters, (aka navigators, counselors, depending on the state), available to help with the process of comparing and purchasing plans. If you'd like to discuss the best options for your business, please contact us here at i2i benefits.