Know your plan design

In our previous post, we spoke about the eligibility of employees for the Affordable Care Act and how keeping track can make or break a company’s wallet when the penalties start stacking. This is the second half of the information you need to know discussing plan designs and what they need to look like to keep your company compliant.

The other portion of the 2016 Employer Mandate implementation is plan designs.  About two years ago the market saw the introduction of MEC plans.  These slimmed down or “Skinny” plans met the part A portion of the ACA by offering 63 different mandated physical procedures and nothing else.  Then around this time last year, the market saw another plan referred to as MVP (Minimum Value Plan) plan.  The affordable part of the employer mandate said that plans must meet 60% of covered expenses on top of the MEC requirements meet part B of the Employer Mandate.  One company was able to manipulate their plan to meet the 60% on the ACA calculator and not offer hospitalization or surgery charges.  November of 2014 HHS and IRS issued joint notification that these plans would not be valid moving forward, but those already in place were grandfathered for 2015.  They would have to be changed for 2016 unless another amendment granting additional time is released.

Moving into 2016, companies with 50 FTE must offer a compliant plan(s), must offer to 95% of eligible employees, and make it affordable.  These new compliant plans that meet Minimum Value can exceed that 60% value, but they have to be made affordable. 

The employee responsibility under the ACA equation is 9.56% of monthly income.  The issue then becomes the higher the benefit level, higher the premium, the more it costs the employer for that employee.  If an employer’s lowest compliant plan cost $350 or $500 a month, it does not matter to the employee because he is capped at 9.56% of income.  Companies now subject to the Employer Mandate in an industry that is highly competitive for employee cost need as low of a monthly premium as possible.

To meet Minimum Value, a plan really has to offer the MEC coverage and be a high deductible plan covering doctor visits, hospital, surgery and prescription drugs under the deductible and out of pocket.  Really, the plan does not have to offer any copays for doctor visits or prescription drugs. 

However, like the 2015 MVP offering, many employees are going to question the value of a plan that they have to pay around $100 a month for and nothing is covered until a $6350 deductible is met.  Unfortunately, adding copays to doctor visits, ER visits and drug stores is an added cost to the employer.

We are working with several different companies in offering benefit programs that meet part A & B of the Employer Mandate with a stronger cost effective MEC plan to meet part A and the individual mandate at little cost to the employer.  Our Minimum Value offering will include a high deductible type plan and a copay type high deductible plan.  We are offering these plans with rates based upon demographics or “easy” underwriting.  We are also able to augment your offering with buy up options that might require additional underwriting.  While the final rates are based upon the final enrollments we are able to get quotes for you now based upon your current eligible population.

We are now at T-4 months to implementation.

I am available for consultation on plan offerings and developing a strategy for your company’s situation.   We have multiple carriers and networks of providers available as well as enrollment demarcations.   Please give us a call or email at 770.338.0188 or [email protected]