Manufacturing Uncategorized

ACA Changes For New Jersey Companies

For small and medium-size companies in New Jersey, the Affordable Care Act (ACA) is a moving target. It was supposed to go into effect in 2014, and many companies prepared for this. However, the deadline changed and now these companies don’t have to become ACA compliant in 2014. In fact, they can wait until 2015/2016 to do so.

 The second deadline push-back was made in April of this year. So now medium-sized companies—those with 50 to 99 employees—don’t have to sign up for an ACA-compliant program until Oct. 1 of 2015. They become ACA compliant with their 2016 plans. Companies with fewer than 50 employees are still not required to provide health care coverage, while those with 100 or more employees must still meet the Employer Share Responsibility Mandate in 2015.

 Early renewal taken in 2013

Many medium-sized companies in New Jersey took early renewal in 2013 instead of becoming ACA-compliant immediately. They are the ones that will benefit the most from the latest push-back, since they now have a lot more time to make decisions about their new plans.

 Companies that already comply with ACA

On the other hand, a number of small-group businesses in New Jersey will not be affected by these deadline push-backs. Those are the companies that have already switched to new plans that conform to the ACA. These employers accepted new ACA-compliant rates offered by insurers in New Jersey last fall.  Very few went to the federal small business health exchange (SHOP), which shut down in November. And most didn’t try to reinstate their old plans when the first extension of the 2014 deadline to 2015 was announced.

 So it is the companies that took early renewal that will have to make major decisions down the road. Here are some of the most important aspects of the new law they will have to consider, since these elements have a major impact on rates and structure of the new plans:

 The elimination of “blended rates”

The new law eliminates “blended” rates which allowed employers to average out the risk of the entire workforce to come up with premiums. In the past, gender and health history were the major factors in those calculations.

 Now, rates will be based on an “updated census” of each employer. The census must include not only the individual employee but also all people within the family of the employee if they fall under the plan. Gender differences are eliminated, but age differences replace them. Employers must consider age data on all individuals and every child from age 0 to 18 (although different rates stop at the number three).

 Tiers and medical groups

 The new plans must fit into a set of tiers labeled bronze, gold, and platinum. Some of these come with much higher deductibles than the old plans.  These new parameters have resulted in higher premiums, as well as deductibles, for many companies that have converted.

 The new plans also regulate which providers the insured must use and many people have complained that they will not be receiving the same quality of medical care they did under their former plan because of this feature.

 Hourly workers are a “wild card”

Finally, companies that have a large number of hourly workers face additional challenges. Some of those hourly workers may pay less for insurance on the federal exchanges for individuals than they would under a group plan. If this is the case and enough employees decide to buy individual policies, it could put the employer at risk, since companies need from 70-75% of all employees to participate in their group plan.

 Those are some of the most critical features of the new ACA-compliant group plans.  Knowing these details is critical. Nothing is more important than being ready with key knowledge and questions when you talk to the insurance company and broker about your new plan.

 Contact NJMEP

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