The Affordable Care Act and Your Company

There have been changes for employers large and small, but many agree that the Affordable Care Act has come with negative and positive consequences. Two components that have impacted employers with over 50 full-time equivalent employees are: A. providing minimum essential coverage to those that work more than 30 hours per week on average and B. ensuring that coverage meets affordability guidelines. In terms of additional reporting, employers in this segment must also provide forms 1094 and 1095 for their organizations and employees. Technology, like Maxwell Health, has made reporting easier than ever, and many payroll providers include tools for calculating full-time eligible employee populations and affordability testing right within their systems. Now that the ACA has been in effect for several years, many employers have realized there are relatively painless ways to comply. Great brokerages provide tools to help their employers with respect to reporting and compliance. 

Small companies have had differing challenges, mainly surrounding controlling their rates, calculating premiums, and navigating the ACA benefits market. With the adoption of guaranteed issue pricing for companies with under 50 employees, many carriers exited the fully-insured small group market and some were purchased by larger carriers. Age banded rating has been a challenge for many small companies and guaranteed issue pricing has made many pay more than they should, and has helped others to pay less. Again, companies have to rely on expert benefits brokers to ensure they don't overpay for group premiums. A very important part of this puzzle is determining a group's underwriting risk profile. If a broker tells a company they are 'sick' and cannot obtain better rates without having that come directly from a carrier or third party underwriter, it may mean proper due diligence was not performed. This is a common broker retention strategy, but comes at the expense of the client. 

In summary, the ACA has impacted all employers that provide group benefits in some way or another. Ultimately, companies must work with benefits consultants that know how to help them to navigate the group market, remain compliant, and use best-in-class solutions to ensure programs are smoothly operated and cost-competitive.