Editor’s note: Throughout 2013, the American Rental Association (ARA) has been breaking down various provisions of the Patient Protection and Affordable Care Act (ACA) in order to explain what business owners need to know and do in order to be in compliance with the law. As Jan. 1, 2014 approaches and more of the law is rolled out, additional questions arise. While ARA will continue to address these issues, there are other valuable resources available for business owners. The focus of this month’s article is on insurance agents and the wealth of information they can provide to help employers and their employees work through the marketplace system.
Jan. 1, 2014, seemed like a long time in the future when the Patient Protection and Affordable Care Act (ACA) was signed into law on March 23, 2010. Now, in less than eight weeks, perhaps the most sweeping piece of social legislation of the past 50 years will take effect.
Since being signed into law, the ACA has been tested in the United States Supreme Court, which upheld the individual mandate. The mandate requires virtually everyone in the United States to purchase health insurance coverage with minimum levels of benefits. States and the federal government have worked non-stop to develop insurance marketplaces, formerly known as “exchanges,” one of the central elements of the ACA. The health insurance marketplaces are designed to provide consumers with a place to shop for health care coverage, compare prices and benefits, and get insured.
The central goal of the ACA is to have more people covered and to entice young, healthy people to buy health insurance. Tax subsidies are an important tool for achieving that goal. While it is true that using the marketplaces to purchase health insurance is not required, the only way to get a tax credit — if eligible — is to buy insurance through the marketplace.
The marketplaces, however, can be confusing and difficult to understand. Employers should consider continuing their reliance on the trusted insurance agent who currently handles their health insurance. Insurance agents will continue to be able to help their clients solve insurance problems and, in fact, they continue to be the only licensed entities providing insurance information services outside the marketplaces. Marketplace navigators are available to help customers work through the application process, but they are not licensed insurance agents.
In the potentially confusing world of the ACA, agents can help determine whether a client meets the requirements of the ACA employer mandate in 2015. Many employers in the equipment rental industry do not have a constant workforce. This makes it difficult to determine if they meet the 50-employee threshold that requires them to offer affordable coverage to full-time employees.
Agents will know what the ACA means by “affordable” and which plans meet the criteria. They can advise their clients on the level of coverage and the essential benefits that plans must have to meet the requirements of the ACA.
Many equipment rental businesses will not fall under the requirement of the ACA employer mandate. However, employers may wish to continue providing insurance for their employees through a group plan or help their employees obtain coverage through the individual marketplace. Some employees may be eligible for tax subsidies through the marketplaces. A qualified agent will be able to help them find the best plan for their income and family circumstances. The subsidy system can be especially confusing because it is based on costs that vary by the age of the person applying for insurance coverage. While younger people will pay less for insurance than older people under identical circumstances with no subsidy, it is possible that an older person will pay less out-of-pocket for identical coverage with a subsidy. Insurance agents are professionals who can understand these pricing oddities and explain them thoroughly.
Employers will be required to provide information about each employee’s income and benefits to the government. Even if they are not going to offer insurance coverage to their employees, they will be required to provide this information. When employees apply for a subsidy, the information will be used to determine if they are eligible.
Over the past year, the American Rental Association (ARA) has worked to educate members about the rules, regulations and obligations of the ACA. It began with an educational seminar at The Rental Show last year in Las Vegas and has continued with a series of articles in Rental Management. The archives of all of these articles, plus additional resources, are available on RentalManagementMag.com.
ARA says it will continue to provide information as the ACA is rolled out and implemented over the next year. To that end, ARA plans to present another educational seminar at The Rental Show 2014 in Orlando, Fla. “Healthcare Round Two: What Do the Latest Changes Mean for Your Business?” will be held on Sunday, Feb. 9, 2014, at 8 a.m. The panel discussion will address how the changes in the law will impact you, your business and your employees.