Big health questions face businesses soon

How Americans purchase health insurance will change dramatically in 2014 when the individual mandate goes into effect and employers with 50 or more full-time employees must offer “affordable” health insurance or pay a penalty.

Large employers are expected to continue to offer health insurance to employees, but smaller companies may opt to let workers purchase insurance from the health insurance exchanges that are expected to be up and running for open enrollment by Oct. 1, 2013, for coverage beginning Jan. 1, 2014.

doctor with patient

Between 2014 and 2016, only individuals and small group employers with up to 100 workers are eligible to participate in the exchanges, although state-run exchanges can limit groups to 50 or less.

Nondiscrimination rule

Even if your company continues to offer a health insurance plan, highly compensated executives who enjoy gold-plated medical benefits as part of their total compensation package may find extra perks cut back. Nondiscrimination rules in the Affordable Healthcare Act generally will prohibit employers from favoring higher-paid employees with special benefits, such as offering lower premiums, paying deductibles or implementing shorter waiting periods for coverage.

Anticipating the change, some large companies have already scaled back on supplemental benefits for senior executives.

Despite the nondiscrimination rule, employers are permitted to charge higher-earning employees more for the same coverage lower-paid workers receive without being in violation of the nondiscrimination rule under Obamacare.

Employees will face a 40 percent excise tax on the amount their employer pays for their health insurance in 2018 if the insurance is considered a “Cadillac” healthcare plan. Cadillac plans are defined as those costing $10,200 for an individual or $27,500 for families.

Other rules

Next year, plans will no longer be able to cap annual essential health benefits or exclude participants based on pre-existing conditions. Additionally, insurers will not be able to charge higher premiums based on an individual’s gender, occupation or health. The waiting period before insurance kicks in will be limited to 90 days.

Currently, some companies offer a reduced health insurance premium of up to 20 percent in exchange for participation in a wellness program, such as a weight-loss, exercise or smoking cessation program. The discount allowed will increase to 30 percent next year and may go as high as 50 percent.

If participating in a wellness program is “unreasonably difficult” or inadvisable for you, your employer will be required to provide an alternative standard to the wellness program.

Beginning Jan. 1, 2014, a company with more than 200 full-time employees was supposed to automatically enroll new employees in the company’s health plan with the lowest premium. The employees would have had the option to choose a different company plan or opt out altogether.

However, the Department of Labor has postponed the deadline. Experts speculate that it may not go into effect until 2015.