Patient Protection Affordable Care Act [PPACA] compliant plans for Employers Assistance to Employees

Effective as recent as January 01, 2020, there has been big leap forward in PPACA by introducing scheme of Health Reimbursement Arrangements (HRA) to make access to health insurance to employees easier, bearable and simpler for the employers to circumvent complexities of group insurance. Health Reimbursement Arrangements (HRAs), makes obtaining health insurance flexible, efficient, and financially viable for employers and employees.

HRAs are employer-funded individual accounts of its employees who have opted to participate. Employees can spend the money deposited by employer in their HRA accounts for medical expenses. Employees have to purchase major medical insurance policy, inclusive of family, to have HRA account establish by the employer. The HRA funds are tax free, both to the employer and to the employee.

An employer is required to give a notice to its employees minimum 90 days preceding commencement of open enrollment on November 1^st of employer’s policy to offer Individual Coverage HRA employees.

Two types of Health Reimbursement Arrangements (HRAs)  are discussed here:

• Individual Coverage HRAs, and
• Excepted Benefit HRA

Individual Coverage Health Reimbursement Arrangements (HRA)

Effective January 01, 2020, new rules enable employers to offer a new “Individual Coverage HRA” as an alternative to traditional group health plans. The employer maintains the same tax-favored status of the employer contributions towards a traditional group health plan, the employee gets tax free contribution to his/her Individual Coverage HRA account.

Here are outlines of features of Individual Coverage HRA:

For Employers

• The employers make determination of Individual Coverage HRA offerings at their discretion based on the classification of employees. This offering cannot be made to enrollees of group plan if offered by the employer. The classification of employees may range from hourly workers to full time employees preferably in the same regional geographic area, including non-resident aliens with no U.S. based income. Certain restrictions apply for class size.
• This is tax-favored benefit given to employees to buy major health insurance (ACA compliant) or Medicare Part A, B or Part C (Medicare Advantage) to offset Out-of-Pocket medical expenses. Use of HRA to reimburse individual market premiums is prohibited.
• The employers are freed up from complexities of arranging health insurance coverage to their employee as ‘Employee Benefit’ and its attendant administrative overheads.
• The employer does not have to have a captive group health insurance plan for employees from a company on annual basis and maintain fluctuations of employee enrollments.
• Employer has to announce the policy at least 90 days before it is to be put into action.

For Employees

• When an employee, below age 65, accepts Individual Coverage HRA, he/she must be enrolled in any PPACA Individual Health Insurance plan, through Exchange of Federally or State Facilitated Marketplace or Off-Exchange; and if above age 65, be enrolled in Medicare Part A, B or Part C (Medicare Advantage).
• Employer sets up exclusive account for each employee to offset or reduce copays, deductibles, or other incidental expenses of medical costs for its employee, and maybe for his/her family up to a maximum of dollar amount for the year.
• Employer can allow unused amount in any year to roll over from year to year.
• The employees make their own decision in buying their own insurance of their own choice. The plan and account are portable and go with the employee.
• Employee and member(s) of his/her family cannot have Advance Premium Tax Credit (APTC) while enrolling in a plan on Marketplace (Exchange) when taking Individual Cover HRA from the employer. It is either Individual HRA or APTC through Exchange if available to you.

Excepted Benefit Health Reimbursement Arrangements (Excepted Benefit HRA)

There may be scenarios when some employers may wish to offer tax-free reimbursement without regard to whether or not employees have qualified ACA compliant insurance coverage. The Excepted Benefit HRA offers reimbursement opportunities to employees who may or may not participate in the group health plan, and who do not go along well with Individual major medical plan and Individual Coverage HRA. Employer may offer this tax advantaged benefit to employees. The qualifying conditions are as follows:

• The annual Excepted HRA contribution must be limited to $1,800 per year.
• The Excepted HRA must be offered in conjunction with a traditional group plan, although the employee is not required to enroll in traditional plan.
• Excepted Benefit HRA may be used to reimburse expenses of limited dental, limited vision, and reimburse premiums for COBRA and Short Term Limited Duration Insurance, and/or cost sharing. [Short Term Medical is available in market from 30 days to as long as 36 months depending upon state and Zip Code.]
• Excepted Benefit HRA must be uniformly available to all similarly situated class of employees.
• Excepted Benefit HRA maybe alternative to employee’s share of premiums of ACA compliant plan.

Optimum Employer’s Assisted Health Insurance for Employees

With combination of Individual Coverage HRA and Excepted Benefit HRA, it is time for employers to make use of these new rules to replace group health insurance for employees. Employees can shop for insurance and buy the best that goes with them without overseen by the employer. New employees can buy this insurance on day one, and they can carry insurance with them as they quit or leave. Individual Coverage HRA and Excepted Benefit HRA are tax-free financial assistance that the employer offers. Despite the freedom for employees to purchase health insurance what they choose to, it is significant that employer establishes guidelines on which employer’s assistance through Individual Coverage HRA will be extended by benchmarking plan(s) for employees to choose from the array of available plans.

Common Conditions of ACA Enrollment

• Click here to open common conditions and terms associated with ACA plans.

Financials of ACA Plans

 ACA plans have been under criticism ever since the Act came into being due to following factors:

•  To the lower income group of people who may get maximum benefit of APTC subsidy for premiums, but the affordability of deductibles and Out-of-Pocket Maximums are out of reach.
• For groups of people who are in income levels beyond 400% FPL, the premiums have gotten progressively out-of-reach, especially for above 40 age group.
• To negotiate with Out-of-Pocket Maximum in case of hospitalization, medical supplemental hospital indemnities have emerged in the market, which provide relief in financials related to hospitalizations.

Steps to Follow to Select a Plan and Sign Up

You have two paths to follow to get insurance: 

(A). EITHER you’d prefer to take subsidized insurance through federal help available to you. In the case, enroll following (A) path by switching over to Individual & Family ACA plan under the menu. OR else,

(B). You’d prefer to take help available from your employer through policy of Health Reimbursement Arrangement (HRA) as described above.  

If you follow Path A above, follow these steps:  Click here and enter basic information to see the plans offered by UnitedHealthcare® showing you plans to enroll based on subsidy of Advanced Premium Tax Credit qualified for you, your family size and family income. This will enable you to make best estimate of insurance costs for the year on the following criteria: You may skip giving answers to initial screens to get to see all plans under tab All plans to see what plan you want.

• Depending upon your income and size of your family, plans being offered by UnitedHealthcare® will be pulled up from Marketplace of Healthcare.gov.
• Since the ‘Deductible’ prevails for the year before insurance picks up to share costs with you, look for plan(s) where you can put up with ‘least deductible’ since premium increases as deductible reduces. This is the amount that your health plan wants you to pay per year upfront before the coinsurance share from the carrier is picked up.
• Filter the plans for Silver and Gold which will show plans for reasonable deductible. Gold and Platinum plans have least deductibles.
• You may click on tab All plans and use slider Max deductible to filter out plans.

Selection of a Primary Care Physician

• Click here to search for physicians and tentative select 2 – 3 physicians.
• Call offices of physicians and verify that the tentative plan(s) you selected are active and the physician is accepting new patients.
• Make note of the contact information of the physician you have selected to input in your application for enrollment.

Selection and Enrollment in Plan

• Click here to revert back to enrollment in the plan.
• Follow the step through screens and enter information about the level of healthcare you expect during the year, the Primary Care Physician, the Prescription medications you take. This will show up on the plans that are displayed before you.
• You see the premiums, the subsidy of Advance Premium Tax Credit (APTC) you get based on your estimated income of you and your family for the enrolling year. Select the plan you want to enroll in.
• Click on the button Plan details to download this PDF file and save it for future reference. Browse over the benefits and details of the plan.
• Click on the button Enroll now, and follow the screens to enroll in the plan. You will get an email for enrollment.
• Save your login credentials of enrollment. You’d need to login to update your income and special events or changes in your life that may affect your insurance status.

Follow up after enrollment

• Click here to enroll in Galileo.  This is UnitedHealthcare® Virtual First Plan. This is your amazing virtual access to doctors through text or video, 24/7. It covers primary, urgent, and chronic care. You can get prescriptions, lab test, and specialist referrals. Best of all, there are no copays, deductibles, or surprise bills.
• Make sure you stick to In-Network providers to lower your costs for ‘Doctor visits’ and ‘Prescription drugs’.
• Be ready to file your tax return sometime in March of next year. If you have not received an IRS Form 1095-A from Healthcare.gov to show the partial premiums paid to carrier on your behalf, you can download this form from HealthCare.gov using your login credentials you saved on HealthCare.gov via enrollment with UnitedHealthcare®.
• Give this IRS Form 1075-A to your tax preparer to reconcile your Premium Tax Credit payment on IRS Form 8962 as part of your tax return.

Alternatives to Individual ACA Plans

Here are some other options available to you as alternatives to ACA major medical plans to consider:

• If you are in a situation that ACA compliant major medical plan is too expensive, look for alternatives of Short Term Medical plan(s) and TriTerm Medical Plans. There is an array of these plans available from 1 to 36 months with range of deductibles and Out-of-Pocket Maximums. Browse over these plans under menu items.
• A typical Short Term Medical or TriTerm Medical plan when combined with supplemental plan of Hospital Insurance (for below age 65) can offset out-of-pocket costs due to hospitalization. See an illustrative example here.