The Affordable Care Act: One year later

16 Jan

It will soon be very important that companies comply with the ACA.

It's been about a year since the Affordable Care Act came into effect. The so-called employer mandate was originally to begin impacting companies in 2014, but was delayed until 2015, according to CNN Money. Now, companies are beginning to become more affected by the ACA than previously. Businesses will face fines if they don't offer coverage that isn't affordable or comprehensive.

Fortunately, there is an easy way to determine if a company will have to pay those fines or not. The first is very simple: If no employee chooses subsidized insurance from the ACA individual exchange and opts instead for either no insurance or a company policy, then the business will not incur the penalty.

After that, if someone chooses an individual plan versus the plan set up by his or her employers, then the company faces two more tests. The first is whether the insurance is affordable. If workers have to spend more than 9.5 percent of their income on insurance, it's not considered affordable.

The second test is comprehensibility. If the policy pays for at least 60 percent of the staff's entire medical expensive, plus offers other health benefits like prescriptions, then the plan is considered comprehensive.

What this comes down to for companies
Ultimately, what this means is that large businesses have all begun to make changes to their existing policies in order to guarantee compliance.

"Almost all large employers are having to tweak their benefits somewhat," said Larry Levitt, senior vice president at the Kaiser Family Foundation.

Remember that the obligation to provide health care doesn't apply if a company has fewer than 50 people. Businesses with 50 to 99 people will have to start providing health care in 2016.

Some companies are struggling to meet compliance
One business in Tennessee has been having trouble making its way toward complying with the ACA, according to NBC-affiliate WBIR.

"The main way it's affected us is we've seen our rates skyrocket. Over the last three years they've probably gone up 15 percent to 18 percent," said Terry Turner, owner and president of All Occasions Party Rentals in West Knoxville.

One of the issues with the new rule is that more employees are choosing their company's policy than before. Because of the influx of workers in various states of health, different businesses have been experiencing different levels of change in their rules.

Companies that will be affected in 2016 may wish to begin making changes to bring about compliance sooner rather than later. Those in charge of human resources planning have a responsibility to comply with the ACA.

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