On Jan. 1, 2014, the Affordable Care Act will go into full effect. Within the nearly 1,000-page federal law are several provisions that will require businesses to evaluate their health care plans—or lack thereof.
In late July, the Greater Austin Chamber of Commerce hosted a panel on the impending reform. Speakers Duane Galligher, executive director at Texas Association of Health Plans, an Austin-based organization that represents health insurers and other health care entities, and Richard Warren, vice president of compliance and operations at Higginbotham & Associates in Fort Worth, an insurance and financial services brokerage, discussed what businesses need to consider as they prepare for implementation of the act.
"It's a very complicated bill, and I think there will be a lot more direction going forward," Galligher said. "As long as [business owners] understand this is an issue and something they need to pay attention to, that would be the first step."
Affordable Insurance Exchanges in Texas
The Affordable Care Act establishes new public insurance marketplaces called Affordable Insurance Exchanges in which individuals and businesses may shop for and compare health insurance plans. Individuals may be eligible for tax credits or subsidies, and though it is not yet clear, Galligher said most experts have envisioned the exchanges will be available to those people who want to purchase a policy whether they are eligible for a subsidy or not.
"The subsidies are so wide and apply to up to 400 percent of the federal poverty level, which can be up to about $88,200 per four-person household, [that] a lot of people, in fact most, who are going and purchasing an individual policy through [the exchange] are going to be eligible for a subsidy," Galligher said.
Although it is mandated under the law, Gov. Rick Perry said he would not support the creation of a statewide health care exchange. However, Texans will likely have access to a federally facilitated exchange as well as private exchanges, Galligher said, though he added that buyers should beware.
"There are agencies out there calling themselves exchanges operating in the private market, [but] they can't fulfill all the requirements required under the [Affordable Care Act]. So the private exchange, while it is a private tool to get a vibrant marketplace and help consumers make better choices regarding their insurance options, there are some limitations to that approach," Galligher said.
Terms to know
Essential health benefits: Yet-to-be-determined benefits that each plan must contain. Some current less-typical benefits that will be considered an essential health benefit are mental heath services, and eye and vision care.
Bronze plan: A health insurance plan that covers 60 percent of average medical costs. A silver plan covers 70 percent of average medical costs. The levels of plans increase by 10 percent increments up to a platinum plan.
Summary of benefits coverage: Health plans that renew after Oct. 1, 2012, must supply all employees with a summary of benefits coverage (SBC). Warren describes the document as a CliffsNotes of benefits that is supposed to help clients decide between health plans. Each SBC will contain the cost of two services: live birth and Type 2 diabetes.
Qualified Health Plan: An insurance plan that is certified by an exchange and provides essential health benefits as well as other requirements.
