The USA tops every list when it comes to medical research and the availability of the most modern treatment methods and facilities. However, for a majority of people, none of these services are affordable. The recent Affordable Care Act will hopefully contribute to making healthcare more accessible to everyone living in the USA. For those moving from Europe to the USA, the cost of care may feel as a rip-off and end up being an enormous expense.
Health Insurance for Expatriates
Most expat employees take advantage of group health insurance plans offered by their employer. Usually, there is a choice of different packages. For example, plans with high monthly contributions expect individuals to pay only a low share of the costs incurred through medical treatment. Other plans offer low monthly rates, but personal contributions towards treatments can be significantly higher. Virtually no insurance provides 100% coverage. The Agency of Healthcare Research and Quality provides advice and guidance in choosing the right plan.
Affordable Care Act
The Affordable Care Act (ACA, or known as Obamacare) will go into effect January 1, 2014 and Americans are polarized on whether or not it’s a positive or negative change to US healthcare. But no matter your personal beliefs, it has been passed by Congress and it is happening. The best thing to do is to fully understand its impact and ensure you are compliant.
The “pay or play” mandate, requiring employers with the equivalent of at least 50 full-time employees to provide affordable minimum value health insurance coverage to their full-time employees, has been delayed by one-year until Jan. 1, 2015. However, the delay on implementation of the “pay or play” mandate did not delay the individual mandate, which will require individuals to purchase health insurance coverage in 2014, or pay a tax penalty. The delay in the employer mandate will also not affect employees’ access to the premium tax credits available under ACA exchanges beginning Jan. 1, 2014.
Other ACA provisions also require compliance by Jan. 1, 2014, including:
- Minimum value compliance for employer-sponsored group health plans needs to be determined for the 2014 plan year. This information must be reported both in written notices about the new health insurance exchanges, which most employers should have distributed by Oct. 1, 2013, and in summaries of benefits and coverage due during 2014 annual enrollment.
- New fees and assessments, such as the Patient-Centered Outcomes Research Institute (PCORI) and transitional reinsurance fees and health insurer tax.
- Summaries of benefits and coverage (SBCs) must be prepared and distributed for 2014, using an updated template.
- Elimination of annual dollar limits on essential health benefits under group health plans, beginning Jan. 1, 2014.
- No more pre-existing condition exclusions for adults and children for plan years beginning in 2014.
- Grandfathered health plans can no longer exclude adult children under age 26 who have access to other employment-based coverage, effective Jan.1, 2014.
- Coverage waiting periods can’t be longer than 90 days for plan years beginning in 2014.
- Coverage of clinical trials is required for non-grandfathered group health plans, along with prohibition on discrimination based on participation in a clinical trial.
- New wellness incentive rules for plan years beginning in 2014.
- Maximum out-of-pocket limitation will prohibit, for both insured and self-insured non-grandfathered plans, out-of-pocket limits that that exceed $6,350 (self) and $12,700 (family) coverage, for plan years beginning in 2014.
What Should Employers Be Doing?
First, employers should make sure their plans comply with all ACA provisions that have not been delayed. Next, employers should plan for eventual application of the pay or play mandate to their workforce. This should include:
- For a smaller organization, confirming whether or not it will meet the threshold to be subject to the mandate in 2015, particularly if the organization could be considered under common control with other entities that share some common ownership.
- Confirming how the employer will comply with the mandate—whether it will pay or play and how to implement its compliance strategy in 2015.
- If 2014 coverage expansions were planned to achieve compliance, deciding whether to proceed, delay until 2015 or consider another compliance strategy.
- Identifying which employees are full-time, seasonal or variable hour employees.
- Considering whether and how to use the safe harbor “look-back measurement method” of determining full-time status of some or all ongoing employees or new variable hour and seasonal employees.
- Considering whether and how the employer’s use of limited term employees and agency temporaries could affect compliance with the mandate and developing strategies to address those issues.
The one-year delay also gives employers more time to see whether changes in the law may relieve them from expanding coverage to workers who average more than 30 hours per week or perform only seasonal labor. As of mid -September, at least four bills had been introduced to change the full-time employee standard to 40 hours. At this point, the chances of passage are unclear, so this will be an important issue to watch.