Q & A with Davenport and Associates

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What happens to my current health insurance plan in 2014?

That will depend on when your current plan first went into effect – what we call the “effective date” of your plan. If your plan has an effective date before March 23, 2010, you may have what’s called a “grandfathered” health insurance plan, and you may have the option to stay on that plan or change to one of the new metallic plans. If that is not the case, then you are probably in a compliant ACA metallic plan.

What’s the penalty for not having health insurance?

The tax penalties went into effect in 2014, which means, if you’re uninsured for more than three months in 2014, you may incur the tax penalty and that penalty would be applied when you file your 2014 income tax return. In 2014, the penalty will be the greater of 1.0 percent of taxable income, or $95 per adult and $47.50 per child (up to $285 per family). In 2015, the penalty will be the greater of 2.0 percent of taxable income, or $325 per adult and $162.50 per child (up to $975 per family). In 2016, the penalty will be the greater of 2.5 percent of taxable income, or $695 per adult and $347.50 per child (up to $$2,085 per family).

Are there new waiting periods under the ACA law?

The only major change is there can be no waiting period greater than 90 calendar days. Many groups used the 1st of the month following 90 days and they are changing to the 1st of the month following 60 days.

Is there any way to avoid the ACA group requirements?

Yes, self-funded insurance avoids some of the ACA regulations. Many insurance carriers have redesigned their self-funded plans so that they work for smaller businesses. This allows groups to avoid some of the negative ACA regulations like community rating, guaranteed issue, and pediatric dental, which tend to drive the cost up.

Do I need to purchase dental insurance?

If you cover a child under the age of 19 on your health insurance plan, then you must purchase pediatric dental coverage. This year, the coverage is until the age of 21. Starting next year, the coverage is until the age of 19. This is not optional. It is a requirement by the ACA law.

What will be my penalty, as an employer, if I do not offer insurance?

In 2015, the penalty applies to groups with 100+ employees. In 2016, the penalty applies to groups with 50+ employees.  Your company may be responsible for a non-tax deductible penalty for each month you do not offer adequate or affordable coverage. Penalties can vary. The maximum annual penalty is the lesser of $2,000 per full-time employee – after the first 30 employees (80 for 2015) or $3,000 for each full-time employee that enrolls in a subsidized health plan on the marketplace.