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Business // Thinking Smart
David S. Chang

Making Sense Of The New Federal Health Care Law

Starting this year, the Affordable Care Act (ACA), aka Obamacare, took effect. It was passed in 2010, and it will take at least five years for all of its changes to take effect. ACA is the largest overhaul of the U.S. health care system since Medicare and Medicaid were passed in 1965. Regardless of where you stand on this issue, there are some major differences of which employees, employers and consumers should be aware.

The 1974 Hawaii Prepaid Health Care Act that set minimum health care standards for full-time workers still applies, so many may not notice differences in how you purchase or provide health insurance.

The ACA introduced an online exchange (Online Marketplace) in every state. In Hawaii, it’s called the Hawaii Health Connector. The Connector is actually two exchanges: 1) Individuals who are not covered can buy plans on the Connector. The plans are broken down into four different levels of coverage: Platinum, Gold, Silver, Bronze. 2) Small businesses can purchase plans through the Small Business Health Options Program (SHOP). The Connector, however, only offers the Platinum (90/10 co-pay) and Gold (80/20) plans for small businesses. The Silver (70/30) plan is offered, but only for companies that don’t have to comply with the ACA. The Bronze (60/40) plan currently is not offered in Hawaii.

Employers

* If you are an employer, you can continue to choose plans for your employees and purchase them from insurers and brokers.

* Small businesses with 25 or fewer full-time employees and with an average annual salary of less than $50,000 may qualify for tax credits. In order to get the credits and subsidies, the plans must be purchased through the SHOP exchange.

* From 2010 to 2013, for-profit small employers may be eligible for a 35 percent tax credit that can be filed retroactively for 2012, 2011 and 2010. From 2014, they may be eligible for a tax credit that goes up to 50 percent for up to two years.

* For 2010-2013, tax-exempt small employers may be eligible for a tax credit up to 25 percent and up to 35 percent for 2014.

Employees

* Employees may see a change in benefits, but your employer is still required to provide health insurance as before.

Consumers

* Individuals not covered by a plan can buy plans on the Connector. Premiums vary only on age, tobacco use, and if a family or individual plan.

* Medicaid and Medicare recipients do not have to apply for new coverage or go to the Connector.

The ACA was created to ensure Americans have access to affordable health insurance. Since its launching, however, there have been issues with the implementation and costs. Daniel Peters of WealthBridge Inc. states, “We have seen rates increase under the new plans, but there are some extra benefits as well.” Also, in response to canceled health policies, the Obama administration announced that “Transitional Plans,” existing health plans that do not meet ACA requirements, can be renewed for one year.

JP Schmidt, CEO of Family Health Hawaii (FHH), a new health care insurance provider, says, “Insurers are struggling with compliance and are now offering “Transitional Plans” with few benefits … Since we were set up to be in compliance, Family Health Plans have more benefits for members including all ACA benefits.”

HMAA and UHA also offer ACA-compliant plans but are not on the exchange. HMSA and Kaiser are the only two participating on the Connector.

To help with the transition, the Hawaii Insurance Division launched a health, homeowner and motor vehicle rates premium comparison sheets for 2014 at cca.hawaii.gov/ins/. Gordon Ito of the state Insurance Commission says, “Our goal is to inform consumers so they can compare their current policies to make sure they aren’t over- or underinsured, which will help them think smart and plan for the new year.”

david@artofthinkingsmart.com

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