The Affordable Care Act (ACA)
The Affordable Care Act, also called Obamacare, requires employers with 50 or more employees to offer affordable group health insurance to eligible employees. The ACA considers employees to be eligible for employer-sponsored healthcare benefits if they work at least 30 hours a week. Called applicable large employers, businesses that meet the employee minimum must offer health insurance to at least 95% of their full-time employees, including dependents. They must also provide their employees with a notice of coverage and available benefits, an outline of offered plans and employee costs, and an annual confirmation of offered benefits.
Small businesses with less than 50 employees are not subject to ACA regulations. However, the ACA does offer resources for small employers seeking healthcare coverage. The ACA established the Small Business Health Options Program (SHOP) for small business owners needing group health insurance. Using private insurance companies or SHOP-registered brokers, employers can enroll in SHOP to qualify for health coverage and the Small Business HealthCare Tax Credit.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
The Consolidated Omnibus Budget Reconciliation Act allows former employees to continue their current health insurance coverage for a limited time after termination or other qualifying reasons for job loss. Under federal law, employees with over 20 employees are required to offer COBRA benefits to eligible employees. The qualifications for COBRA health coverage are as follows:
For employees:
- The individual must have been employed and enrolled in the employer’s group health insurance plan
- The individual must have been laid off, fired, retired, quit, or experienced a significant cut in work hours
For dependents:
- The individual is listed as a dependent under someone with the abovementioned qualifications.
- The individual is a spouse who legally divorced or separated from the COBRA-qualified employee
- The individual is a spouse of a COBRA-qualified employee who passed away
Employers and insurance carriers will detail COBRA rights information for employees during enrollment. The employee will then have 60 days to decide whether to receive COBRA coverage. If they do opt for COBRA benefits, the employee will receive insurance under COBRA the day after their employer’s plan coverage ends. This COBRA coverage will then last for 18-36 months, depending on the employee’s COBRA qualifications.
Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income Security Act regulates certain employer-sponsored retirement and healthcare plans. The ERISA manages defined-benefit plans and defined-contribution plans like 401(k) plans and private-sector health plans like health maintenance organization plans, flexible spending accounts, disability insurance, and life insurance.
When it comes to healthcare, ERISA protects employees enrolled in various healthcare plans, including mandatory plans, plans receiving employer contributions, and plans that outline how funds are allocated. Under federal law, providers/employers must inform enrolled participants of their plan’s coverage eligibility, benefits, associated costs like premiums, deductibles, and copays, and information about insurance networks and the claim process.
Health Insurance Portability and Accountability Act (HIPAA)
The Health Insurance Portability and Accountability Act protects employees when they are in between jobs. If an employee loses group health insurance coverage, HIPAA grants that individual a special enrollment period to apply for secondary coverage, such as their spouse’s employment-based plan. HIPAA-qualified employees must request enrollment within 30 days of losing their former coverage. Once they apply, coverage should come into effect on the first day of the first month following the employee’s enrollment request.
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