At Helios we have the benefit of partnering with The Meltzer Group, one of the largest Benefits Brokers in the area, who gives us constant insight on the latest benefits compliance and every HR Professional’s favorite topic – Affordable Care Act. Last week, one of our partners from The Meltzer Group came to discuss how the changes in ACA, in conjunction with state specific laws in DC, MD, and VA, will impact our clients and organizations in the area. Below is a summary of the information obtained in that discussion.
ACA Review in DC, MD and VA
As you are likely aware, in 2016 organizations with 1 – 99 employees will be considered part of the small group market for benefits administration; this is a change from 2015 where small group was considered under 50 employees. As a small group, your organization’s health insurance will be billed on a member level basis. Member level billing is when the carrier will charge each employee a cost of insurance based on the number of people on their plan and take into consideration the ages of the individuals on the plan. Your plan will have and identified cost of insurance by age and each employee’s cost will be calculated on an individual basis based on their personal family structure. Two thousand fourteen was the first year member level billing was implemented (for the under 50 employees market) and many organizations were, and some still are, intimidated by the concept.
Member Level Billing – Employee Contributions
One of the biggest takeaways from our discussion about member level billing is how to fairly establish employee contributions without discriminating against a group of employees. Essentially you have two options:
- Your organization can make an employer contribution of X percent per employee; or
- Employees can pay a flat dollar amount.
This is a different approach than the traditional employer pays a flat amount; because of the age banded approach, applying this traditional method of splitting the cost of benefits will result in age discrimination. If you are still feeling intimidated by the idea of member level billing, here’s what you need to know about state-specific options that are available to you.
DC, MD and VA State Specific ACA Options
District of Columbia
- Organizations in the District of Columbia have specific regulations implemented by the DC Counsel they must adhere to on top of the Affordable Care Act. In 2016, all renewals for groups in the 1 – 50 market must provide benefits to their employees through the DC Exchange. In 2017, the requirement to provide benefits through the DC Exchange will expand to organizations under 100. In the past, transition relief periods have been implemented to ease the transition of this requirement; however, no official announcement has been made for 2016 and 2017.
- For groups in DC of under 50 employees you do have the option of a Professional Employer Organization (PEO); however, it is encouraged to fully understand how the PEO operates before transitioning to this platform.
- Self-funded plans were not approved by the DC Counsel for the District of Columbia.
- Self-funded plans are legal and ERISA compliant in the State of Virginia.
- For groups in VA of under 50 employees you do have the option of a Professional Employer Organization (PEO); however, again it is encouraged that you fully understand how the PEO operates before transitioning to this platform.
- Private Exchanges are an option for groups over 50 employees. It’s important to note that private exchanges are not set up to administer member-level billing. When the small group definition expands to under 100 in 2016, the ability to administer plans for groups under 100 in a private exchange may change. No official guidance has been given at this point on this topic.
- Self-funded plans are legal and ERISA compliant in the State of Maryland.
- For groups in MD of under 50 employees, it is illegal to utilize a Professional Employer Organization (PEO) for your health benefits platform. PEOs are legal for your payroll and ancillary benefits and in some cases PEO organizations are misleading in their ability to support small business in the state of Maryland.
- Private Exchanges are an option for groups over 50 employees; however, it’s important to note that private exchanges are not set up to administer member-level billing. In 2016 when the small group definition expands to under 100, the ability to administer plans for groups under 100 in a private exchange may change. No official guidance has been given at this point on this topic.
Affordable Care Act is a constantly evolving regulation that can be difficult to navigate. If you have additional questions about your options as a DC metropolitan small business, make sure to reach out to your benefits broker for more information.