Any business having more than 50 employees is generally considered as a large business. There are many new rules and regulations in the Affordable Care Act which may affect big or large businesses. These important provisions may relate to tax credits and reporting, early retiree coverage, grandfathered plans and other aspects of group health insurance plans for large businesses. Some of such provisions have been discussed below.

  • The Affordable Care Act does not bind employers to provide health insurance. But from 2014, large businesses not providing adequate health insurance will be required to pay an assessment to employees receiving premium tax credits to buy their own insurance.
  • Job-based coverage effective on March 23, 2010 has been exempted from certain provisions in the law. These plans which have been basically same since then are known as Grandfathered plans. But they are free to enroll people after that date and still be called a grandfathered plan. Status of the plan depends on date of its creation. These plans have to end lifetime limits and arbitrary cancellation of the coverage. They have to cover children under 26 years of age and should provide a summary of benefits. They are not required to cover free preventive care, guarantee to appeal and protect consumer’s choice of doctor.
  • Employer-based plans providing health insurance to early retirees ages 55-64 are eligible to get financial help for paying for high-cost early retirees. They can avail the help through Early Retiree Reinsurance Program. It helps to lower cost of premium and employer health costs. The Early Retiree Reinsurance Program or ERRP offers reimbursement to participating employment-based plans for a portion of the costs of health benefits. It includes early retirees, their spouses, surviving spouses, and dependents.
  • Employers do not require reporting the cost of insurance on employee W-2s from 2011 as it is optional. The reporting was aimed at being informational and providing transparency into health care costs. The amounts reported are not taxable. But employers have to report cost of coverage of an employer-sponsored group health plan on an employee’s Form W-2. Many of them may get transition relief for tax-year 2012 and beyond. The amount reported does not affect tax liability.
  • From 2011, insurance companies have been bound to spend a specified percentage of premium dollars on medical care and quality improvement activities. They have to meet a medical loss ratio or MLR standard. Those who do not follow this rule have to provide rebates to their consumers from 2012.
  • There is a requirement of making contributions under the transitional Reinsurance Program to support payments to individual market issuers covering high-cost individuals by all health insurance issuers and self-insured group health plans according to Affordable Care Act.
  • New requirements have been set for group health plan by the Affordable Care Act. Large businesses require being fully aware of these changes before buying group health plans to its employees. No employers will be subject to penalties until additional guidance is issued.
  • According to Affordable Care Act employers must offer health coverage or a shared responsibility payment to their full-time employees from 2014.