4/23/14 Update posted below this article
A good article was published in USA Today about a topic that I have been discussing with my clients for the last two years. The Affordable Care Act will limit the size of deductible levels for small group employer plans starting in 2014. That cap will be a maximum of a $2000 deductible for individuals and $4000 for families.
I have dealt with a number a small groups that have a $2500 to $5000 deductible for there employees. This has been the only way for some smaller employers to be able to afford to provide a benefit package to their employees. As a matter of fact, the article indicates that only about one-third of current small group employer plans would meet the new standards.
This will leave many employers with tough decisions to make. Do they modify their coverage to meet their new standard? This will increase their cost, substantially for some. Will they just say forget it and drop their group coverage? This may be an option moving forward, especially for companies with a lower wage base, because these employee’s may now be able to go into the federal exchange and in some cases be able to acquire their insurance cheaper through the exchange.
These are situations I work with companies about on a daily basis, but many small businesses are unaware of it.
If you want to read the USA Today article here is a link to it:
The lower the deductible, the higher the cost of premiums for small businesses.
UPDATE : 04/23/2014
Law Eliminates Affordable Care Act Provision on Deductible Limits for Small Groups (1-50)
President Barack Obama recently signed into law the Protecting Access to Medicare Act of 2014. Section 213 of the law repeals a provision of the Affordable Care Act (ACA) that required non-grandfathered, fully insured small group health plans to limit annual deductibles to $2,000 for individual coverage and $4,000 for family coverage (indexed annually for medical inflation).
The repeal goes into effect immediately; however, there was already an exception that allowed health plans to exceed the deductible limits if the plan could not reasonably reach the actuarial value of a given level of coverage under the limits. Since this exception was already in place, the repeal of the provision does not have an operational impact on Blue Cross and Blue Shield of Texas’ small group plans.
This communication is intended for informational purposes only. It is not intended to provide, does not constitute, and cannot be relied upon as legal, tax or compliance advice. The information contained in this communication is subject to change based on future regulation and guidance.