Many advisors and small business clients around the country have learned this month that they will no longer be able to offer their current health care plan to employees when their contract runs out in 2014.
That's because the Patient Protection and Affordable Care Act (ACA) is expanding the level of coverage and services that must be included in every health insurance policy, and many policies provide less than what is required in 2014 by federal law.
"Starting January 1, all policies not grandfathered in have to come in compliance with the ACA," said Clare Krusing, deputy press secretary of America's Health Insurance Plans, a national trade association representing health insurance companies that provide benefits to more than 200 million people.
As a result, many companies have been notifying policyholders about upcoming changes.
In New Jersey, for example, Horizon Blue Cross Blue Shield of New Jersey sent letters to 71,000 small employer accounts telling them that their current insurance plan can't be renewed on its anniversary date, said Thomas Vincz, a Horizon spokesperson, in a e-mail.
"All of these additional benefits required Horizon BCBSNJ to create new plans to meet these requirements and these new benefits have increased costs and premiums," Vincz said.
The ACA requires all health plans to include "essential benefits," in 10 categories. Examples of these benefits include coverage for pediatric vision and dental care, physical therapy, oral chemotherapy and hearing aids.
The federal health care law also prevents plans from excluding people with pre-existing conditions and stipulates certain levels for deductibles, co-payments and maximum out-of-pocket limits. For example, deductibles can be no more than $2,000 for individuals and $4,000 for families in small group plans. The requirements may mean better coverage for many workers, but higher costs for employers.
Although companies with fewer than 50 workers don't have to provide health insurance, the changes to the small-group health insurance market may impact their bottom line and increase premiums, says the National Federation of Independent Business. The organization has a frequently asked questions section on the ACA for small businesses on its Web site.
Small employers in New Jersey can choose to have a new plan be effective as early as January 1, Vincz said. Small employers, as well as individuals, were supposed to be able to begin shopping for insurance plans on the exchanges when they open Tuesday. However, the Small Business Health Options Program, open to companies with 50 or fewer full-time employees, won't be ready to take online applications on October 1 as planned, USA Today and the Wall Street Journal reported.