Employers that hate new taxes might have an easier time adapting to the Patient Protection and Affordable Care Act (PPACA) than they expect.
The PPACA “shared responsibility” and “minimum essential coverage” provisions appear to create a big loophole for employers that simply want to minimize new PPACA taxes for themselves and their employees, not offer rich health benefits.
Mark Holloway, a compliance specialist at Lockton Companies, wrote about the loophole recently in a new commentary responding to recent releases of proposed PPACA regulations and U.S. Department of Health and Human Services (HHS) implementation guidance.
If PPACA works as drafters expect, it will require non-grandfathered individual and small group plans to cover a standard “essential health benefits” (EHB) package that meets predetermined benefits levels and holds cost-sharing to specified limits.
Only the benefits level and out-of-pocket maximum rules will apply to large insured group plans. The EHB rules will not apply to large insured group plans.
PPACA will require self-insured plans to cover a package of basic preventive services without imposing deductibles, co-payments or other out-of-pocket spending requirements on the plan enrollees. But PPACA exempts self-insured plans from most other new coverage requirements.
Starting in 2014, PPACA coverage mandate provisions will require many individuals who are classified as having access to affordable health coverage at work to either have health coverage or else pay a new penalty tax that will be imposed on the uninsured.