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Small Business Employee Benefits and HR Blog

The 4 New Health Reform Rules All Small Businesses Need to Know

November 7, 2013
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2014 is almost here. But don't panic. While the new Affordable Care Act (aka ACA, health reform, ObamaCare) regulations seem overwhelming, the new insurance rules fall into four main categories of insurance reforms. Understand these new coverage and benefits rules, and your small business is well on its way to being prepared for 2014. 

  1. New Rules for Coverage

  2. New Rules for Pricing

  3. New Limits on Cost-Sharing

  4. New Benefits Covered

Read on for an explanation of these new rules. 

key health reforms that small businesses need to know

Image Source: Washington Council Ernst & Young

These rules take effect January 1, 2014 (unless otherwise noted below).

New Rules for Coverage

Health reform created new rules for coverage for individual health insurance and employer-based health insurance. These include:

  • Guaranteed-issue coverage - all individuals must be accepted regardless of health conditions (this is a major change to the individual health insurance market)

  • No pre-existing condition exclusions - insurance companies are no longer allowed to deny coverage to patients for a certain time period because of medical conditions that existed when coverage began

  • No rescissions of coverage - insurance carriers are no longer allowed to cancel coverage because you neglected to report a medical condition

  • 90-day waiting period limit - a group health plan may not use a waiting period that exceeds 90 days

New Rules for Pricing

Health reform created new rules for pricing of health insurance premiums.

  • No medical underwriting - insurance carriers are no longer allowed to use medical or health information to set the premium rate for the policy

  • Premium rate review -  health insurers must justify any rate increase of 10% or more before the increase takes effect (2011)

  • Premium prices can vary only by age, smoking status, geography, and family size (and these price variations are controlled) 

New Limits on Cost-Sharing

Health reform created new rules for cost-sharing, in other words how much a covered individual pays for coverage when they receive medical care.

  • Standard metal tiers - to make understanding coverage levels easier, "apples to apples"

  • Limits on deductibles and out-of-pocket costs - The new out-of-pocket annual limits are $6,350/year for individuals and $12,700/year for families (starting 2015), and deductibles are limited to $2,000/year for individual plans, and $4,000/year for family plans.

  • No annual or lifetime limits placed on essential health benefits (started phasing in in 2010)

New Benefits Covered

Health reform created new rules benefits that health insurance covers.

Small Business Requirements Under Health Reform

In addition to these new health reform rules on coverage and benefits, there are regulations impacting small businesses. What are your requirements as a small business?

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