What do group health plans look like under the Affordable Care Act?

Much concern has been expressed lately regarding the rising premiums many will see as health plans adjust to the Affordable Care Act requirements in 2014.  The mandated changes require health plans to guarantee coverage, prohibit exclusions for pre-existing conditions, change the rating methodology for small groups, and include new taxes and fees, it also sets minimum limits to health plans. 

The minimum thresholds will include a requirement that all services covered under the plan have an actuarial value of at least 60%.   For small employers, health plans will have to include 10 categories of essential health benefits.  Plans will also be valued at 4 different “metal” levels with bronze plans at 60%, silver at 70%, gold at 80%, and platinum at 90%.  All non-grandfathered health plans in the small group market will have to qualify for one of these levels. 

In addition, deductibles are expected to be capped for small employer plans at $2,000 for single and $4,000 for family unless increasing the deductible is necessary to reach a metal level.  Small and large sized group health plans, which are not grandfathered, will also have a maximum out-of-pocket limit, which does not exceed the IRS limit for high deductible health plans.  These limits today are $6,250 for individual and $12,500 for family and will increase consistent with medical inflation.  All co-payments, deductibles, and coinsurance must apply to the maximum out-of-pocket limit for essential health benefits covered under the plan.

As many health plans increase in cost and their benefits are standardized, insurance carriers will look for alternate ways to provide affordable coverage and distinguish their offerings outside of the minimum requirements such as quality improvement services, wellness offerings, and with varying networks.  The coming years promise to be interesting as the market will demand new ways to control cost and deliver quality and affordable coverage.