This SPONSORED POST was written by Greg Colen of Ultimate Benefits LLC (Morganville, NJ), a full-service benefits consulting/brokerage firm, operating since 2001. The company offers a complete line of plans, including group health, dental, vision, health savings accounts, and health reimbursement arrangements aimed at startup and small businesses. Greg Colen is a graduate of the University of Pennsylvania and can be contacted at firstname.lastname@example.org.
There is much media attention currently about Federal healthcare reform, and since I’m a NJ small business benefits broker, I get many questions from confused startup companies about the Law and what it means to small business employees. The basics of the Law can be found in its somewhat cumbersome name - the “Patient Protection and Affordable Care Act “(PPACA).
The aspect of PPACA related to “Patient Protection” is the end of the long-standing insurance practice of limiting coverage for “pre-existing conditions” – with PPACA, that practice will be over.
However, to head-off adverse selection (the tendency for people to only buy insurance when they need it), PPACA creates a new regulation – the “Individual Mandate” whereby everyone will need to get insurance (or pay a penalty). Also to limit adverse selection, there will be limited times when individuals will be able to enroll (so they don’t wait until it’s too late). In this manner, insurance regulators hope that insurance premiums will not spike due to adverse selection.
There is debate about the “Affordable Care” provisions of PPACA. For one thing, PPACA is largely a reform of our national health insurance (rather than our national health care), so how can it lead to more affordable care? One idea is a feature of PPACA that allows young adults to stay on their parents’ insurance until they turn 26 – to those fortunate young adults, PPACA makes care more affordable … but this is a limited benefit.
Another idea is a feature of PPACA which provides low-income consumers with government subsidies so they won’t pay the full amount of their health insurance premiums – those consumers may feel that they are getting more affordable care … but again this only benefits a subset of consumers. Finally, there is a feature of PPACA that eliminates co-pays for preventive care (such as annual physicals) - this is the feature widely believed to have influenced the PPACA name.
Over time, there have been changes to PPACA (and there are probably more to come), but it’s worthwhile to remember the goals of the Law to understand the attention it gets!