Atlas Insurance Magazine Atlas Insurance Risk & Business Summer 2018 - Page 26

ACA AND THE PHCA BY: TINA LEGER AND STELLA CABANA, ATLAS INSURANCE AGENCY Don’t Overlook Compliance: Affordable Care Act On Hawaii Employers I f you are a small employer who has not given much thought to the Affordable Care Act (ACA) lately, you may be out of compliance with federal law. Many companies have mistakenly assumed that with the inauguration of President Trump, his repeated attempts to weaken the ACA, and the Republican tax bill passed in December, that complying with the ACA is not as important as it once was under President Obama. This is simply not true. The basic tenets of the ACA have not changed, including coverage requirements for individuals with pre-existing conditions, premium subsidies for lower-income earners, and expanded coverage through Medicaid. The only real difference is the removal of the individual mandate to purchase a health insurance policy at all. President Trump has chipped away at the ACA in other ways too, such as by expanding the availability of healthcare plans through outside associations, including targeted industry, trade, and business groups. When it comes to the ACA, however, Hawaii is in a slightly different situation than the mainland. Because we have to comply with our own state regulations under the Prepaid Health Care Act (PHCA), companies sometimes have to do a complicated juggling act to figure out whether they are in compliance with both sets of regulations. Although small employers with fewer than fifty employees are not subject to the ACA’s 26 Employer Mandate, they must comply with all laws that apply to the ACA’s Individual Mandate, which has created additional burdens for Hawaii’s small employers. Small employers must now provide medical and drug coverage to all employees, whereas only medical coverage was required prior to the ACA. Small employers are now also subject to Age-Rating versus the traditional 3-Tier model, which can negatively impact small businesses with a mature employee base. For employers with 50–100 employees, however, the situation becomes somewhat more complex. Each company must evaluate policies for compliance within both sets of regulations—state and federal. For example, eligibility under state law begins when employees work twenty hours per week, while under federal law, it begins at thirty hours per week. Therefore, in this case, the employer must follow state law. By contrast, state law only allows for $1 million of lifetime coverage, while federal law has no limitation. Here, federal law must be followed. These comparisons need to be made and coverage chosen for dozens of individual criteria. Many smaller companies cannot afford to hire employees whose sole function is monitoring compliance, so it’s easy for some requirements—such as regular distribution of notices and other information—to fall by the wayside. While larger companies may have compliance employees on staff, they must be extra vigilant since penalties are tied to revenues and can therefore escalate quickly. Hawaii is limited by its small insurance marketplace, so a comparison of various plans to ensure compliance with both the ACA and PHCA can be difficult. An insurance expert like Atlas can help navigate these waters, identifying policies compliant with both sets of laws, ensuring that contributions are accurate, making sure all federal notices are distributed timely, and assuming responsibility for all other compliance requirements. Visit us online at or call us at (808)-628-5320 to learn more about our benefits consulting services. + Tina Leger began her career in benefit consulting in 2004 and joined Atlas Insurance Agency in 2009 as a Senior Benefit Analyst. Tina works with small to large employer groups in a variety of industries, including nonprofit, hospitality, education, retail, restaurant, and transportation. Stella Cabana joined Atlas Insurance Agency as a Benefit Consultant in 2016. She is responsible for servicing clients in our small business market. Stella has over twenty years of experience in dental and healthcare insurance and corporate benefits. Prior to Atlas, Stella was an Account Executive at Hawaii Dental Service where she was responsible for new business sales, service, and retention of her client book of business.