Who the SHOP Exchanges work – Part II- the Rules

Catastrophic High Deductible plans are only available for those under age 30, or who qualify for a hardship waiver.  Out of pocket maximums will be $6350 for a single, $12,700 for a family.  (NOTE- these maximums are delayed for some carriers and may not kick in until 2015)

NewBorn Children will be prorated to the date of birth on the next bill.  It is still the employees responsibility to log in, and let the plan know of the birth.  It must be done within 30 days or they cannot add the child.

COBRA- still the employers responsibility, and notice is still required, even though I imagine most employees will go to the exchange using a Special Election Period.

Husband and Wife- If the company is an S-Corp, a husband and wife will no longer count as two employees – this will affect alot of mom and pop businesses!  They will have to go to the individual exchange.

Income – To determine if you are eligible for the exchanges, you have to take your Modified Adjusted Gross Income, plus any foreign income, Tax-exempt interest, and Non-taxed social security.  Assets are not part of the calculation.

Premiums – are due on the first of the month for the month of coverage (ie, due October 1 for October).  There is a 3 month grace period on premiums.

Rates- Under the SHOP exchanges you will be able to make one, composite rate for your employees, instead of having different rates for each age group.  Age banding in the Federal Exchange states will be 0-20, 64+ and one year age bands for all the years in between.

Renewal- you will receive your renewal 90 days in advance.  All changes must be completed on the website no later than 15 days prior to the renewal date.

Smoking- If the employee admits to smoking they can be surcharged up to 50% above their normal rate.  They can join a smoking wellness program and avoid this surcharge.

Tax Credit for small business- If you have less than 25 Full Time Equivalent employees, contribute more than 50% of the single premium, and the average wage for all employees is under $50,000 – you can get a tax credit.