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Questions for Small Employers

I am a Small Employer who offers health insurance to my employees, how do I know if I am I eligible for a tax credit?

To reduce the cost of providing coverage, you may qualify for a small business tax credit that could be as high as 35 percent (up to 25 percent for non-profit employers) to help offset the cost of the insurance for tax years 2010 through 2013. The amount of the credit is on a sliding scale based off the size of your business. The fewer employees you have the larger the tax credit you may potentially be eligible for. If you did not owe tax during the year, you can carry the credit back or forward to other tax years. Non-profit employers who do not owe taxes can be refunded the amount of the credit.

To be eligible for this credit, you must:

  • Have less than 25 full-time equivalent employees;
  • Pay average annual wages below $50,000;
  • Provide health insurance;
  • Pay for at least 50 percent of the employee’s (not spouse or dependents) health insurance premium; and
  • Purchase the insurance through the Exchange.

Starting in 2014, the small business tax credit increases to a potential of up to 50 percent (35 percent for non-profit employers).

For more information about the tax credit visit http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers.

What do I need to know when purchasing Small Group Health Insurance?

Guaranteed Coverage
If you are a small employer with 50 or fewer employees, your business has a right to purchase health insurance from any insurer regardless of the health status of your employees or their dependents. This rule applies when you initially apply for small employer coverage and also if you decide to change plans. Health insurers must make available to you any small employer health plan that they market to other small employers in Nevada.

A health insurer must accept everyone in your group. Employees or dependents (if you offer dependent coverage) with health conditions cannot be excluded from coverage. Your insurance for the group (or for any member of the group) cannot be canceled because someone in your group becomes sick. This is called “guaranteed renewal.”

Dependent Coverage

Dependent coverage must be extended to adult dependents until they are 26 years old.

Coverage Changes Effective January 1, 2014
The majority of health insurance market reforms take effect starting January 1, 2014. These changes mostly affect plans with members who enrolled after March 23, 2010; these plans are often referred to as non-grandfathered plans. If you were enrolled in a plan prior to March 23, 2010, which has not significantly changed, this is referred to as a grandfathered plan. Many of the reforms will not affect your grandfathered coverage unless otherwise noted.

Pre-Existing Conditions Exclusions and Health Underwriting Prohibited
In the small group health insurance market, pre-existing condition exclusions and pricing based on the health of the employees will be prohibited starting January 1, 2014.

Essential Health Benefits
All non-grandfathered small group health insurance policies must include the Essential Health Benefits. Essential Health Benefits are a set of health care services that must be covered with no “annual or lifetime dollar limits.” These benefits may still have other limitations, such as a visit limit. These benefits include:

  • Ambulatory patient services;
  • Emergency services;
  • Hospitalization;
  • Maternity and newborn care;
  • Mental health and substance use disorder services, including behavioral health treatment;
  • Prescription drugs;
  • Rehabilitative and habilitative services and devices;
  • Laboratory services;
  • Preventive and wellness services and chronic disease management; and
  • Pediatric services, including oral and vision care.

Read more about Essential Health Benefits in Nevada.

Preventive Care Services

Preventive care services must be provided without any cost-sharing to the employee as long as the service is provided by a network provider. This means that a network provider cannot charge copays, deductibles or coinsurance to the covered person. These services include, but are not limited to:

  • Blood pressure, diabetes and cholesterol tests;
  • Many cancer screenings, including mammograms and colonoscopies;
  • Counseling on such topics as smoking cessation, weight loss, eating healthy, treating depression, and reducing alcohol use;
  • Regular well-baby and well-child visits from birth to age 21;
  • Routine vaccinations against diseases such as measles, polio and meningitis;
  • Counseling, screening and vaccines to ensure healthy pregnancies; and
  • Flu and Pneumonia shots.

Read more about Preventive Care Services.

For a complete list of preventive care services, please visit http://www.healthcare.gov/news/factsheets/2010/07/preventive-services-list.html or uspreventiveservicestaskforce.org  

I am a Small Employer; how can I purchase insurance coverage?

Again, as a small business you are guaranteed to be able to purchase coverage. You may wish to maintain the expertise and relationships that already exists with your licensed agent, broker or insurer and continue to utilize their services in the selection of health insurance for your employees.

Starting October 1, 2013, you may also utilize the Exchange, with or without the assistance of a licensed agent or broker to enroll in a health insurance plan for your business.

You are not required to purchase insurance through the Exchange.  

The Exchange will allow you to get quotes from multiple carriers at the same time. You will be able to select which plans to make available to your employees and determine the level of contribution you wish to make toward the employee’s share of the premium (the Exchange has a minimum requirement). This also means that the individual employee may be able to choose from a variety of plans in a cafeteria style. You will be able to write a single check to the Exchange for your contributions and they will be responsible for distributing the premium payments to the appropriate insurers.

Navigators and others professionals will be employed by the Exchange to provide guidance and assistance in the selection and purchase of health insurance. They will be certified by the Nevada Division of Insurance which will indicate that they have met the minimum competency requirements to perform these tasks.

Remember to always verify with the Nevada Division of Insurance that the person or company you are working with is licensed, certified or authorized to conduct business in this state. You can do this at doi.nv.gov or you can contact the Division in Northern Nevada at (775) 687-0700 and in Southern Nevada at (702) 486-4009.

I am a Small Employer with employees who live or work outside of Nevada, how does that affect my ability to purchase insurance for them?

If some of your employees live or work outside of Nevada, they may participate in your health insurance plan. However, depending on the plan selected, those employees may experience limited access to in-network providers and seek services from non-network providers. Whenever a service from a non-network provider is used, there may be additional costs to the employee in the form of deductibles, higher copays or coinsurance.

How will the Affordable Care Act affect my Association Plan?

Effective when your policy renews on or after January 1, 2014, the ACA will change the rules applicable to Association Health Plans. Traditionally these plans were offered to individuals and employers and allowed them to band together and purchase health insurance on a group basis; and gain the purchasing power enjoyed by a large group.

The ACA eliminated all exemptions for coverage sold by an association, including a bona fide association, by eliminating the requirement that only association members could purchase the coverage.

The law also mandates that a single loss pool exist for the individual market and separately for the small group market. This means that an association of small employers must be treated as a small group, and an association of individuals be treated as individual plans. Neither of these can be treated as a large group.