ACA Compliance Requirements

Jump to:

• What Is ACA Compliance?
• What Companies Should Be ACA Compliant?
• What Is Required in ACA Compliance?

Healthcare and insurance are essential for Americans, allowing them to receive necessary treatments and prescriptions. The passage of the Affordable Care Act (ACA) transformed many healthcare requirements, from more accessibility to lower premium costs.

However, the ACA also brought in new compliance regulations. Understanding the new compliance standards and how they affect insurance plans is critical, but ACA compliance requirements can vary by insurance type, making it a challenge to keep up with every regulation.

Learn more about ACA compliance requirements and how you can stay compliant.

What Is ACA Compliance?

ACA compliance refers to healthcare plans that comply with the Affordable Care Act (ACA). Also known as Obamacare, the ACA was passed in 2010 to increase healthcare coverage. The law had these three goals:

• Increase access to affordable health insurance.
• Expand the Medicaid program.
• Implement medical care delivery methods.

Overall, the ACA was a massive reform for health insurance plans in America. The act aimed to improve access, coverage and affordability of most health insurance types across the country. These are examples of some of its updates:

• Health insurance exchanges: The ACA created health insurance exchanges. In these marketplaces, individuals and families can buy guaranteed issue qualified health insurance plans. A guaranteed issue plan means that issuers must offer products to all eligible individuals in the state. If an individual applies and meets all the eligibility requirements, the issuer must provide them with insurance.
• Updated issue coverage: The law also updated guaranteed issue requirements. It prevents issuers from refusing coverage or charging higher premiums due to pre-existing conditions.
• Premium subsidies: The ACA also offers subsidies for low- and middle-income purchasers. These subsidies can lower overall costs and make it easier for enrollees to afford coverage.
• Coverage for essential health benefits: ACA-compliant plans must cover 10 essential health benefits. To comply with the ACA, health insurance plans must provide coverage for each element, from ambulance services to pregnancy care.

An ACA-compliant health insurance plan abides by all the new changes set in the ACA. All new insurance plans purchased after January 1, 2014, must be ACA-compliant. This law applies to both individual and group insurance plans. In other words, all plans after this date must reflect the changes passed by the Affordable Care Act.

What Companies Should Be ACA Compliant?

All companies offering insurance plans after January 1, 2014, must be ACA compliant. The coverage specifics depend on the type of insurance and health plan enrollees’ purchase. For instance, all companies with 50 or more employees must offer health insurance for their workers, but those with fewer than 50 aren’t required to.

Another differentiation with ACA compliance is with grandmothered or grandfathered plans. These healthcare plans took effect before 2014 and are subject to different compliance requirements.

Here is a closer look at these types of plans and their ACA requirements:

• Grandmothered plans: These plans are also called transitional plans. They were created in the transitional period between 2010 and 2014, after the ACA had been signed into law but before it was in effect. Grandmothered plans must abide by some aspects of the ACA, such as the ban on lifetime maximums and coverage of essential health benefits. However, the rest of their coverage policies can stay the same as before 2014.
• Grandfathered plans: Grandfathered plans were active before March 23, 2010. Similar to grandmothered plans, they can use their previous structures as long as they abide by some crucial ACA updates. They can remain in place indefinitely as long as providers don’t make significant changes.

What Is Required in ACA Compliance?

While most health insurance plans must be ACA-compliant, the specifics of compliance vary. Here is an overview of the different types of health insurance types and ACA compliance requirements:

Individual and Family Coverage

Individual or family coverage plans are policies people purchase independently and not through their employer. For instance, an enrollee might buy a health insurance plan directly from a health insurance company rather than enroll through their worksite.

To comply with the ACA, individual plans must follow the outlined changes in the law. For example, all plans must feature:

• Guaranteed issue to eligible applicants.
• Coverage for pre-existing conditions.
• Coverage for all essential health benefits.
• No lifetime coverage maximum.

Small Group Coverage

The term “small group” refers to an employer or company that purchases health insurance for their employees. Businesses with 50 or fewer full-time employees are considered small groups. They are also required to comply with ACA requirements.

Small group requirements are very similar to the regulations for individual and family plans, including:

• Guaranteed issue to eligible businesses.
• Pre-existing conditions coverage.
• No annual or lifetime limits.
• All 10 essential health benefits covered.

Large Group Coverage

Employers with 51 or more full-time employees are considered large groups. The requirements for ACA compliance differ slightly for large group coverage. Many large group companies also choose self-insured plans, which can also follow large group rules.

ACA requirements for large groups include:

• Mandated employee coverage: All employers with 50 or more full-time employees must offer health insurance to each employee. According to the Internal Revenue Service (IRS), a full-time employee is any worker who averages 30 hours or more of work each week.
• Year-round guaranteed issue: Businesses can purchase plans year-round, allowing employees to enroll whenever necessary.
• Coverage for minimum value: Large group insurance plans must cover a minimum value of at least 60% of average healthcare costs for each enrollee.
• Coverage for preventative care costs: Unlike small group and individual plans, large group plans don’t need to cover all essential health benefits. However, large group plans must cover certain preventative care costs, such as cancer prevention or infectious disease prevention measures.

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Healthcare companies must stay compliant with ACA regulations.  If you have questions and concerns, use the form below to connect with one of our healthcare leaders today.