Is the Health Plan You’re Offering to You Clients ACA Compliant?
Understanding ACA Compliance: A Guide for Brokers and Employers
The Affordable Care Act (ACA) has shaped healthcare reform in the United States since lawmakers passed it in 2010. For brokers and employers navigating today’s complex health insurance landscape, understanding ACA compliance requirements remains essential.
Offering ACA-compliant plans helps meet federal regulations and delivers critical protections to insured individuals.
In this article, we’ll break down what defines an ACA-compliant plan and highlight three common pitfalls in non-compliant plans: annual maximums, medical underwriting, and insufficient preventive care coverage.
What Makes a Health Plan ACA-Compliant?
ACA-compliant health plans follow federal guidelines that ensure consumers receive affordable and comprehensive healthcare coverage. These plans must meet minimum essential standards outlined by the Affordable Care Act (ACA).
Key Features of ACA-Compliant Plans
✅ Essential Health Benefits (EHBs)
Every ACA-compliant plan must cover ten essential health benefits. These include hospital stays, prescription drugs, mental health services, maternity care, and preventive services.
✅ Pre-Existing Condition Coverage
Insurers must accept all applicants, regardless of health history. They cannot charge more for pre-existing conditions.
✅ No Coverage Caps
ACA plans cannot include annual or lifetime dollar limits on essential health benefits. This protects individuals from exhausting their coverage.
✅ Out-of-Pocket Maximums
Plans must cap what enrollees spend annually on deductibles, copayments, and coinsurance. Once you hit this limit, the plan covers 100% of covered services.
In addition to these features, ACA-compliant plans must meet actuarial value benchmarks. This ensures each plan covers a fair percentage of healthcare costs while keeping premiums within reach.
What Makes a Health Plan Non-Compliant?
Non-compliant plans may offer limited coverage or appear to save costs, but they often fail to meet the ACA’s critical protections.
Below are three key areas where non-compliant plans fall short:
1. Annual Maximums
Under the ACA, health insurance plans are prohibited from setting annual or lifetime dollar limits on coverage for essential health benefits. Additionally, non-compliant plans often cap the amount they will pay for covered care, leaving individuals responsible for the remainder.
For example, a plan with a $100,000 annual maximum could leave policyholders vulnerable to substantial financial burdens in the event of a serious illness or accident.
Moreover, these caps are particularly concerning for individuals who require expensive treatments, such as surgeries or ongoing care for chronic conditions. By contrast, ACA-compliant plans provide the peace of mind that essential benefits will be fully covered up to the annual out-of-pocket maximum.
2. Medical Underwriting and Pre-Existing Conditions
ACA regulations explicitly prohibit insurers from asking medical questions or using health history to determine eligibility or premiums. However, non-compliant plans often employ medical underwriting, which can exclude individuals with pre-existing conditions or charge them higher premiums.
Although, for brokers and employers, offering such plans could not only alienate potential enrollees but also lead to significant legal and reputational risks. ACA-compliant plans ensure equitable access for all, regardless of medical history, fostering trust and reliability in the coverage offered.
3. Lack of Coverage for Preventive Care
One of the ACA’s critical provisions is the requirement that all compliant plans cover preventive care services at no cost to the enrollee. These services include routine vaccinations, screenings for conditions such as diabetes and cancer, and annual wellness visits. Non-compliant plans often omit this coverage or impose additional costs, such as copays or deductibles, for preventive services.
Without access to free preventive care, individuals are less likely to seek regular check-ups or screenings, which can lead to undiagnosed health issues and higher medical costs in the long run. Offering ACA-compliant plans ensures employees receive necessary care to maintain their health, which benefits both employers and their workforce.
Why ACA Compliance Matters
For employers, offering ACA-compliant health plans is about more than meeting legal requirements; it’s about ensuring employees have access to meaningful, reliable healthcare coverage. Furthermore, non-compliant plans may seem attractive due to lower premiums or limited coverage options, but they often fail to protect employees when they need coverage the most.
Brokers play a crucial role in educating employers and clients about these distinctions, helping them select plans that align with their needs while prioritizing well-being.
At Enrollment First, Inc., we are committed to providing brokers with the tools and resources needed to navigate these complexities. Our team is here to support you in offering ACA-compliant plans that meet the needs of your clients while adhering to all federal requirements.
For more information or assistance, visit our broker portal or reach out to our support team. Together, we can ensure that your clients and their employees are covered with confidence.