Healthcare reform resources for agents & brokers

Whether you serve employers or individuals, the Affordable Care Act will impact your clients. Some provisions are already in effect. Dependent coverage, preventive care, appeals and external review, and pre-existing condition plans have been implemented. But changes due in 2014 may have the greatest impact.

Healthcare Reform Resources

Online Educational Webinars

Humana hosts webinars for small and large employers to offer education on the new requirements of healthcare reform and what you need to do to prepare for changes to your benefit programs.

Watch for upcoming webinars here and register in advance, or view our recently archived webinars on-demand.

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Learn what is happening around the country on Health Reform. View highlights from coast to coast.

Review the Affordable Care Act provisions

The regulations defining how these provisions will work and be implemented are still being determined by federal and state agencies. These changes though will considerably alter the existing healthcare system.

Humana is committed to supporting brokers by helping you understand the key changes and providing you with tools to guide your customers. For detailed information on what Humana is doing to implement and support our customers on these key provisions, see our Health Reform Timeline.

Comparative effectiveness fee

Employers sponsoring group health plans started paying $1 per participant in 2012. This fee increases in 2013 to $2 per participant. Thereafter the amount will be indexed to national health expenditures. This fee phases out by 2019. Revenue from the fee will fund research to determine the effectiveness of various types of medical treatments.

Comparative Effectiveness Fee – the basics (99+ employees): Watch video | Download PDF

Medicare and Medicaid-related provisions

To learn more, see Medicare Healthcare Reform

Plan D donut hole

There is a manufacturers’ discount of 50% on brand name drugs in the coverage gap in 2013 and 2014. In addition, Part D plans cover an additional 2.5% giving the member a total discount of 52.5%. Members will pay less for generic drugs as well, with a discount in the donut hole of 21% in 2013 and 28% in 2014 (up from 14% in 2012).

Retiree drug subsidy

Beginning in 2013, employers may no longer deduct the retiree drug subsidy when offering qualified coverage under Medicare Part D.


Beginning in 2014, states are required to provide premium assistance and wrap-around benefits to any Medicaid beneficiary who is offered employer-sponsored coverage when it is cost-effective to do so.


The National Association of Insurance Commissioners will create new model plans for benefit packages C and F that include nominal cost sharing. The new models will be available in 2015.

Employer reporting requirements

Employers with 250 or more W-2s must show employees the total cost of their group health benefit plan coverage on their W-2 forms starting with the 2012 tax reporting year.

In 2013 employers will be required to notify employees:

  • About the availability of the Exchange
  • They may be eligible for a subsidy under the Individual Exchange if the employer’s plan’s share of the total allowed cost of benefits provided is less than 60% of such costs
  • If the employee purchases coverage in the Individual Exchange, he or she will lose the employer’s coverage contribution

All employees need to be notified by later summer or early fall of 2013 based on a recent update from the U.S. Department of Labor (DOL). It is expected that DOL will issue future guidance on complying with this requirement.
In 2014, large employers will be subjected to expanded 5500 reporting requirements to include information on the health insurance coverage of their employees.

Flexible spending account contributions

Contributions to FSAs for medical expenses are limited to $2,500 a year.

Flexible Spending Accounts (FSAs) - the basics (all businesses): Watch video | Download PDF

Cost-sharing limits

For 2014, the out-of-pocket maximums are the same as the maximum out-of-pocket limits applicable to HSA-compatible high deductible health plans under IRS Code. The Small Group, Large Group and Self-funded maximum out-of-pocket limits can’t exceed $6,450 for single coverage and $12,900 for family coverage. For future years, the 2014 limits are increased by the premium adjustment percentage – the percentage increase in the average per capital premiums for health insurance coverage. These limits impact individual, small group and large group new business in 2014 and existing non-grandfathered business.

Essential benefits

Individual and small group plans offered inside/outside the exchange must provide the essential benefits package. The minimum benefit package applies to individual and small group new business in 2014 and non-grandfathered existing business. It includes: Ambulatory patient services, Emergency services, Hospitalization, Maternity and newborn care, Mental health & substance abuse, Prescription drug, Rehabilitative & habilitative services/devices, Lab services, Preventive/wellness, Disease management and Pediatric services including oral & vision care.

Guaranteed availability of insurance

Also known as "guaranteed issue," with this provision health insurers must accept every individual and employer who applies for coverage.

Guaranteed availability of insurance (guaranteed issue)

Health insurers must accept every individual and employer who applies for coverage.

Health insurance Exchanges

The act creates online marketplaces, or insurance Exchanges. It also creates Small Business Health Options Program (SHOP) Exchanges, administered by a governmental agency or non-profit organization. Individuals and small business with up to 100 employees can purchase health insurance on the Exchanges as of 2014. States can allow large employers to participate beginning in 2017.

Merged markets

States are allowed to merge the individual and small group markets if the state determines it is appropriate.

No annual limits on coverage

Annual limits on essential health benefits are prohibited. This does not apply to grandfathered individual plans.

Pre-existing conditions

Individual and group health plans can no longer impose pre-existing condition exclusions for any person of any age. This does not apply to grandfathered individual plans.

Rating restrictions

Rating restrictions go into effect for new individual and fully insured small group plans. Insurance companies cannot base premiums on health status, claims experience, or gender. Premiums can only vary by age, geography, family size, and tobacco use (no more than 1.5:1).

Adjusted Community Rating - the basics (1-99 employees): Watch video | Download PDF

Transitional reinsurance program

A temporary reinsurance program will be established for the individual market and funded by individual and group health plan assessments ($25 billion in total will be assessed between 2014 – 2016 on health insurers and employers with self-funded plans). This will provide payments to plans that cover high-risk individuals.

Transitional Reinsurance Fees - the basics (99+ employees): Watch video | Download PDF

Wellness programs

Employers can offer employees rewards of up to 30%, potentially increasing to 50%, of the cost of coverage for participating in a wellness program and meeting certain health-related standards.

Employer Shared Responsibility

PROVISION DELAYED. NOW Effective Jan. 1, 2015: Employers with 50 or more full-time employees or full-time equivalents will pay an assessment if they don’t offer adequate and affordable coverage. For more information, visit

The U.S. Treasury Department released final regulations on Employer Shared Responsibility in February 2014. It will take effect Jan. 1, 2015, for employers with 100 or more full-time or full-time equivalent employees. Employers with between 50 and 99 full-time employees (including full-time equivalents) are exempt from the Shared Responsibility penalty until 2016, if the employer provides an appropriate certification and meets certain conditions.

Beginning in 2015 for employers with 100 or more full-time employees (including full-time equivalent employees) and beginning in 2016 for employers with 50 or more full time employees (including full time equivalent employees) must offer coverage that meets the requirements below to full-time employees (those working 30 hours a week or more) and their dependent children or face potential penalties:
Meets the definition of minimum essential coverage (MEC)
Offers a plan that will pay for at least 60% of expected costs for an average person or family (this is 60% actuarial value, also known as minimum value)
Ensure that the coverage is affordable by limiting an employee’s share of the premium contribution to no more than 9.5% of the employee’s income for that employer
Make the coverage available to at least 70% of its full-time employees and their dependent children in 2015; this will increase to 95% in 2016

How do you know if you meet the requirements?

Minimum essential coverage (MEC) is defined by the ACA as an employer-sponsored plan offered in a state (including a self-funded plan) or health coverage provided by the government. However, a plan consisting solely of “excepted benefits” such as stand-alone dental coverage is not MEC. Since you are offering a group health plan through Humana or a self-funded plan for which Humana is the administrator, the MEC requirement is satisfied.
Minimum value: All of Humana’s standard plans meet the minimum value requirement.
Affordability*: There are three safe harbor methods for determining affordability:
9.5% of an employee’s W-2 wages (not reduced for salary reductions under a 401(k) plan or cafeteria plan)
9.5% of an employee’s monthly wages (hourly rate x 130 hours per month)
9.5% of the Federal Poverty Level for a single individual

What are the penalties for not meeting the requirements?

If an employer does not offer minimum essential coverage for any calendar month, and any full-time employee obtains a premium subsidy or cost-sharing reduction through the Federal Marketplace or a state-based exchange, the penalty will be $2,000 per year multiplied by the number of full-time employees for each calendar month of the year, minus the first 80 full-time employees (this number decreases to 30 in 2016). If an employer offers minimum essential coverage but it doesn’t meet the minimum value or affordability guidelines and any full-time employee obtains a subsidy or cost-sharing reduction through the Federal Marketplace or a state-based exchange, the penalty will be the lessor of $3,000 per each full-time employee certified as eligible to receive a premium tax credit or cost-sharing subsidy or $2,000 per year for each full-time employee, minus the first 80 employees (this number decreases to 30 in 2016). This penalty will be calculated calendar month to calendar month.

What is the compliance date?

For employers with a plan year on a calendar year basis, it is 1/1/15. Whether an employer needs to comply as of 1/1/15 or on its plan year date (for those with non-calendar year plan years), depends on whether it qualifies for transition relief that would enable a delay until the plan year date. For more information, consult the final rule posted here.

Non-discrimination rules for employers

The non-discrimination rules that currently apply to self-funded health plans are expanded to group fully insured health plans. Plans cannot base an employee's eligibility or continued eligibility for coverage on hourly or annual salary. Employer-provided insurance may not discriminate between employees. This will prevent employers from providing enhanced insurance benefits based on an employee's length of service. Under the new rules, plans may be subject to penalties of up to $100 per enrollee per day for violating the requirements.

Note: HHS has delayed application of the non-discrimination rules to fully insured health plans until additional regulations or other guidance are issued. The recent guidance makes clear that the Treasury Department will not apply the penalties until additional guidance or rules are issued on the nondiscrimination requirements.

Healthcare Reform eBook (1-99 employees): Download PDF
Healthcare Reform eBook (99+ employees): Download PDF

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