What is Affordable Care Act (ACA) compliance testing?

Testing for Affordable Care Act (ACA) compliance involves a comprehensive evaluation of various plan features and requirements to ensure that the health plan meets the standards set by the ACA. Here are steps to consider when testing for ACA compliance:

1. Coverage Requirements: Verify that the health plan provides essential health benefits, preventative care services, and meets minimum value and affordability standards for employer-sponsored plans.
2. Annual Limits: Ensure that the plan's coverage does not impose annual dollar limits on essential health benefits, as this is prohibited under the ACA.
3. Out-of-Pocket Maximums: Confirm that the plan's out-of-pocket maximums are within the limits set by the ACA to prevent excessive financial burden on participants
4. Dependent Coverage: Check if the plan offers dependent coverage up to age 26, as required by the ACA.
5. Preventive Services: Verify that the plan provides preventive services without cost-sharing, as mandated by the ACA. This includes vaccinations, screenings, and other preventive care services.
6. Prohibition of Pre-existing Condition Exclusions: Ensure that the plan does not impose pre-existing condition exclusions on any covered individuals, in accordance with the ACA.
7. Waiting Periods: Review waiting period policies to make sure they comply with ACA rules, which generally limit waiting periods to 90 days for employer-sponsored plans.
8. Employer Shared Responsibility (Employer Mandate): Determine if the employer meets the requirements for offering coverage to eligible employees and their dependents, particularly for applicable large employers.
9. Form 1095 Reporting: Confirm that the plan provides Form 1095-B or 1095-C to employees, as applicable, to report health coverage information to the IRS and individuals.
10. Affordability Calculations: Calculate the affordability of the employer's health coverage to ensure that it meets ACA affordability standards.
11. Summary of Benefits and Coverage (SBC): Ensure that the SBC is provided to participants and accurately reflects the plan's benefits and coverage details.
12. Wellness Programs: If the plan offers wellness programs, ensure that they comply with ACA rules, including permissible reward limits and reasonable alternatives.
13. Nondiscrimination Rules: Verify that the plan complies with ACA's nondiscrimination rules, which prevent discrimination in favor of highly compensated employees.
14. Essential Health Benefits: If applicable, confirm that the plan provides the essential health benefits required for individual and small group health insurance coverage.
15. Market Reforms: Review the plan's policies on annual and lifetime dollar limits, rescissions, and other market reforms to ensure compliance.

Testing for ACA compliance may require the involvement of legal counsel, benefits consultants, or specialized compliance professionals who are well-versed in ACA regulations. Regular audits and reviews of plan documents, processes, and communications can help identify any areas of non-compliance and ensure that the health plan adheres to the requirements set forth by the ACA.

For support in managing your fiduciary responsibilities, visit Fiduciary In A Box.

© 2023 Fiduciary In A Box, Inc. All rights reserved.