Employers would be complying with health care reform requirements of the Accountable Care Act (ACA) if they offered employees a plan with a $3,500 combined medical and drug deductible and a $6,000 cap on workers’ out-of-pocket costs.
That’s one of the ACA safe harbors the IRS has included in a proposed rule it published in the May 3
Federal Register. The plans described would cover 60% to 80% of an employee’s health care costs, which satisfies the 60% minimum that the reform law mandates.
Employers that fail to offer insurance covering at least 60% of costs can be penalized if only one of their workers elects to gets tax-subsidized coverage through the new exchanges created under the ACA.
Another allowable plan outlined in the proposal would require workers to pay up to a $4,500 combined medical and drug deductible, with the plan covering 70% of costs. The limit on employees’ out-of-pocket costs would be $6,400 and employers would make a $500 contribution to a health savings account.
A third safe harbor would require workers to pay a $3,500 medical deductible and plans would pay 60% of medical expenses. Instead of paying a deductible for prescription drugs, workers would pay 25% of drug costs through drug co-pays of $10 to $50 for three different tiers of drugs, and 75% co-insurance for specialty drugs.
The IRS also is offering a calculator to help employers figure out whether their insurance covers enough costs to meet the law’s requirements. If an employer wants to use a plan design that has unusual features and the value of the plan cannot be determined with the calculator, then the company should hire an actuary to do an analysis, the IRS says.