Do you provide health insurance for your employees? If so, you should be familiar with your responsibilities under all applicable laws and regulations, which may vary depending on your company's size, location and the types of benefits offered by your employee health plan.
Small Business Series on Employee Benefits Part 2: From understanding the types of health plans and calculating costs to putting together an employee benefits package, this ongoing small business series explores a wide range of topics related to employee health insurance and benefits. To learn more, read the most recent post, Understanding the Different Types of Health Plans for Small Businesses.
Key Laws and Regulations
Affordable Care Act (ACA). Under the Affordable Care Act, Applicable Large Employers (ALEs) are required to offer health insurance plans to their full-time employees and their dependents. ALEs are employers with 50 or more full-time employees, including full-time equivalents (FTEs), during the prior calendar year.
Employee Benefits Security Administration (EBSA). The Department of Labor's Employee Benefits Security Administration (EBSA) oversees retirement, health and other workplace-related benefits for workers and their families.
EBSA develops regulations, helps educate workers, plans sponsors, fiduciaries, and service providers, and enforces certain laws related to health benefits. The agency provides general guidance on employer obligations and compliance under each law and regulation.
Children’s Health Insurance Program Reauthorization Act (CHIPRA). The Children's Health Insurance Program (CHIP) is a partnership between the federal and state governments that provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid.
Consolidated Omnibus Budget Reconciliation Act (COBRA). When group health coverage ends due to a qualifying event, COBRA gives workers and their families the option to continue group health plan coverage. Qualifying events include termination for any reason other than gross misconduct or reduction in the number of hours of employment. The law generally applies to all group health plans offered by private-sector employers with 20 or more full-time employees or by state or local governments. Under COBRA, employers and plans are also responsible for providing employees and their families with certain notices explaining their COBRA rights and when they may be eligible for continuation coverage.
Employee Retirement Income Security Act (ERISA). ERISA offers protection and creates standards for employees enrolled in retirement, health, and other benefit plans sponsored by private-sector employers, including rights to information, a claims and appeals process, and access to the benefits included in their plans. Among the responsibilities under ERISA, employers must provide workers with information about the features and funding of the plan. The U.S. Department of Labor (DOL) maintains a guide on employer obligations under ERISA for general reference.
Genetic Information Nondiscrimination Act. This federal law prohibits discrimination in group health plan premiums based on genetic information. In addition, under the Genetic Information Nondiscrimination Act, group health plans are prohibited from requesting genetic information or requiring genetic tests.
Health Insurance Portability and Accountability Act (HIPAA). HIPAA establishes national standards to protect patient health information from being disclosed without the patient’s consent or knowledge. The HIPAA Privacy Rule requires certain privacy safeguards and set limits and conditions on how the information is used and disclosed.
Mental Health Parity Act. Under the Mental Parity Act of 1996 (MHPA), financial requirements and treatment limitations for benefits related to mental health and substance use disorder must be consistent with medical and surgical benefits.
Michelle’s Law. Signed into federal law in 2009, Michelle’s Law oversees medical leave for college students. Under Michelle’s Law, college students are allowed to take up to 12 months of medical leave from both school and work. Under the Affordable Care Act (ACA), group health plans and issuers are generally required to provide dependent coverage to age 26 regardless of the student status of the dependent.
➡️➡️READ MORE: Understanding the Different Types of Health Plans for Small Businesses
Newborns’ and Mothers’ Health Protection Act (NMHPA). The Newborns' and Mothers' Health Protection Act of 1996 (NMHPA) is a federal law that affects the benefits of a hospital stay for a mother and newborn child.
Women’s Health and Cancer Rights Act (WHCRA). Signed into federal law in 1998, WHCRA provides protections for breast cancer patients who elect breast reconstruction in connection with a mastectomy. The law applies to group health plans and individual health insurance policies.
Additional Resources. Certain federal laws can affect health benefit coverage which may or may not apply to your company's health plan. The Department of Labor offers resources related to health benefits, including a set of interactive, online tools to help employers learn more about federal laws and their responsibilities.
Compliance Risks and Health Benefits
While it's not required, many employers choose to offer health insurance as a benefit to their workers and as a way to attract top talent. In a tight labor market, health insurance can be a deciding factor for job seekers. If you decide to provide group health insurance, it's important to seek legal guidance to understand which laws and regulations, both federal and state, apply to your business.
PLEASE NOTE: This information is for general reference purposes only. Please check with the appropriate organizations or government agencies for the latest information and consult your employment attorney and/or benefits advisor regarding your responsibilities. In addition, your company may be exempt from certain requirements and/or be subject to different requirements under the laws of your state. (Updated July 28, 2022)
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