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Here you will find online tools that will help you understand and navigate the Affordable Care Act. In addition to online tools, Keenan consultants can personally assist your organization to make sure you are ready the new health care environment.

Health Care Reform Glossary

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Actuarial Value
The percentage of total average costs for covered benefits that a plan will cover.  For example, if a plan has an actuarial value of 70%, on average, the participant would be responsible for 30% of the costs of all covered benefits.

Administrative Period
An optional period no longer than 90 days that begins immediately after the end of a Standard or Initial Measurement Period and ends immediately before the start of the associated Stability Period.  The Administrative Period is intended to be used to perform any administrative tasks related to the Look-Back Measurement Method, such as evaluating the full-time status of employees and offering them coverage.

Advanced Premium Tax Credit
A Premium Tax Credit can reduce what an individual pays for health insurance bought through a public Health Insurance Marketplace or Exchange.  The amount of the credit varies based on the individual’s income as a percentage of the Federal Poverty Level.  Advanced payment of the Premium Tax Credit will lower the individual’s monthly health insurance bill.

Affordable Care Act or ACA or PPACA
The comprehensive health care reform law enacted in March 2010.  The law was enacted in two parts – the Patient Protection and Affordable Care Act was signed into law on March 23, 2010 (Pub. L. 111-148) and was amended by the Health Care and Education Reconciliation Act on March 30, 2010 (Pub. L. 111-152).  The name “Affordable Care Act” is used to refer to the final, amended version of the law.

Affordable Coverage
For purposes of the Employer Mandate, coverage is affordable if the employee’s required contribution for the lowest cost self-only coverage that provides Minimum Value is no more than 9.5% (indexed annually) of his or her Household Income.

For purposes of the Individual Mandate, coverage is affordable if the individual pays no more than 8% (indexed annually) of his or her Household Income towards the cost.

Allowed Charge
The discounted fees that insurers will recognize and pay for covered services.  Insurers negotiate these discounts with providers in their health plan network and network providers agree to accept the Allowed Charge as payment in full.  Each insurer has its own schedule of Allowed Charges.

Applicable Large Employer
For purposes of the Employer Mandate, an employer that employed on average at least 50 Full-Time Employees, including Full-Time Equivalent Employees and Seasonal Workers, during the preceding calendar year.

Assessable Payment
One of many terms used to refer to the tax under Internal Revenue Code (IRC) section 4980H that is imposed on Applicable Large Employers who do not offer Minimum Essential Coverage to their Full-Time Employees (and dependents) or who offer coverage that is unaffordable or that does not provide Minimum Value.  Other terms for this tax include the Pay or Play penalty, the Employer Mandate penalty or the tax under IRC section 4980H.

Balance Billing
When a provider bills for the difference between the provider’s charge and the Allowed Charge.  For example, if the provider’s charge is $100 and the allowed amount is $70, the provider may bill for the remaining $30.

Bronze Level Plan
Plans on the public Exchanges or Marketplaces generally fall into one of 4 categories – Bronze, Silver, Gold or Platinum — based on the percentage the plan pays for the overall cost of covered benefits.  A Bronze Level plan is designed to cover 60% of the full value of covered benefits.

Cadillac Tax
A 40% excise tax will be imposed, beginning in 2020, on the cost of coverage for health plans that exceed a certain annual limit.

Child
For purposes of Internal Revenue Code (IRC) section 105(b), a child (as defined in IRC section 152(f)(1)) includes a son, daughter, stepson or stepdaughter, an adopted child or eligible foster child of the employee.  However, the spouse of a child is not considered a child of the employee.  An eligible foster child is one who has been placed with the employee by an authorized placement agency or by judgment, decree or other order of any court of competent jurisdiction.

Coinsurance
The percentage of Allowed Charges for covered services that a participant is required to pay after the Deductible is met.  For example, a plan may cover 80% of the Allowed Charges for a covered hospitalization that leaves the participant responsible for the remaining 20%. This 20% is known as the Coinsurance.

Common Law Employee
Under common-law rules, anyone who performs services for an employer is the employer’s Common Law Employee if the employer can control what will be done and how it will be done even if the employee freedom of action.  What matters is that the employer has the right to control the details of how the services are performed.

Copayment
The flat dollar amount a participant must pay for a covered benefit. For example, a participant may have to pay a Copayment (e.g., $15) for each covered visit to a primary care doctor.

Cost-Sharing
The sharing of costs under a health plan between the plan and participant.  This term generally includes Copayments, Coinsurance and Deductibles but does not include premiums, Balance Billing amounts for out-of-network providers or the cost of non-covered services.

Deductible
Amount a participant must pay for covered care before the plan begins to pay.  For example, a plan with a $1,000 Deductible will not pay until the participant pays $1,000 out-of-pocket and satisfies the Deductible for covered services.

Discrimination Testing or Nondiscrimination Testing
Testing of coverage and participants under a plan to determine whether it satisfies the rules prohibiting discrimination in favor of Highly Compensated Employees.  The rules are complex and detailed but generally address eligibility for participation, timing of eligibility and equality of benefits in terms of coverage and cost.

Eligible Employer-Sponsored Plan
A Group Health Plan or group health insurance coverage offered by an employer to an employee that is:  (1) a governmental plan (within the meaning of section 2791(d)(8) of the Public Health Service Act), (2) any other plan or coverage offered in the Small or Large Group Markets within a State, (3) a self-insured Group Health Plan, or (4) a Grandfathered Plan offered in the group market.

Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income Security Act is a federal law setting minimum standards for most voluntarily established pension and health plans in the private sector to provide protection for individuals in these plans.  In general, ERISA does not cover group health plans established or maintained by governmental entities or churches for their employees.

Employer Shared Responsibility or Employer Mandate
Under Internal Revenue Code section 4980H, an Applicable Large Employer may be subject to a penalty if it fails to offer its Full-Time Employees, and their dependents, Minimum Essential Coverage that is Affordable and provides Minimum Value.

Essential Health Benefits
Set of ten categories of benefits that must be covered by certain plans as of January 1, 2014.  These plans must include items and services in the following categories:  (1) ambulatory patient services, (2) emergency services, (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder services, including behavioral health treatment, (6) prescription drugs, (7) rehabilitative and habilitative services and devices, (8) laboratory services, (9) preventive and wellness services and chronic disease management, and (10) pediatric services, including oral and vision care.

Essential Health Benefits Package
Non-Grandfathered Plans offered in the individual and small group markets, both on and off of the public Exchange, must offer a standard package of coverage that: (1) includes Essential Health Benefits, (2) limits Cost-Sharing, and (3) provides either Bronze, Silver, Gold or Platinum Level of coverage.

Exchange or Health Benefit Exchange
A governmental agency or nonprofit entity operated in each state and designed to create a more organized and competitive market for health insurance.

Federal Employees Health Benefit Program
A program providing health benefits to Federal employees, generally.

Federal Poverty Level (“FPL”)
An established minimum level of income a family needs for food, clothing, transportation, shelter and other necessities.  FPL is determined by the U.S. Department of Health and Human Services and is adjusted annually for inflation.  It is used to determine eligibility for certain programs and benefits.  For 2016, FPL is as follows:

Household Size

Annual Income

1

$11,880

2

$16,020

3

$20,160

4

$24,300

Filing Threshold
Amounts at which individuals begin to pay income tax.  For 2015, the individual threshold is $10,300 and the threshold for married filing jointly is $20,600.

Flexible Spending Account (FSA)
A tax-advantaged arrangement set up through an employer-established cafeteria plan that allows employees to set aside a portion of their earnings to pay for qualified medical or dependent care expenses.  Qualified medical expenses are defined by Internal Revenue Code section 213(d) but the employer may choose to limit coverage.

Full-Time Employee
For purposes of the Employer Mandate, a Full-Time Employee is one who averages at least 30 Hours of Service per week (or 130 Hours of Service per calendar month).

Full-Time Equivalent Employee
The number of Part-Time Employees and Seasonal Workers whose Hours of Service worked in a month are aggregated (but no more than 120 hours per employee) and divided by 120 to determine the number of Full-Time Employees they represent.

Gold Level Plan
Plans on the public Exchanges or Marketplaces generally fall into one of 4 categories – Bronze, Silver, Gold or Platinum — based on the percentage the plan pays for the overall cost of covered benefits.  A Gold Level plan is designed to cover 80% of the full value of covered benefits.

Grandfathered Health Plan
A plan that existed before the ACA was signed into law on March 23, 2010 and that is exempt from many, but not all, of the coverage requirements mandated under the ACA.

Group Health Plan
A Group Health Plan is an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement or otherwise.

HCERA
The Health Care and Education Reconciliation Act (Public Law 111-152) that was signed on March 30, 2010 and amended the Patient Protection and Affordable Care Act.

Health Cost Adjustment Percentage
For purposes of the Cadillac Tax, a potential one-time adjustment for 2020 may be made to the initial thresholds amounts of $10,200 for individual coverage and $27,500 for family coverage.  The adjustment is based on the Health Cost Adjustment Percentage, which is a percentage equal to 100% plus the excess, if any, of the percentage by which the per employee cost of coverage under the Blue Cross/Blue Shield standard benefit option under the Federal Employee Health Benefit Plan (FEHBP) for plan year 2018 (as determined using the benefit package for standard coverage for plan year 2010) exceeds the cost of FEHBP coverage for plan year 2010 that is over 55%.

Health Savings Account (HSA)
A tax advantaged savings account for individuals enrolled in a High Deductible Health Plan that is used to pay for qualified medical expenses.  Unlike a Flexible Spending Account, funds roll over year-to-year if not spent.  Qualified medical expenses are defined by Internal Revenue Code section 213(d) and employers have no power to limit coverage.

Health Reimbursement Arrangement (HRA)
An employer established and funded account that reimburses employees and retirees for qualified medical expenses.  Qualified medical expenses are defined by Internal Revenue Code section 213(d) but employer may choose to limit coverage.

Highly Compensated Employee
For purposes of Internal Revenue Code §105(h)(5), one of the five highest paid officers, a shareholder who owns more than 10% of the value of the employer’s stock or any employee who is in the highest paid 25%.

High Deductible Health Plan (HDHP)
A plan that features higher deductibles than traditional insurance plans.  HDHPs can be combined with an HSA or HRA to cover qualified out-of-pocket medical expenses on a pre-tax basis.

Hours of Service
For purposes of the Employer Mandate, the hours for which an employee is paid or entitled to payment for the performance of duties or for hours during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.

Household Income

An amount equal to the sum of the individual’s modified adjusted gross income (MAGI) plus the MAGI of any dependents who are required to file a tax return.

Individual Shared Responsibility or Individual Mandate
The requirement that everyone have Minimum Essential Coverage or otherwise pay a tax penalty under Internal Revenue Code section 5000A.

Initial Measurement Period
Under the Employer Mandate, a period of at least three but not more than 12 consecutive months that starts either on: (1) the New Employee’s Start Date or (2) the first day of the calendar month following the New Employee’s Start Date that is used for determining the employee’s full-time status under the Look-Back Measurement Method.

Internal Revenue Code Section 4980H
Section of the Internal Revenue Code added by the ACA that requires Applicable Large Employers to offer Minimum Essential Coverage that is Affordable and provides Minimum Value to their Full-Time Employees (and dependents) or otherwise pay a penalty.

Large Employer
For purposes of the ACA in general, a Large Employer is one that employed an average of at least 101 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.  However, States may define a Large Employer as one that employed an average of at least 51 employees.

Large Group Market
The health insurance market under which individuals obtain health insurance coverage on behalf of themselves and their dependents through a Group Health Plan maintained by a Large Employer.

Look-Back Measurement Method
The Look-Back Measurement Method is one of two available methods under the Employer Mandate for determining employees’ full-time status.  Under this method, an Applicable Large Employer identifies its Full-Time Employees by looking back over a Standard or Initial Measurement Period and counting the Hours of Service to determine whether an employee averaged at least 30 Hours of Service per week or 130 Hours of Service per month.  Based on the determination at the end of the Standard or Initial Measurement Period, the employee’s status is defined for a separate Stability Period that follows the associated measurement period.

Medical Loss Ratio (MLR)
The ACA establishes a minimum percentage of premium dollars that health insurance issuers must spend on medical claims, clinical services and quality improvement initiatives (80% for individual or small group plans and 85% for large group plans).  Issuers not meeting the minimum percentages must issue rebates for the difference to policyholders.

Minimum Essential Coverage
For purposes of the Employer Mandate, Minimum Essential Coverage is defined broadly to include any Eligible Employer-Sponsored Plan offered in either the Small or Large Group Market and includes Grandfathered Plans.

For purposes of the Individual Shared Responsibility provision, Minimum Essential Coverage includes:  (1) employer-sponsored coverage (including COBRA and retiree coverage), (2) coverage purchased in the individual market, including through the public Exchange, (3) a government plan such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE or veterans coverage, (4) student health coverage, (5) state high risk pool coverage and (6) coverage for AmeriCorp volunteers.

Minimum Value
An Eligible Employer-Sponsored plan provides Minimum Value only if the plan’s share of the Total Allowed Costs of Benefits provided to an employee is at least 60% and if the plan provides substantial coverage of inpatient hospital and physician services.

Modified Adjusted Gross Income
In general, Modified Adjusted Gross Income is the adjusted gross income plus any tax-exempt Social Security, interest or foreign income.

Monthly Measurement Method
The Monthly Measurement Method is one of two available methods under the Employer Shared Responsibility provision for determining employees’ full-time status.  Under the Monthly Measurement Method, an employee’s Hours of Service are totaled at the end of each calendar month to determine the employee’s full-time status for that calendar month.

Navigator Program
A program funded by the public Exchange in which various entities, such as community and consumer-focused nonprofits, perform outreach, education and enrollment assistance to consumers.

New Employee
Under the Look-Back Measurement Method, a New Employee is one who has been employed for less than one complete Standard Measurement Period.

Under the Monthly Measurement Method, a New Employee is one who either has not previously been employed by the employer or who was previously employed by the employer but is treated as a New Employee under the rehire and continuing employee rules.

Ongoing Employee
Under the Look-Back Measurement Method, an Ongoing Employee is one who has been employed for at least one complete Standard Measurement Period.

Open Enrollment Period
The annual period during which individuals and families can enroll in a health insurance plan.  Outside the Open Enrollment Period, individuals can enroll in a health insurance plan only if they qualify for a Special Enrollment Period due to certain life events, such as getting married, having a baby or losing other health coverage.

Out-of-Pocket Maximum
The maximum amount a participant will have to pay out-of-pocket for covered services in a plan year.  These costs include Deductibles, Coinsurance, and Copayments but not premiums, Balance Billing amounts for out-of-network services or costs for services not covered under the plan.

Part-Time Employee
For purposes of the Employer Mandate, a Part-Time Employee is a New Employee who the employer reasonably expects to average less than 30 Hours of Service per week during the Initial Measurement Period based on the facts and circumstances at the employee’s Start Date.

Pay or Play Penalty
One of many terms used to refer to the tax under Internal Revenue Code (IRC) section 4980H that is imposed on Applicable Large Employers who do not offer Minimum Essential Coverage to their Full-Time Employees (and dependents) or who offer coverage that is unaffordable or that does not provide Minimum Value.  Other terms for this tax include Assessable Payment, the Employer Mandate penalty or the tax under IRC section 4980H.

Platinum Level Plan
Plans on the public Exchanges or Marketplaces generally fall into one of 4 categories – Bronze, Silver, Gold or Platinum — based on the percentage the plan pays for the overall cost of covered benefits.  A Platinum Level plan is designed to cover 90% of the full value of covered benefits.

PPACA
The Patient Protection and Affordable Care Act (Public Law 111-148), which was signed into law on March 23, 2010.

Premium Tax Credit
A Premium Tax Credit can reduce what an individual pays for health insurance bought through a public Health Insurance Marketplace or Exchange.  The amount of the credit varies based on the individual’s income as a percentage of the Federal Poverty Level.

Preventive Services
Routine health care that includes screenings, check-ups and patient counseling to prevent illnesses, disease or other health problems.

Public Health Service Act (PHSA)
The Public Health Service Act is the combined Federal law encompassing COBRA plus certain provisions of HIPAA, the ACA and other Group Health Plan mandates.

Qualified Health Plan
Plans offered on the public Exchange are certified as Qualified Health Plans and must cover the ten categories of Essential Health Benefits and satisfy established limits on Cost-Sharing.

Seasonal Employee
For purposes of the Look-Back Measurement Method, a Seasonal Employee is one who is hired into a position for which the customary annual employment is 6 months or less.

Seasonal Worker
For purposes of determining whether an employer is an Applicable Large Employer, a Seasonal Worker is one who performs labor or provides services at certain seasons or periods of the year and, due to its nature, may not be continuous or carried on throughout the year.  For example, a Seasonal Worker would include a retail worker employed only for the holiday season.

Section 1411 Certification
The certification received by the employer that one of their employees enrolled in Exchange coverage and received a Premium Tax Credit or Cost-Sharing reduction for a calendar month.

Silver Level Plan
Plans on the public Exchanges or Marketplaces generally fall into one of 4 categories – Bronze, Silver, Gold or Platinum — based on the percentage the plan pays for the overall cost of covered benefits.  A Silver Level plan is designed to cover 70% of the full value of covered benefits.

Small Employer
For purposes of the ACA in general, a Small Employer is one that employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.  However, States may define a Small Employer as one that employed no more than 50 employees.

Small Group Market
The health insurance market under which individuals obtain health insurance coverage on behalf of themselves and their dependents through a Group Health Plan maintained by a Small Employer.

Special Enrollment Period
A time outside of the Open Enrollment Period during which an individual can sign up for health coverage.  On the public Exchange, individuals may qualify for a Special Enrollment Period 60 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other health coverage.  Employer-sponsored plans must provide a Special Enrollment Period of 30 days.

Stability Period
Under the Look-Back Measurement Method, a Stability Period is the period of time that immediately follows and is associated with a Standard Measurement or Initial Measurement Period.  The number of hours worked during the Standard or Initial Measurement Period determines if the employee is a Full-Time Employee for the duration of the associated Stability Period.

Standard Measurement Period
A period of at least three but not more than 12 consecutive months that an Applicable Large Employer uses to determine whether an Ongoing Employee is a Full-Time Employee under the Look-Back Measurement Method.

Start Date
Under the Monthly Measurement and Look-Back Measurement Methods, the first date on which an employee is required to be credited with an Hour of Service.

Total Allowed Costs of Benefits
The anticipated covered medical spending for Essential Health Benefits paid by a health plan for a standard population and determined in accordance with the plan’s Cost-Sharing.

Variable Hour Employee
Under the Look-Back Measurement Method, an employee who, based on the facts and circumstances at their Start Date, an employer cannot determine if the employee is reasonably expected to work an average of at least 30 Hours of Service per week during the Initial Measurement Period because the employee’s hours are variable or otherwise uncertain.