Glossary

Individual Coverage Health Reimbursement Arrangement (ICHRA)

The Individual Coverage Health Reimbursement Arrangement (ICHRA) allows businesses of all sizes to offer employees a monthly allowance of tax-free money, allowing them to buy health care services that fit their unique needs while controlling costs for the employer. Not only does ICHRA provide flexibility in how much a business chooses to spend, but it also allows for different levels of contribution based on different employee classes. An employer decides what allowance each employee class will receive. Then, employees make their health care purchases, including insurance, and submit proof of their expenses. Within the allotted allowance amount, the company reimburses them for those expenses. It’s that easy!

Contributing Towards Your Premium

An insurance premium is the amount of money an individual or business must pay for an insurance policy. Company sponsored group insurance plans have the employer contributing at least 50% to their employee’s premiums (but generally around 80%). Employer premium contributions for employees and their dependents are 100% deductible as business expenses under federal and state tax law. This is true regardless of business type - sole proprietorship, partnership, LLC, corporation, etc. Companies with fewer than 25 employees may also be eligible for tax credits if they meet the ACA requirements for group sponsored plans.

Employee Classes

Within a business, employers have the ability to define unique reimbursement amounts and rules for different groups of employees. Some of these class segmentations are full time/part time, seasonal/non-seasonal, salaried/non-salaried, geographic rating, and coverage waiting periods.

Qualifying Life Event

A qualifying life event, also called a QLE, is a change in your life, either planned or unplanned, that has an impact on your insurance coverage. QLE’s allow for someone to enroll in their employer-sponsored plan or a healthcare marketplace plan outside of the open enrollment period.

COBRA Insurance

When you leave your job, whether voluntarily or not, there can be a sudden interruption to your health insurance coverage. However, losing your job is considered a qualifying life event, which means that you can either buy a new health insurance policy or take advantage of COBRA insurance to buy some more time for shopping and comparing providers. COBRA stands for Consolidated Omnibus Budget Reconciliation Act. It is a federal law allowing terminated employers to temporarily extend their employer health insurance coverage. However, because you no longer work for the company, your employer is no longer obligated to contribute to your premium costs, leaving many people to pay for full coverage.

Mini COBRA

Like federal COBRA, mini-COBRA laws require group health plans to offer continuing health coverage to qualifying individuals who would otherwise lose coverage due to a qualifying event. A key difference between them is that mini-COBRA laws are state-mandated and cover employers with fewer than 20 employees with a fully-insured group insurance policy. In a few states, 2-19 employees is the threshold. The mini-COBRA will define how long coverage will last, who is a beneficiary, what constitutes a QLE, and the max premium an employee will have to pay. You may have to comply with COBRA and mini-COBRA laws if your state has both, and you have more than 20 employees.

Please note: the plans being offered through the ASID Member Health Insurance Program are self-funded and not subject to mini-COBRA.

Special Enrollment Period

This defines a time outside the yearly Open Enrollment Period when you can sign up for health insurance. You qualify for a Special Enrollment Period if you’ve had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child, or if your household income is below a certain amount.

Major Medical Policies

When someone is discussing typical health insurance coverage, they are usually referring to major medical insurance. Major medical health insurance covers all the minimum essential benefits and meets the standards of the Affordable Care Act (ACA) for individual and family coverage. It often covers preventive care services, urgent care visits, emergency room visits, prescription medications, and other routine medical expenses.

Open Enrollment

Open Enrollment is the time of year you may enroll into an employer sponsored plan without a qualifying event. Open enrollment can be any month of the year for a company based on their plan year start date. 

For Individuals on the Marketplace, these are important dates to know:

• Nov 1: Open Enrollment starts for health coverage for the next plan year — first day you can enroll in, re-enroll in, or change health plans through the Health Insurance Marketplace. Coverage can start as soon as January 1.
• December 15: Last day to enroll in or change plans for coverage to start January 1.
• January 1: Coverage starts for those who enroll in or change plans by December 15 and pay their first premium.
• January 15: Open Enrollment ends — last day to enroll in or change health plans for the year. After this date, you can enroll in or change plans only if you qualify for a Special Enrollment Period.
• February 1: Coverage starts for those who enroll in or change plans December 16 through January 15 and pay their first premium.

The Affordable Care Act (ACA)

The Patient Protection and Affordable Care Act, or “ACA” for short, is a comprehensive health care reform law enacted in March 2010.
The law has 3 primary goals:

• Make affordable health insurance available to more people. The law provides consumers with subsidies (“premium tax credits”) that lower costs for households with incomes between 100% and 400% of the federal poverty level (FPL).
• Expand the Medicaid program to cover all adults with income below 138% of the FPL. Not all states have expanded their Medicaid programs.
• Support innovative medical care delivery methods designed to lower the costs of health care generally.

Premium Subsidy

Premium subsidy is a payment or reimbursement that helps people buy health insurance. It is a tax credit that can be taken upfront or claimed on a tax return. It reduces the cost of insurance for most people who enroll in the exchange/marketplace, where they can choose from different metal-level plans. Tax credits are not available to plans sold off the Marketplace.

Metal-level Plans

The Insurance Marketplace labels plans as either bronze, silver, gold, or platinum depending on how they are structured. With a lower metal plan like bronze, you’ll pay a lower monthly premium but have a higher deductible. A high metal plan like platinum will have a higher monthly premium, but a lower deductible.

Federal Poverty Level (FPL)

This is a measure of income issued every year by the Department of Health and Human Services (HHS). Federal poverty levels are used to determine your eligibility for certain programs and benefits, including savings on Marketplace health insurance through premium subsidies, and Medicaid and CHIP coverage.

Individual Mandate Provision

<p>The individual mandate provision requires most Americans to maintain health coverage. However, starting with the 2019 tax year, there is no longer a penalty for non-compliance with the individual mandate. Technically the law does still require most Americans to maintain health insurance coverage, but the IRS no longer imposes a penalty on people’s tax returns unless they're in a state that imposes its own penalty (New Jersey, DC, Massachusetts, Rhode Island, and California).</p>

Minimum Essential Coverage (MEC)

Any insurance plan that meets the Affordable Care Act individual mandate requirement for having health coverage. As of 2019, there is no longer a penalty for non-compliance with MEC plans. Examples of plans that qualify include Marketplace plans, job-based plans, Medicare, and Medicaid & CHIP.

Essential Health Benefits (EHB)

This refers to a set of ten coverage categories that must be included on all individual and small group health plans with effective dates of January 2014 or later. These ten services are ambulatory care, chronic disease management/care/prevention services, emergency services, hospitalization, laboratory services, maternity and newborn care, mental health/substance abuse treatment, pediatric services, prescription drugs, and rehabilitation/habilitation care. The ACA broadly defines the ten categories of coverage, but each state defines (via a benchmark plan) the specific services that must be covered under each EHB category.

Limited Partner

A limited partner, also known as a silent partner, is not a day-to-day manager of the business. The limited partner's liability cannot exceed the amount that they have invested in the business. A limited partnership (LP), by definition, has at least one general partner and one limited partner.