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The objective with a hybrid approach is to minimize penalty exposure and to meet the
employees’ health benefits needs. Employers have the option to restructure or classify the
workforce based on the workforce demographics and select a combination of the benefits
designs to meet both business and workforce needs.
Hybrid Approach
Coverage
• Coverage options could range from employer sponsored benefits that meet
the minimum value and affordability requirements to exchange-based individual
coverage, depending on the options that the employer selects.
Compliance
• The employer will need to comply with all applicable federal and state laws and rules.
• The employer will need to comply with the new Affordable Care Act (ACA) benefit
mandates including metal levels and/or minimum value requirements.
• The employer needs to be aware of all the ACA compliance requirements, specifically
the benefit mandates, and grandfathering if applicable, that directly affect them.
• Employers must notify employees regarding the availability of the ·Health Insurance
Marketplace and subsidies that could help lower the cost of insurance coverage (by
October 1, 2013, and for all new employees at the time of employment).
Tax Credits
• Employers will not be eligible to receive tax credits.
• Employees may be eligible to receive tax credits through the Individual Exchange if
their employer’s coverage does not provide affordable, minimum value coverage.
Penalties
• Starting in 2015, employers with 100 or more full-time equivalent employees may
be subject to shared responsibility penalties if coverage either does not meet
affordability or minimum value requirements, and is offered to fewer than 70 percent
of its full-time employees and the dependents of those employees (unless the
employer qualifies for 2015 dependent coverage transition relief).
• In 2016, the 70 percent threshold is increased to 95 percent and the shared
responsibility penalties will also apply to employers with 50 or more full-time
equivalent employees.
Administration • Administration could range from the business’ current practices to using
Marketplace-based processes depending on the options selected by the employer.
• The employer will submit required reporting to the Internal Revenue Service starting
in 2016.
Employee
Tools and
Resources
• Employees may need to use resources provided by the employer, a private
marketplace or the Health Insurance Marketplace tools, depending on the employer’s
choice of plan options.
Supplemental
Insurance
Protection
• The employer can consider providing voluntary benefits regardless of the options
selected to help provide workers a comprehensive benefits package.
• These policies can be bought separately to help employees to cover out-of-pocket
costs associated with illness or injury.
Hybrid
Approach
