Employers determine value from health plans through the health care reform law. The reform has ways, which ensures that the coverage for the employer health plan has minimal value. In 2014, the PPACA will grant permission to the individuals who have the health insurance so that they can receive the premium tax credit. They can benefit more if they are eligible to have affordable employer coverage that contains a minimal value (Ilyse, Littler 2012) . There are three approaches that determines the minimal value contribution and the first one is an array of design based-safe harbors formed as a checklist that has an easy and straightforward way that ensures the employer sponsored plans contain the minimal value without making calculations.
The other approach is the actuarial value calculator (AV) or the minimal value calculator (MV) that will be assessed in the treasury. The calculator will grant the employer-sponsored plan to store information about the benefits of the plan, the cost sharing terms that checks whether the plan will have a minimum value. The third approach is for plans with nonstandard features that use the MV and AV calculator without any adjustment. The employer-sponsored plan that gives value is when the actuarial value is above the 60 percent mark. Individuals with small business in order to make the minimal value they have to follow rules that a bid with the actuarial value which is under the 1302 (d) in the affordable care act.
The second section in the act states that every individual that receives health insurance should provide reports on the annual returns. According to the IRC, it causes the employers to show reports on the returns it gets (Arnett 1999). In the report, they should indicate the number of employees they have and show the number of people who are receiving health care coverage. This ensures that both the employer and employee receive a minimum value for the health care coverage.
What type of criteria and information can be used to determine value of health care premiums?
The medical loss ratio criteria will ensure that employers and consumers get their money’s worth in health insurance. Previously the insurance companies did not take enough measures to ensure that the people get more value from their premium dollars, especially on health care. The affordable care act that was enacted has made the insurance companies give more value to the consumers for they will be required to provide 80 percent of their premium dollars to the health care facilities. This policy was implemented and named as the medical loss ratio.
There are various ways in which the new act will help consumers and employers increase their premium dollar values. The first is that the insurance companies are required by law to show their report on how they spend the money (Kongstvedt 2001). This will help consumers be aware of how their premium dollar is spent in the fields of medical care and the administrative sector. The second is that when the insurance companies do not follow the new rules they will have to rebates the consumers. The rebates are supposed to be paid at the beginning of august annually. The rebate provided by consumers or employers should be the same premium amount they paid to the insurer.
Work cited
Arnett, G. M. (1999). Empowering Health Care Consumers Through Tax Reform. Michigan: The University of Michigan.
Ilyse S., Littler. M. (2012). Guidance Issued for Determining Health Plans’ Minimum Value . Society for human resource management .
Kongstvedt, P. R. (2001). The managed health care handbook. Maryland: An Asspen publication.
Medical Loss Ratio: Getting Your Money's Worth on Health Insurance. (2013). Health Care. Gov .
