Last month the Biden Administration, in partnership with the Department of Health and Human Services, issued a final rule that streamlines ACA Medicaid enrollment as well as reduces barriers to receiving coverage through the federal and state marketplaces.
In light of the upcoming presidential election, the administration has proposed a change to the rule to demonstrate increasing support for ACA at a time when Trump, the leading Republican candidate, has sworn to roll back much of the law.
Under the new expansion, Biden has proposed an add-on that would enhance ACA insurance by adding dental coverage for the first time ever.
In this post, we’ll take a look at the new requirement and discuss its implications for both large and small employers.
ACA Coverage to Include Dental Benefits
The new regulation represents one of the first major changes made to the ACA since the law first passed in 2010. If passed as proposed, it would allow individual states to require health insurers to include select dental benefits through ACA marketplace plans.
While the new rule gives states the ability to establish their own dental coverage elections, it does not require them to do anything.
Suppose a state decides to label adult dental care as an essential health benefit (EHB). In that case, that state must ensure that the same rules under the ACA are followed for adult dental coverage, just as they would for other essential benefits.
It’s safe to assume that as a result of this non-requirement, conservative states will likely take little to no action, while more progressive-leaning states, like California, will embrace the decision to require insurers to cover dental benefits.
When Do Dental Benefits Take Effect?
States will be able to begin requiring health insurers to include dental procedures as part of ACA plans beginning in January 2027. However, states must indicate if they will be participating in the expansion, and update their elected essential dental benefits by May 2025.
These dental benefits include services such as standard cleanings, x-rays, fillings, and root canals.
The ACA Dental Impact
According to the CDC, “34 million school hours are lost each year because of unplanned (emergency) dental care, and over $45 billion in U.S. productivity is lost each year due to untreated dental disease.”
The expansion of ACA coverage to include dental benefits is expected to reduce barriers to obtaining essential oral care as well as the financial hardship it has imposed on Americans. A recent report from the Kaiser Family Foundation (KFF) finds that 57% of adults “have experienced owing money due to medical or dental bills at some point in the past five years.”
It follows that this plan would play a key role in reducing that debt and ensuring better oral hygiene going forward. The reason? When individuals have dental insurance, they’re more likely to use it.
Updates for Employers
The expansion of ACA coverage to include dental benefits is great for American consumers. Both small and large employers, however, will have a new set of requirements to comply with.
A notable change for small employers is the inclusion of dental benefits as Essential Health Benefits (EHBs) in their health plans. This means small employers will now need to cover the costs of dental benefits alongside other EHBs.
Large employers also have new responsibilities, namely the federal requirement to benchmark health plans with individual state plans to demonstrate compliance with the ACA’s lifetime dollar limits.
In essence, the added dental coverage requirement to state ACA marketplace plans may end up driving up the costs of employer-sponsored coverage.
A Potential for More ACA Penalties
In addition to the new plan benchmarking requirements, employers need to be aware of the fact that state ACA plans including dental benefits make them more attractive to consumers, and thus may garner greater ACA marketplace participation.
And greater ACA marketplace participation means more Premium Tax Credits (PTCs) issued . These PTCs are the trigger for the IRS assessing Letter 226J penalties for non-compliance with the ACA’s Employer Mandate.
The more attractive ACA marketplace plans, coupled with the final rule’s expanded special enrollment periods, will likely generate greater participation in state and federal health exchanges. Currently, a record high of over 45 million Americans have opted into ACA coverage.
In any case, employers should be wary of the potential for greater IRS scrutiny as a result of the expansion of ACA plans to include dental coverage.
Get Help with ACA Compliance
As a solution to prepare for the forthcoming changes to state health plans, employers will need to ensure they comply with the ACA and should consider offering more comprehensive health plans to encourage greater employer-sponsored healthcare enrollment.
Another option suggests partnering with a leading ACA-compliance software services provider, like Trusaic.
ACA Complete removes the burden of having to track employee enrollment in coverage, as well as establishing compliance with the ACA’s health coverage requirements by managing the process for you.
With a dedicated representative overseeing your account, you can feel confident you’re compliant with the healthcare law.
