Frequently Asked Questions
Is Affordable Benefit Choices an insurance company?
No. ABC is a consultant and designer of plans and services that allow employers to meet their obligations under the Patient Protection and Affordable Care Act (“ACA,” or “Obamacare”) by sponsoring self-insured plans. Under federal law, all companies have the right to self-insure and big companies almost always do, because self-insurance gives them better control and cost efficiency than traditional insurance carriers. ABC lets small and medium-sized companies take advantage of these same valuable benefits.
ABC also provides vendor management services, combining the right team of service providers for your plan that will ensure its smooth administration. ABC does not sell, negotiate, market, or assist in insurance transactions of any kind.
Self-insurance sounds complicated and risky. Is it?
Not with reinsurance, which many of our clients have elected and procured to cover 100% of any financial exposure to claims cost, and – because our plans are bundled with a package of vital services (including variable hour tracking to accurately and automatically determine employee eligibility, and IRS 1094/1095 reporting to comply with ACA requirements) – ABC plans are much easier to implement and support than a traditional employee benefits plan. HR departments love ABC!
What if my employees spend more on their health care than we thought they would?
Not your problem. Employers offering ABC plans who procure reinsurance that covers 100% of any financial exposure to claims are responsible only for their set monthly funding amounts. If total participant claims exceed the amount funded, a reinsurer covers the rest.
What if my employees spend less than we thought? Do I get a refund?
Generally, no, but this depends on the type of reinsurance procured for your plan. ABC can offer general information on these types of arrangements, but ABC does not sell, negotiate, or market insurance products and does not engage in specific transactions of insurance.
What is the relationship between ABC and WellMEC™?
WellMEC™ is the first self-insured ACA compliance plan designed by ABC Principal Alex Renfro, a leading benefits and ERISA attorney, in 2013. Because it was the only plan offered for several years, many people refer to our company simply as “WellMEC™.” Affordable Benefit Choices – ABC – was formed in 2016, when Alex created additional ACA compliance plans, including WellSHARE™, WellCHOICE™ and WellPLUS™. ABC continues to create and offer new branded plans and custom plans every year to employers around the United States.
What is “MEC”?
Something that very few people – including a lot of companies selling “MEC” plans – seem to understand. Minimum Essential Coverage is a standard established under ACA. Because the law is still very new (and in many aspects very confusing), regulators haven’t yet provided much guidance as to what is and isn’t ACA-compliant. This has provided an opportunity for some promoters to offer “solutions” that could be big problems for a company that buys them. ABC Principal Alex Renfro was a pioneer in the self-insured ACA compliance sector, and knows more about “MEC” than just about anyone. He wrote an entertaining article to help explain it, and it’s worth reading if you have time.
Can I just offer an ABC “MEC” plan to my employees and satisfy both employer mandates?
No. All ABC plans – including WellMEC™, the original ACA compliance solution created and patented by ABC Principal Alex Renfro in 2013 – must be offered in conjunction with WellMIN™, a fully ACA-compliant Minimum Value plan to satisfy both employer mandates. ABC believes that “MEC” plans” offered by themselves do not reliably satisfy key ACA requirements. WellMIN™ is therefore offered to all participants of electing applicable large employers.
What does “Minimum Value” mean? What is WellMIN™?
ACA has specific compliance requirements for group health plans. To be ACA compliant, a plan must cover at least 60% of “actuarial value” of a plan with “substantial coverage” of traditional major medical benefits. These include Physician & Emergency services, Hospitalization, and Prescription drug benefits. Employees who choose an employer-sponsored Minimum Value plan may not be required to contribute more than 9.66% of their gross pay toward the premium and/or program costs. WellMIN™ is a fully ACA-compliant Minimum Value plan that has been certified by independent member actuaries of the American Academy of Actuaries. The federal government considers licensed actuaries qualified to evaluate plans and certify that they meet all requirements.
What should I look at when comparing ACA-compliance programs?
Cost and features (such as eligibility tracking, IRS reporting, and availability of voluntary benefit plans) are obviously very important. But there are also some “red flags” that employers and their advisors should be on the lookout for:
- Does the program include an actuary-certified Minimum Value (MV) plan, which is offered to all eligible participants? (If not, it may not be compliant.)
- Does the plan designer stand behind its product? (All ABC plans come with an ACA compliance guarantee – if a sponsor ever gets fined or penalized due to any ABC plan defect, ABC pays – you don’t.)
- Does the plan require participation in a health indemnity product? (Plans which are subject to ACA – including “MEC” Plans – may not legally be coordinated with “excepted benefits,” including health indemnity plans. Combining participation requirements, obtaining both plans on a single contract, or improperly coordinating health indemnity coverage could all violate IRC § 9831-32, which leads to penalties of $100 per affected employee per day under IRC § 4980D – the so-called ACA “Death Penalty.”)
- Does the plan designer have a strong record of success in the ACA compliance market? (Since before the employer mandates, our programs have been successfully implemented and administered without any major changes to plan structure, coverage interruptions, claims payment issues, or other service problems common to some of our competitors. Failure to mail ID cards, unrecognized placement of reinsurance, and dubious structures are bad for our industry, and worse for employers who, as plan sponsors, must bear the brunt. We encourage you to ask around.)
What are the differences between WellMEC™, WellSHARE™, and WellCHOICE™?
All three plans provide identical coverage, as required under PHSA § 2713, for Wellness and Preventive Coverage. The only differences are in funding mechanisms. WellMEC™ is 100% employer-funded and participants are auto-enrolled (but may waive if they choose). WellSHARE™ monthly program costs are shared equally by employers and those employees who must voluntarily elect coverage. WellCHOICE™ is 100% funded by those employees who choose it. The other key difference is how the ABC guarantee applies. WellMEC™ is guaranteed against all penalties from plan design defects in connection with IRC § 4980H(a) & (b), as well as § 4980D. WellSHARE™ and WellCHOICE™ are guaranteed against § 4980H(a) & (b) penalties only.
Why aren’t WellSHARE™ and WellCHOICE™ fully guaranteed, like WellMEC™?
PHSA § 2713, which establishes mandatory Preventive and Wellness benefits under ACA, states that employees may not be required to share in the cost of these benefits. Like other aspects of ACA, lack of clarity in the law has resulted in varying interpretations in the marketplace. Some plan promoters insist that employees may be required to pay some (or all) of plan program costs, so long as the Preventive services themselves (such as annual physicals, mammograms, etc.) are then provided at no cost to employees. Others believe that the intent of ACA was to compel large employers to provide Preventive coverage to their employees at no cost whatsoever. Until this issue is resolved by regulators, ABC can only provide an absolute guarantee to those employers who choose WellMEC™, which is 100% employer-funded.
What are my options to provide something more than “MEC” coverage?
ABC has a number of branded plan designs at the “Copper” level of coverage, with an actuarial value slightly less than Bronze plan standards. These designs offer competitive benefits without the sponsor expense risks of Bronze and other traditional major medical plans (such as unlimited hospitalization, surgery, or specialty drug coverage). Our Copper plans are actuarially assessed to accurately rate risk and keep costs as low as possible. These plans include WellVisit™, WellValue™, WellPrime™, WellCare™, WellPlus™, and WellEssentials™. Custom plans are available as well.
In addition to ABC plans, other Voluntary Benefits (or “ancillary” or “excepted” benefits, as they are sometimes called) are available from our partner carriers, for use alongside our plans in an uncoordinated manner. Through these offers, employers can add benefits for their employees to elect and contribute from 0%-100% of the cost. Employees can also select from a wide array of options to build customized benefits packages that best fit their needs.
What is “Incela” and how does it relate to ABC?
Incela HR is a wholly owned unit which services all ABC plans from all aspects, including plan implementation, plan participant support, day to day needs, and issue resolution with other plan vendors. The Incela team are the master issue solvers to keep your plan running smoothly.
Why Puerto Rico?
ABC is a strategic business unit of Suffolk Administrative Services, LLC. Suffolk has a tax treaty with the Commonwealth of Puerto Rico (a US territory that by law establishes and enforces its own tax codes), one of many business advantages to being headquartered on this beautiful American island in the Caribbean. ABC is able to pass the many cost savings of creating and administering its plans in Puerto Rico to its mainland US clients.
Puerto Rico is also home to our fully bilingual staff, an incredible advantage for plan participant support, which is increasingly in need of Spanish-speaking services. We are able to communicate and produce ERISA plan documents in English and Spanish as a direct result of our dedicated team in Puerto Rico.
 WellMEC™ is guaranteed against all plan defects. WellCHOICE™ and WellSHARE™ are guaranteed against employer mandate penalties.