Affordable Care Act(ACA)

Meaning & Definition

The Affordable Care Act (ACA) is a federal legislative initiative that provides individuals and businesses with an opportunity to obtain affordable health insurance coverage. Those eligible must have access to these benefits and offer health insurance coverage to their full-time employees per federal law. Additionally, the ACA establishes specific minimum requirements for all plans, including benefits offered as well as methods for submission and compliance with prescribed penalties.

Important features of the Affordable Care Act (ACA):

• Provides healthcare insurance for qualified staff members.
• Clarifies the duty of employers to provide healthcare benefits to their employees.
• Affects all HR practices, including compensation, benefits reporting, and benefits administration.
• Provides affordable access to healthcare insurance for employees.
• Serves as a benchmark of Best Practices for Global HR Benefit programs.

Compliance & Policy Considerations:

Because the Affordable Care Act is a US Federal law, it does not apply to India. Instead, there are separate laws which govern employees’ healthcare benefits in India:

• Employee’s healthcare benefits are determined only by the Company’s Policy.
• Under the Employees’ State Insurance Act, 1948, statutory coverage is provided to Employees as mandated by the Government Regulation.
• Therefore, many Indian companies also provide a Group Health Insurance plan as an option to their employees.

For companies located in India that conduct business in the USA, they need to provide employees based on ACA guidelines.