Friday, July 5, 2013

What Does the Delay of the Employer Mandate Mean for Employers?

This relief means that employers have an additional year before they have to do the following:
  1. Determine whether they employ at least 50 full-time equivalent employees and are subject to the Play or Pay rules.
  2. Classify employees who work at least 30 hours a week/130 hours a month as full-time for health plan benefit purposes.
  3. Adopt measurement/stability periods to track hours for variable hour, part-time, and seasonal employees.
  4. Offer minimum essential coverage to 95% of their employees who work at least 30 hours a week and their dependents or risk paying a penalty.
  5. Determine whether their health plan will meet the affordability standards of the ACA.
  6. Adopt reporting systems so that they can comply with the requirements of the law.

Despite the relief to employers provided by [the] announcement, the remaining requirements of the Affordable Care Act, including the individual mandate, still go into effect Jan. 1, 2014, unless the Treasury issues further guidance. Individuals are supposed to be able to purchase coverage on state exchanges during open enrollment starting in October 2013. 

Individual subsidies will presumably still be available, even though they are tied to whether the individual was offered affordable employer-paid coverage. In light of the reported delay in many states to set-up insurance exchanges where individuals can purchase health care coverage and the fact that many employees are not eligible for coverage under their employers’ health plans, it remains to be seen if the Obama administration will provide any relief regarding the individual mandate and the implementation of state exchanges.

The following requirements of the Affordable Care Act for employers are still in effect for 2014:

  1. Exchange Notices – Employers are required to provide notices by Oct. 1, 2013, to employees that describe coverage that is available on the state exchange. See Technical Release 2013-02 for model notices or the Department of Labor’s Affordable Care Act page.
  2. Patient-Centered Outcomes Research Institute fees – Employers are required to pay the PCORI fee by July 31, 2013, for calendar year plans and to report it on the Form 720.
  3. Summary of Benefits Coverage – Employers must provide all employees with a Summary of Benefits Coverage that describes a number of elements of the health plan to employees at enrollment. The Departments issued a revised SBC template to be used for coverage beginning on or after January 1, 2014, together with FAQs that address issues related to the new template.
  4. 90 day waiting period – Employers are required to enroll employees in their employer-sponsored health plan within 90 days of the employee becoming eligible to participate in the plan.
  5. W-2 Reporting – Employers who issued at least 250 W-2s in 2012 are required to report the value of employer-provided health insurance coverage on W-2s issued for 2013.
  6. Transitional Reinsurance Fee – Employers who sponsor self-funded health plans are required to pay a transitional reinsurance feefor 2014, 2015, and 2016.
  7. Compliance with final regulations relating to wellness plans for plan years beginning on or after Jan. 1, 2014.