Delay Doesn’t Really Mean DELAY

Some time has passed since the fireworks of the July announcement of a one-year delay in employer penalties under the employer responsibility section of 4980H. In that month, many employers may have assumed that this meant all is status quo regarding employer health coverage for 2014—no penalties means non-compliance is okay, right?

Not so fast. While the delay is certainly welcome news for employers, it does not mean that they can ignore the ACA or the critical decisions it calls upon employers to make.

To put it in the clearest terms: the ACA is the law of the land, despite the penalty delay, and a very substantial number of compliance and management issues that are impacted by the ACA remain. 2014 is going to be a busy and confusing year for all. Employers need to be aware, prepared, and in compliance as major mandates go into effect beginning in October, less than a month away.

Critical ACA Regulations Currently in Effect

1.  Benefit Mandates

a.  All non-grandfathered plans must continue to offer preventive care coverage, clinical trial services, provider nondiscrimination, and limits on out-of-pocket maximums.
b.  Maximum 90-day waiting period.
c.  No limits on pre-existing conditions or essential health benefits.
d.  Dependent coverage changed to age 26.
e.  Expansion of Wellness Incentives (30%, or up to 50% for smoking-related incentives).
f.   Limits on deductibles and out of pockets not to exceed the HSA-regulated amount.

2.  Summary of Benefits and Coverage

a.  SBCs must be made available and distributed during the Open Enrollment period for 2014 and must indicate whether the plan provides minimum value, as defined under the ACA.


3.  W-2 Reporting

a.  Employers must continue to report the aggregate value of employee’s health coverage on Form W-2 each year.


4. Fees

a.  PCORI: Patient-Centered Outcome Research Institute Fees must be paid by July 31 each year. For plans beginning after October 2013, the fee is $2 per member.
b.  Transitional Reinsurance Fee is $63/year or $5.25/month for each covered member that must be paid on or before January 15, first one in 2015.


5.  Exchange Notification

a.  Employers must distribute ACA-mandated Exchange notices by October 31, 2013, to all current employees and to each new employee within 14 days of hire.

6. Application for Advance Premium Credits

a.  All employers are required to fill out the appropriate section of a 12-page application for health coverage when requested by employees who are applying for ACA advance premium tax credits when purchasing coverage through an Exchange.

7.  Employer Mandate Determination

a.  All employers must assess their monthly eligible population to determine if they will be subject to the employer-mandate penalties that will begin in January 2015. Since clarification on a transition period is needed, it is highly recommended that all employers track hours for each employee, every month, beginning no later than January 1, 2014. If a 12-month measurement period is going to be used and there is no short counting period allowed, this count should have begun as early as August 2013!

While employers will avoid penalties for offering unaffordable plans or not offering coverage at all, it is wise to continue to track and forecast the future predicted penalty for non-compliance as well as any risk for discriminatory practice penalties.