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5 critical dates for employers on ACA’s changes in employee benefit requirements

July 26, 2012
by Pamela Tabar, Associate Editor
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Employers have plenty to do in preparation for the upcoming changes in the employee healthcare benefit rules, according to the July 20 webinar, “How do LTC Providers Prepare for ACA Employer Healthcare Coverage Requirements?”

The presentation, hosted by AHCA-NCAL, featured Nancy Taylor, JD, co-chair, Health & FDA Business Practice at the global law firm Greenberg Traurig, LLC, and a 20-year veteran of healthcare legislation and regulatory issues.

Although many of the compliance deadlines aren’t until 2014, some of them start as early as this fall, says Taylor, who also serves as legal representation for AHCA.

Employer timeline

Now

This is the first year that employers must provide W-2 reporting on the total health insurance premium—showing the portion paid by the employer and the portion paid by the employee. “This was a policy decision by the Senate to inform employees about the total cost of their health coverage,” Taylor explains. “There’s a belief that if people understood the total cost, they might engage themselves in bringing down that cost.” Companies should seek assistance from tax advisors to ensure preparedness to report both sides of the benefit cost on the 2012 W-2, she adds. A detailed chart of employer-reportable coverages is on the IRS website.

Sept. 23, 2012

Mark this calendar date in neon. At the company’s next open enrollment period after Sept. 23, 2012, a host of new rules will activate, starting with the new Uniform Summary of Benefits. This ϋber-important, four-page document must be given to all employees who are eligible for employer-sponsored benefits. The Department of Labor has rules about whether the information can be disseminated electronically or not; be sure to check. If your company already offers a Summary Plan Document, the new Uniform Summary of Benefits must be added at the front of the document. An explanation of the summary of benefits and some template examples have been published in the Federal Register.

Jan. 1, 2013

Starting in 2013, annual Flexible Savings Account (FSA) contributions will be capped at $2,500.

Mar. 1, 2013

The potential impact of this date deserves serious strategic consideration at the corporate level, preferably before the end of 2012. Here’s why: On or before Mar. 1, 2013, all employers must inform their employees of the company’s overall strategy concerning health benefit coverage. Employers are required to tell employees about the availability of state exchanges, the availability of tax subsidies under Medicaid expansion and about the company’s intentions concerning health insurance coverage for its employees. In other words, the corporate decision on whether to “pay or play”—to add, change or drop employee benefits—needs to be made well in advance of March, so the proper materials can be prepared for employees.

“It’s important to start working with someone on these notice requirements,” Taylor says. “The good news is you have an opportunity to educate your employees. The bad news is that we have no guidance yet from the administration on how these notices are supposed to look.”

Jan. 1, 2014

Jan. 1, 2014 constitutes the deadline for compliance on the major employer-sponsored benefit plan rules and on the individual insurance mandate under the Affordable Care Act (ACA).

Employer-sponsored plans must accommodate these elements:

  • Employer must pay 60 percent of the benefit plan for full-time employees.
  • If you offer benefits for dependents, you must cover adult children until age 26.
  • Lifetime limits are no longer allowed; annual limits on essential benefits are no longer allowed.
  • Certain preventive services must be offered to the employee with no cost-sharing.
  • No limitations on pre-existing conditions allowed on dependent children age 19 and under.
  • Plans cannot be rescinded unless fraud is established.
  • New appeals process for denied claims

Individuals must have health insurance via one of these ways:

  • Private insurance
  • Employer-sponsored insurance
  • Medicare
  • Medicaid
  • State exchanges

 

The devilish details

When it comes to implementing the new rules for employee benefit plans, the devil is in the details, Taylor explains. Here are several areas where the exact circumstances of the company will dictate the best strategy for compliance:

On the Medicaid expansion and tax credits

Back in June, the U.S. Supreme Court upheld the Medicaid expansion portion of the ACA, although it struck down the constitutionality of its penalty provision. The split decision leaves some gray areas, Taylor says. “It creates a lot of questions about what the states are going to do, and how the government is going to encourage them to do the expansion.”

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