Marketplace Notice

The ACA mandates that employers subject to the Fair Labor Standards Act (FLSA) provide a notice to employees with information regarding their coverage options, including those available in the Marketplace, by October 1, 2013.  The ACA added section 18B to the Fair Labor Standards Act (FLSA) requiring all employers subject to the FLSA to send the Marketplace Notice. 

Employers must send or provide the Notice to all employees, regardless of whether or not they are eligible for or enrolled in coverage under an employer-sponsored health plan.  Therefore, employers must send or provide the Marketplace Notice to part-time, seasonal, or temporary employees in addition to sending or providing the Notice to full-time employees.  While the initial notification is required to be provided to all current employees by October 1, 2013, employers must also send or provide the notice to new employees hired after October 1, 2013 within 14 days of such employee's date of hire.

Pursuant to the Affordable Care Act (ACA), individuals and employees will be able to access health insurance coverage through a private health insurance market - the Health Insurance Marketplace - beginning on January 1, 2014.

Healthcare Reform

The Affordable Health Care Act, a health care law, was passed in 2010.  By 2014 several health reform provisions will come into effect.  Unfortunately, with so many unanswered questions and loopholes, healthcare reform continues to confuse and bewilder employers.  Hopefully the below will provide some guidance.

For fully insured employers with 51+ employees, 2012-2013 health reform provisions include:

1. Limit employee contributions to FSAs.  Starting in 2013, employee salary reduction contributions to health FSA's will be limited to $2,500 per plan year, with indexed increases allowed in future years to adjust for inflation.
2. Employers who file 250 or more employee W-2 forms will be required to report the cost of employee's health benefit coverage on the employee's 2012 W-2 forms that are distributed in January 2013.   This requirement is informational only and does not mean that employees will be taxed on these dollars.
3. Provide written notice about Health Benefit Exchanges (Exchanges).  In late summer or fall (future guidance is expected on complying with this notice requirement), employers must provide written notice to current employees, and going forward, new employees, to inform them of the Exchanges and the circumstances under which they may be eligible for health insurance subsidies.
4. Assess health plan offerings.  Employers should begin assessing their health plan offerings to determine whether they meet the minimum value requirements that will become effective in 2014.  If plans do not meet the requirements, employers will need to explore alternative plan options/or the impact of paying assessments.
5. Requirements for providing the Summary of Benefits and Coverage (SBC) to your employees.  On or after September 23, 2012, group health plans and health insurance issuers offering group or individual health insurance coverage are required to provide an SBC that accurately describes the benefit and coverage under the applicable plan or coverage. The final regulations require that the SBC be provided in several instances (upon application, by the first day of coverage if there are any changes, special enrollees, upon renewal, upon request and off-renewal changes.)

2014 Health Reform Provisions.  Although the below provisions will not become effective until 2014, it is important for employers to know what is coming and what action is required!

1. Offer Minimum Essential Coverage (MEC).  Employers will want to consider whether they need to make changes to the cost and quality of the coverage offered to avoid penalties that will apply if that coverage is considered unaffordable or low in value.  Beginning in 2014, employers with 50-plus full-time employees may be subject to a penalty if an employee receives a premium credit or cost-sharing subsidy. The penalty is calculated as follows:
1. Employers not offering coverage.  If an employer does not offer MEC and one or more full-time employees receive a premium credit or cost-sharing subsidy through the Exchange, the penalty is $2,000 per year per full-time worker.  When calculating the penalty, the first 30 full-time workers are subtracted from the payment calculation.
2. Employers Offering Coverage:  If an employer offers MEC and one or more full-time employee receives a premium credit or cost-sharing subsidy through the Exchange, the penalty is $3,000 per employee who receives a premium credit or cost sharing subsidy.
2. An employer-sponsored plan that satisfies the ACA's reform requirements must:
1. Be affordable to the employee (premium must not exceed 9.5 percent of household income.  The IRS, however, has issued a safe-harbor allowing employers to substitute the employee's W-2 income for household income).
2. Provide minimum value, which is at least 60% of the total allowed cost of benefits.

Update: Affordable Care Act

Federal Government Releases Proposed Rule on 90-day Waiting Period

On March 18, the federal government issued a proposed rule on the 90-day waiting period that would implement the 90-day waiting period limitation and make technical amendments to the Affordable Care Act's (ACA) health care coverage requirements.

Under the proposed rule, for plan years beginning on or after Jan. 1, 2014, employers that provide a group health plan or health insurance issuer offering group health insurance coverage cannot require an otherwise eligible employee (or dependent) to wait more than 90 days before coverage becomes effective.

The proposed rule also clarifies that any period before a late or special enrollment by an employee is not a waiting period.  The proposed conforming amendments make changes to existing requirements and other portability provisions that are either no longer applicable or need to be changed because of new market reform protections under ACA.

The proposed rule will be published in the Federal Register today, March 21st.  Comments will be due 60 days after publication.

Healthcare Reform

The majority of us are aware that there are a lot of changes pending in response to healthcare reform.  No one was making a move on the issue unless/until Obama was re-elected.  While the Affordable Care Act doesn't go into effective until 2014, with his re-election there is now increased activity and focus on the issue. In July of this year Governor Rick Perry announced that Texas would not establish or participate in a health care exchange.  That allows some of us "off the hook" with respect to a few requirements of ACA.

 

So, here we are.  Even before 2014, there are a few requirements that fall into place in 2013 that we need to be aware of.  These requirements include:

 

1. Summary of Benefits and Coverage (SBC) Statements.  All plans are to supply plan participants with SBCs and a glossary of commonly used terms during this year's open enrollment period.  Moving forward, firms that distribute SBCs to workers in a county where 10% or more of the population speaks the same non-English language need a "prominently displayed statement" in the non-English language about how workers can access the plan's language services.  In reviewing the "2012 Culturally and Linguistically Appropriate Services (CLAS) County Data, if your organization resides in Harris County you're looking at an 18% Spanish population.
2. W-2 Reporting.  Employers issuing 250 or more W-2 forms have to include the value of each individuals health plan benefits on their forms. 
3. Let's talk about the hidden "$64.00 per head" fee that employers may face in 2014.  It appears as though the fee will be based on the level of participation in your health plan.  The information is rather vague at this time as to how that fee is collected or its effective date.   The money from the fee will be pooled in an account managed by the HHS.  The funds will be used to reimburse insurance companies who end up covering a large share of individuals with pre-existing conditions.  The fee is expected to be phased out after 2016 - unless Congress votes to extend it - and will decrease very year.  In 2015 the fee is expected to drop to about $42 per participant per year and further decrease to $26 per participant in 2016. 

Keep your eyes on the healthcare reform issue - more changes could be around the bend!