It's 2015. How ACA Compliant Are You?
It's hard to believe the Affordable Care Act (ACA) was enacted over four years ago! Many significant changes have taken effect, such as health plan design changes and increased wellness program incentives. But 2015 is the year we really need to sink our teeth into ACA compliance. Maybe you feel that you've heard enough about this already and you know what you need to know. Maybe you feel you will never get it so you tend to glaze over when you hear about it. Since the ACA is not going away and it has undergone some changes since its enactment, let's see where we are with this law today. But, instead of going on about the Employer Mandate, let's discuss some ACA requirements that are not talked about as much - some of which are actually in effect now.
If you haven't addressed the points covered here, you may need to do so immediately or face penalties. If you've done it all, then you know you can breathe more easily. If you are a HRi client, you can sleep soundly at night because we take care of ACA compliance requirements on your behalf. If can't bear to think about it, then you are more aware of the lesser known requirements, which can't hurt. Here are some of them:
Beginning in January 2013 for 2012, many employers were required to report the aggregate cost of health insurance coverage on their employees' W-2, so that employees know more about their healthcare costs. The benefits are not taxable to the employees. Penalties for non-compliance start at $30 per W-2, with a $1.5 million cap. This is a requirement you want to stay on top of (if you are subject to it). If you are an employer who issued fewer than 250 W-2s in 2012, you not only were not subject to this requirement in 2013, but you won't be until the IRS issues further guidance on the issue. The IRS has not yet done so and has yet to indicate when it intends to. In other words, if you have fewer than 250 employees, you remain exempt from this requirement indefinitely.
A similar requirement, often confused with the W-2 reporting, is the requirement to provide both the IRS and each "primary" insured a written statement of the prior year's coverage. Penalties are $100 per tax return up to $1.5 million. There is some relief if the failure to do so is due to "reasonable cause" or if the employer timely corrects it.
Changes to Waiting Periods
You can no longer require new employees to wait more than 90 days after he/she becomes eligible for coverage. Many assume that this means you must insure eligible employees as soon as they have been with you for 90 days. That is not necessarily true. The 90-day limit kicks in from the time the employee becomes eligible. You can condition eligibility on:
• the employee obtaining a specific license or certification
• completing an orientation period (which cannot be more than 30 days)
• completion of a specified number of hours (which cannot exceed 1,200)
If you invoke one of these three conditions, the 90 days begin to run once the employee meets one of these conditions. Theoretically you could make an employee complete 1,200 hours, which is 30 weeks based on a 40-hour workweek, and then wait 90 days before he/she is covered under your plan - this may not be your best option for attracting and retaining good talent though. However, invoking one of these three conditions could buy you more time if you need to do so.
Your plans must now have annual cost-sharing limitations for covered services. For individuals, the limit for 2015 is $6,600 and for families, the 2015 limit is $13,200. Maximums are set annually. Once the employee meets the applicable maximum by paying deductibles and co-pays, he/she is no longer obligated to pay anything else out-of-pocket for covered services, including prescriptions. Depending on your plan, this cap can increase your premium if you do not make other offsetting benefits changes. Out-of-network changes are not included in this limit, by the way.
Notification about the Healthcare Marketplace and Medicaid
Effective October 1, 2013, you must notify all existing employees – full-time and part-time of:
• the existence of the Health Marketplace
• possible premium assistance if:
o they are eligible for Medicaid for the Children's Health Insurance Program (CHIP)
o their state is involved in the Medicaid expansion program as options for obtaining coverage
New employees must be notified within 14 days of their hire date. The good news regarding notification about the Health Marketplace is that you do not have to write the notice yourself. You can use the template provided by the Department of Labor.
What if you don't do it? Contrary to the rumors there are no penalties for non-compliance. Here are reasons you should do it anyway:
• if you offer affordable coverage but your employee gets insurance through an exchange for lower premiums, or gets Medicaid, you don't pay for that employee's coverage. Additionally, you are not penalized, because you did what you were supposed to do.
• for minimal effort you helped foster more open, positive communication with your employees about an often confusing topic. Employees who feel taken care of are less likely to become disgruntled and file lawsuits, charges, or make calls to government agencies that trigger investigations later.
PCORI and Other Health Benefits Taxes and Fees
Most likely, you are already paying fees to the Patient Centered Outcomes Research Institute (PCORI). PCORI works with patients and healthcare providers to create healthcare systems around patients' preferences. The fee of $2.08 per member per year is based on the average number of lives covered by policies with plan years ending after October 1, 2012 and before October 1, 2019. Employers with self-funded insurance plans pay that fee directly. If you have a traditional (read: fully funded) plan, where you pay a set premium to an insurance carrier and the carrier pays the claims, your insurance carrier is paying it. In reality, your company is really the one paying it, because the insurance company can factor the fee into its determination of your premium. Additionally, companies with fully funded plans pay annual fees on health insurance carriers; all employers pay a transitional reinsurance program fee of $63 per member per year for all plans beginning January 1, 2014 and $43 per member per year for all plans beginning January 1, 2015. If you don't pay on time, penalties and interest accrue.
Well, that's it for today, folks. If you have any legal questions about the information in this post, we strongly suggest you consult with competent employment counsel; we are not employment lawyers and cannot give legal advice. However, if you have questions about how these issues may affect your current benefit offerings, please do not hesitate to call us!