ACA, PPACA or Obamacare? Confused? What is this all about?
We’ve all heard the acronyms or terms. We may not know what each stands for, but it is something we all need to pay close attention to.
The Affordable Care Act (ACA), Patient Protection Affordable Care Act (PPACA), or “Obamacare,” is reshaping the benefits world. The law is so vast and has so many provisions written into it, and employers are struggling to stay on top. With more than 20,000 pages of regulations, it’s no wonder this is happening. Implementing the provisions of the ACA is extremely complex compared to almost any other piece of legislation ever written before.
The primary goal of the ACA is to reduce the number of uninsured Americans. Under the provisions of the law, any employer with 50 or more full-time or full-time equivalent employees must choose between providing affordable health insurance coverage to qualifying employees or pay a penalty. All of the provisions of the ACA are to go into effect on Jan. 1.
However, because of the vehement complaints from employer groups about the administrative burden of reporting requirements, as well as the confusion over the provisions of the law, the Obama Administration has postponed the Affordable Care Act employer mandate penalties for one year, until Jan. 1, 2015. The Department of the Treasury announced the delay on July 2, along with a similar delay for information reporting by employers, health insurance issuers and self-funded plan sponsors.
Even though this news may cause you to breathe a sigh of relief, realize there are some provisions that have not been postponed – and are still scheduled to go into effect at the start of the 2014 plan year with penalties of up to $100 per person, per day for non-compliance.
Employers designing a health plan must include the following provisions:
» Waiting periods cannot be more than 90 days from the date the employee becomes eligible.
» All pre-existing condition limitations must be removed.
» Out-of-pocket maximum: Individual $6,350, family $12,700.
» Essential health benefits may not have annual dollar limits. Essential health benefits must include items and services within at least the following 10 categories: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services including behavioral health treatment, prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services/chronic disease management, and pediatric services, including oral and vision care.
» Grandfathered plans must cover dependent children to age 26 (even if a child has access to employer-provided coverage).
» The new wellness program requirements still apply.
For small employer insurance plans, or those with 49 or fewer employees (whether in or out of exchange/marketplace):
• Coverage must include essential health benefits at bronze, silver, gold or platinum level.
• Maximum deductible: Individual $2,000, family $4,000.
• Modified community rating (rating classes limited to age, tobacco use, family size and geographic area) applies.
• Guaranteed issue applies.
• Guaranteed renewal (with some limitations) applies.
Employers must also meet these ACA requirements for 2014:
» PCORI (Patient-Centered Outcome Research Institute) fee: There was a July 31 deadline for reporting and payment of fees for plans that ended Oct. 1, 2012 to Dec. 31, 2012. Employers sponsoring certain group health plans must pay a fee of $1 per covered life per year.
» MLR (medical loss ratio) rebates: Timely distribution of any MLR rebates the plan may receive.
» Summary of Benefits & Coverage (SBC): Must be provided as part of open enrollment.
» DOL notice distribution: Department of Labor notice regarding exchange should have been distributed by Oct. 1, 2013.
» W-2 reporting: Must report health care costs on W-2 (with exemption for employers that issued fewer than 250 W-2s in the prior year or that contribute to a multiple employer plan continues for 2013 W-2).
» Transitional reinsurance fee: Due in January 2015.
Employers will not need to meet the following requirements until Jan. 1, 2015:
» Offer minimum essential coverage to 95 percent of full-time employees.
» Offer minimum value (60 percent) coverage to full-time employees.
» Offer affordable (less than 9.5 percent of income) coverage to full-time employees.
» Consider employees who average 30 or more hours per week full-time for health plan purposes.
» Count employee hours to determine whether they average 30 or more hours work per week.
Still confused? Wondering where to go from here?
One recommendation is don’t do this alone. Get some expert help, either from an attorney, consultant or your insurance broker. Understanding 20,000 pages of regulations – and how you need to comply with the law – is cause for anyone to be confused. Manage your confusion by relying on the experts.
Mary Felton, founder and president of HR Business Partners, has more than 25 years of experience. She partners with companies of all sizes to help with their human resource needs, such as legal compliance, handbooks, recruiting and employee relations. Mary’s previous experience included vice president of HR for TIDI Products and Miller Electric. Contact Mary Felton at [email protected], (920) 419-2014, or visit www.hrbusinesspartnersllc.com.