Guidance Released by ACA Administrators on the Delay of Employehttps://bewellinsurance.wordpress.com/wp-admin/post-new.phpr Mandate

Attached is the guidance released by the administration on the delay of the health reform law’s employer mandate penalties and employer reporting provisions for 2014.  It’s pretty brief and certainly doesn’t answer every question we have about the delays, but here are some key takeaways:

  • “Both the information reporting and the Employer Shared Responsibility Provisions will be fully effective for 2015.”-The notice does not specifically address transition relief that had already been allowed for 2014 for employers contributing to multi-employer plans, for those that do not yet fully offer dependent coverage, and for those who have off-calendar plan years, including whether or not that transition relief will be extended into 2015. However, the wording “fully effective” and the fact that the notice deliberately did not extend existing transition relief into 2014 is telling.
  • “Proposed rules for the information reporting provisions are expected to be published this summer.” We have heard that these rules are expected LATE summer and remember September 21 is technically the first day of fall. Also, the Department of Treasury has indicated to us that they plan to gather input from stakeholders regarding the details of the proposed rule before they are issued, including from NAHU and our coalition partners.
  • “Once the information reporting rules have been issued, employers and other reporting entities are encouraged to voluntarily comply with the information reporting provisions for 2014.” ” Real-world testing of reporting systems and plan designs through voluntary compliance for 2014 will contribute to a smoother transition to full implementation for 2015.” Be Well Insurance Solutions encourages our clients and prospective clients to meet with us immediately on these changes, and continue with good-faith compliance efforts regarding the employer shared responsibility requirements and reporting provisions during the coming year. This extra compliance time can be used to asssit you with making sound business decisions regarding the requirements without the risk of significant financial penalties in the first year of changed operations.
  • “Individuals will continue to be eligible for the premium tax credit by enrolling in a qualified health plan through the Affordable Insurance Exchanges (also called Health Insurance Marketplaces) if their household income is within a specified range and they are not eligible for other minimum essential coverage, including an eligible employer-sponsored plan that is affordable and provides minimum value.” While the exchange-based subsidies will be awarded based on self-reported and voluntarily collected data in 2014, the guidance does make it clear that if an individual has a valid offer of affordable and minimum value employer-sponsored coverage, they will technically not be qualified for exchange-based individual subsidies to begin on January 1, 2014. Individuals who receive a subsidy inappropriately may ultimately face personal tax consequences too. Therefore, education of employees and the information employers provide to their employees about the status of their existing employer-based coverage and whether or not it meets the definition of minimum value and/or minimum essential coverage via 2013-2014 SBCs and the exchange notices are critical.
  • “This transition relief through 2014 for the information reporting and Employer Shared Responsibility Provisions has no effect on the effective date or application of other Affordable Care Act provisions.” There are lots of provisions of the law that relate to the employer mandate requirements and reporting requirements, but aren’t contingent on them. Unless we hear otherwise through some type of other major announcement, those requirements and provisions of the law continue on unaffected. Provisions and requirements this guidance does not impact include, but are not limited to:
  • The law’s health insurance market reforms that go into effect as of the first day of the plan year that begins in 2014. For example, these reforms include rating changes in the individual and small group markets, out-of-pocket limits for all markets, prohibitions on waiting periods of more than 90 days for all plans and many more. [Keep in mind for California based businesses the waiting period is 60 days.]
  • Individual mandate. The IRS will monitor compliance with the individual mandate through self-certification on each individual’s tax return
  • Health insurance exchanges. President Obama publicly affirmed on Monday that open enrollment is still expected to begin on October 1, 2013 for all state-based, partnership and federally facilitated marketplaces.
  • The marketplace notice. Unless the administration issues an additional delay, all employers subject to the Fair Labor Standards Act (not just PPACA’s employer mandate provisions) are required to send a marketplace notice to all employees by October 1, 2013. Also, the plan affordability/minimum value information required to be provided in the notice is still required.  Affordability/minimum value are not concepts limited to the employer mandate provisions of the law-they are concepts relevant to ANY employee (part-time, full-time, temporary, seasonal, etc) of ANY employer (regardless of size) who is eligible for employer sponsored coverage and who wishes to apply for a subsidy in the exchange.
  • Summaries of Benefit and Coverage. Unless we receive additional guidance that indicates otherwise, the notices for the coming plan year must include information about whether or not a plan meets the minimum value or minimum essential coverage standards. These standards relate to the employer mandate provisions in the law, but they aren’t limited to it, and the SBC requirements are also unaffected by yesterday’s announcement.
  • PCORI Fee. The first payment of this fee is due by July 31, 2013 for calendar year plans or a plan with year that ended in October or November of 2012. For fully-insured plans, the issuer will pay this fee, but for self-funded arrangements or plans that include both a full-insured and self-funded component, the payment responsibility lies with the employer.
  • The transitional reinsurance fee and the new national health insurance premium tax. Both will be built into 2014 premiums. Other new taxes, like the medical device tax and pharmaceutical tax will also continue and impact coverage costs.
  • W-2 Reporting requirements. These still apply for employers that issue more than 250 W2s.
  • The limit on Health FSA salary reductions.

Click Here for IRS Official Notice

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