It’s “What’s Up? Wednesday”. Time to get an update on the AFFORDABLE CARE ACT . . .

You asked:  “Are there any new updates to Affordable Care Act?”

Alex answers:

We gave you a little breather from the topic. But it is time again to confront that huge, complicated monster looming on the horizon – the Affordable Care Act (ACA). Though its impact on small and midsize companies remains uncertain, some aspects of ACA have become a little clearer as the monster draws closer. Here are a few details that are starting to come into focus:

Most experts agree that this monster of a law is dragging with it increased premiums for all. It is widely believed that employers who provide health coverage are going to see premiums rise across the board. Many of these experts also anticipate employers will be raising deductibles in an effort to bring down costs. By passing costs on to employees, some employers hope to steer clear of the future “Cadillac tax” to be imposed on the more expensive plans.

Keep in mind (and as we discussed in a previous blog post), coverage offered to your full-time employees must meet a minimum requirement and must be considered affordable. So if you think you can just pass off the boost in costs to your employees, think again (unless of course, you don’t mind paying fines of $3000 per employee).

If you do offer healthcare insurance to your employees, expect more enrollees in 2013 than you had in years’ past. It is anticipated that some companies may drop spousal coverage or coverage for employees altogether – this could mean that your employees can no longer rely on their husband/wife and will now have to enroll in your plan. It is advised that you look into all of your options including checking out various online providers.  Starting in 2014, companies with fewer than 100 employees will be able to purchase health plans through the public marketplaces through the Small Business Health Options Program. But expect choices in this exchange to be very limited in the first year.

In addition to possible increases in premiums, we know that the ACA monster is bringing more posting requirements for all employers. The Department of Labor (DOL) recently issued guidance on the requirement for employers to provide all employees with notices informing them of their options for health insurance through the state health insurance exchanges (now known as the Health Insurance Marketplace). Employers must provide the notice to all of their employees (full and part-time) no later than October 1, 2013. Then, starting in 2014, the notice must be provided to all new hires within 14 days of hire.

For employers who do offer health insurance coverage to all or some of their employees, the notice must inform employees of the following:

  • Information regarding the existence of the Health Insurance Marketplace and services provided;
  • Contact information for the Health Insurance Marketplace;
  • A statement that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the Marketplace;
  • A statement that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of the employer’s contribution may be excludable from income for federal income tax purposes.

Separate notices are provided for employers who do not offer a health plan and for employers who offer health insurance coverage to some or all of their employees. The DOL provides “model” notices at http://www.dol.gov/ebsa/healthreform/. They also make clear that this notice must be provided in writing either via air mail or electronically.

The DOL has also revised the standard COBRA notice (which is provided to individuals who lose group health insurance due to a “qualifying event” and become eligible for COBRA continuation of benefits). Under ACA, individuals who are qualified for COBRA coverage now may also be eligible for a premium tax credit to help defray some or all of the costs of coverage in plans offered through the Marketplace. The DOL has revised its model COBRA notice to account for this change. The new notice can be found at the same link above.

These are just a few of the dubious details we will continue to watch as more and more ACA requirements come due. Open enrollment, both for private health plans and for the new insurance marketplaces established by the law, starts October 1, 2013. As any superhero can tell you, the best defense against a huge monster is a good offense. If you haven’t already, start talking to your providers and company leaders to discuss how to offset these costs.

And, as always, direct any ACA or HR questions to us at hrcounselorscorner@eastcoastrm.com. If you’d like email notification of all blog updates, just click the follow button at the bottom of the window.

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