What Does The Election Mean For Employers And PPACA?

Now that President Obama has been re-elected, the Patient Protection and Affordable Care Act (PPACA) will move forward largely as the law was passed in 2010.

The law left the task of working out many of the details to various regulatory agencies and with many questions remaining unanswered, employers can expect that an enormous number of regulations will be issued between now and the end of 2013.

Of great interest to employers is the employer shared-responsibility ("play or pay") requirement. As of Jan. 1, 2014, employers who have 50 or more full-time employees must offer "minimum essential" (basic) medical coverage for their employees who work more than 30 hours per week- or pay a penalty of $2,000 per full-time employee, excluding the first 30 employees.

Employers who offer coverage that is not "affordable" or fails to provide "minimum value" must pay a penalty of $3,000 for each employee who receives a premium tax credit. Coverage is not "affordable" if the employee's cost of single coverage is more than 9.5 percent of income. Coverage does not provide “minimum value” if it is expected to pay less than 60 percent of anticipated claims.

Regulations are still needed to provide details on how the penalty will be determined and collected for employers who do not provide health coverage to their full-time employees, what exactly is the "minimum value" coverage that must be provided to avoid the penalties, and when dependent coverage is "affordable."

The health insurance exchanges are also scheduled to begin operation in January 2014. While PPACA is a federal law, the health insurance exchanges were designed to be operated by the states. If a state is unable or chooses not to create an exchange, the federal government will run the exchange on the state's behalf.

In addition to deciding whether to "play" (provide health coverage) or "pay" (the penalties), employers (including those with fewer than 50 employees) have a number of compliance obligations between now and 2014, including:

• Distributing medical loss ratio rebates if any were received from the insurer
• Expanding preventive care to include a number of women’s services
• Issuance of summaries of benefits and coverage to all enrollees
• Reducing the maximum employee contribution to $2,500, if the employer sponsors a health flexible spending account (FSA), beginning with the 2013 plan year
• Withholding an extra 0.9 percent FICA on those earning more than $200,000 beginning in 2013
• Providing information on the cost of coverage on each employee's 2012 W-2 if the employer issued 250 or more W-2s in 2011
• Providing a notice about the upcoming exchanges to all eligible employees in March 2013
• Calculating and paying the Patient Centered Outcomes Fee in July 2013 if the plan is self-funded
• Working with the exchanges to identify those employees eligible for premium tax credits
• Reporting to the IRS on coverage offered and available- first reports due in 2015 based on 2014 benefits
• Limiting eligibility waiting periods to 90 days, beginning with the 2014 plan year
• Removing annual limits on essential health benefits and pre-existing condition limitations for all individuals, beginning with the 2014 plan year

If you have questions about how these new regulations will affect your business, call Allied Brokers today. Visit our website at www.alliedbrokers.com for information about all the types of insurance we offer. Or call 1-888-505-7988 for a free rate quote.

Information provided courtesy of AEIS 306 6th Ave. Ste. B, San Mateo, CA 94401