IRS releases draft of employer reporting form for health reform law compliance

Originally post July 25, 2014 by Matt Dunning on

The Internal Revenue Service has issued draft versions of the reporting forms most employers will begin using next year to show that their group health insurance plans comply with the health care reform law.

The long-awaited draft forms, posted late Thursday afternoon to the IRS' website, are the first practical application of employers' health care coverage and enrollment reporting obligations under the Patient Protection and Affordable Care Act since the regulations were finalized in March.

The forms are the primary mechanism through which the government intends to enforce the health care reform law's minimum essential coverage and shared responsibility requirements for employers.

Beginning in 2015, employers with at least 100 full-time employees will be required to certify that benefits-eligible employees and their dependents have been offered minimum essential coverage and that their employees' contributions to their premiums comply with cost-sharing limits established under the reform law. Smaller employers with 50-99 full-time employees are required to begin reporting in 2016.

Additionally, self-insured employers will be required to submit documentation to ensure compliance with minimum essential coverage requirements under the reform law's individual coverage mandate.

“In accordance with the IRS' normal process, these draft forms are being provided to help stakeholders, including employers, tax professionals and software providers, prepare for these new reporting provisions and to invite comments from them,” the IRS said in a statement released Thursday.

The IRS said it expects to publish draft instructions for completing the reporting forms by late August and that both the forms and the instructions would be finalized later this year.

Last year, the Obama administration announced it would postpone implementation of employers' minimum essential coverage and shared responsibility obligations under the reform law for one year, largely due to widespread complaints about the complexity of the reporting requirements.

Though several months have passed since the administration issued a simplified set of information reporting rules, many employers have delayed preparations for meeting the requirements until the forms and instructions are available for review, said Richard Stover, a principal with Buck Consultants at Xerox in Secaucus, New Jersey.

“A lot of employers really haven't been doing anything about reporting requirements, even with the final regulations in place, because they were waiting for these forms,” Mr. Stover said. “This is something they've been anxious to see.”

Despite Delayed Key Provision, Health Care Reform Triggers Benefits Action Among Employers

Originally posted March 03, 2014 on

Employers report impact on benefits funding, opening opportunity for voluntary benefits

NEWARK, N.J.--(BUSINESS WIRE)--With Affordable Care Act deadlines imminent in 2014 and 2015, employers are reporting the increased impact of health care reform on various aspects of employee benefits. According to Health Care Reform: Full Steam Ahead, the first in a series of five research briefs based on The Prudential Insurance Company of America’s (Prudential’s) Eighth Annual Study of Employee Benefits: Today & Beyond, nearly half (49%) of employers report they are extremely or very likely to make a high-deductible health plan their only health insurance option.

“The Affordable Care Act could very well usher in a new era for and emphasis on voluntary benefits. More employers are utilizing them for recruiting and retaining talent and employees increasingly view them as a cost-effective way to protect their families’ financial futures.”

“Although employers anticipate scaling back benefit offerings due to cost considerations, there’s great opportunity for them to offer voluntary benefits in order to continue providing attractive benefits to their employees,” said Vishal Jain, vice president, Strategy, Planning and Business Insights, Prudential Group Insurance. “The Affordable Care Act could very well usher in a new era for and emphasis on voluntary benefits. More employers are utilizing them for recruiting and retaining talent and employees increasingly view them as a cost-effective way to protect their families’ financial futures.”

According to the report, 73% of employers say the law is having an impact on benefits service and support and 69% report there is an impact on benefits communications. “With a shifting benefits landscape, carriers are now focused on being a trusted resource for employers while offering a full spectrum of services such as enrollment communications, benefits education, record keeping, and administrative services,” Jain said.

In addition to highlighting the law’s potential impact on voluntary benefits, health insurance exchanges central to the legislation are top of mind for employees surveyed. Key findings include:

Employees are increasingly confident more Americans will be covered under the Affordable Care Act (43%, up 7 percentage points from 2012). An expanding number feel fewer employers will offer health insurance (44%, a 13 percentage point increase from 2012), and 38% of those employees believe their employer will drop coverage.

Most employees report having neither a favorable nor unfavorable opinion toward both public and private exchanges.

About one-third of employees report they have heard of but know little about public or private exchanges while one-in-five say they have never heard of either before the survey.

“As employers evaluate the implications of public and private exchanges, the importance of their partnerships with carriers will continue to grow. Employers will look for carriers that provide value, make benefits administration easier, help employees make better benefit decisions, and provide excellent customer service,” said Jain. “We’re poised to support our customers with innovative and cost-effective benefit solutions, coupled with a full array of services designed to improve employees’ financial wellness.”

Taking A Strategic Look at Health Insurance and PPACA

Originally posted February 05, 2014 by Thom Mangan on

Good, bad or indifferent by now most employers that offer benefits to their employees are feeling the changes resulting from the Affordable Care Act. With every day that passes, they move a step closer to having to make decisions regarding compliance with PPACA, but more importantly, they have to rein in health care costs in order to keep the bottom line above water. So how do they plan to do that?

I checked in with Peter Freska, CEBS, Benefits Advisor with UBA Partner Firm, The LBL Group, and asked him what he’s seeing in the employer-sponsored insurance marketplace. Peter specializes in the large employer market and emphasizes long-term strategic planning to his clients.

Thom: Peter, what are you seeing as the top questions on employers’ minds as they begin to plan (if they have not already) for how best to adapt to the changing health insurance market?

Peter: offers some interesting insight into what business owners are asking, with the following questions:

While these questions may be a good place to start, employers are still faced with rising insurance premiums and reduced benefits. Planning for next year has always been important, but unfortunately, many employers only look as far ahead as the next renewal. The health care landscape is rapidly changing. With the current insurance companies re-filing new plans and networks, and new companies trying to break into the health insurance market and the continued vertical and horizontal integration of health care delivery systems — well, the times they are a-changin’.

Thom: What, currently, is the most pressing aspect of health care reform in the eyes of many employers?

Peter: As it sits, the “Cadillac Tax” legislation that’s slated to take effect on January 1, 2018.

Employers who provide health plans that are too rich (“Cadillac plans”) must pay a non-deductible 40% excise tax on the value of health plan coverage that exceeds $10,200 (indexed) for individual coverage and $27,500 (indexed) for family coverage. Value is based on both employer and employee contributions for medical coverage, health FSAs, HRAs, onsite clinics and employer HSA contributions.

Thom: Yes, according to the most recent UBA Health Plan Survey, employers in the Northeast are particularly at risk of facing the “Cadillac Tax” because of their high annual cost per employee (total cost). The Northeast has the highest total cost in the country at $10,808 per employee, which also saw the largest increase in cost at 5.35% (mostly because they still offer low deductible plans). The Southeast, however, remains the lowest cost region at $7,846 per employee with a renewal of 1.98%. A combination of non-deductible plans in the Northeast with a prevalence of massive state-mandated benefits is what’s driving the high costs of the Northeast (if fully insured).

So this impending tax poses some interesting questions for employers. What are they doing to prepare for this event?

Peter: Good question, Thom. Some wonder if they even should plan for this event! Many feel that these limits are too low, as there are plans today that exceed these numbers. Others feel that the inflation rate that the health plan values are indexed to after 2018 (CPI-U + 1%) is too low, stating that it does not meet medical inflation rates (Health Policy Briefs – Excise Tax on ‘Cadillac’ Plans).
But ultimately, when coming face-to-face with this excise tax, businesses will have to get their costs under control in order to avoid it. The question is, how do they do that?

We’ll likely see more of the same that they have done for many years: more managed care and cost shifting through contribution and benefit changes. The question that remains is, “will this be enough?” As medical costs continue to rise and more minimum value plans are offered by employers, when will the wiggle room be gone?

Employers with a strategic viewpoint are working with their trusted advisor to review the possibilities. They are strategizing on options now so that they are prepared for what lies ahead. There might be changes to the “Cadillac Tax,” but this is only one of several taxes under PPACA. Additionally, there are employer reporting requirements going into effect. Employers have more to manage than ever before. It is more important than ever to partner with an advisor that understands these new responsibilities, and is able to work with an employer to meet their goals. Always review the scope of work from an advisor to make sure it can align with the strategic goals of the organization. With or without PPACA, this is how an employer can make a difference in how it provides benefits.

Thom: Yes, although challenging, it’s an exciting time to be a benefits advisor. Thank you, Peter, for sharing this information.

Economists see little effect on hiring from ACA

Originally posted January 27, 2014 by Carolos Torres on

The vast majority of U.S. companies said the implementation of the Obama administration’s health care law will have no effect on their businesses or hiring plans, according to results of a poll issued Monday.

About 75% of those surveyed said the Affordable Care Act hasn’t influenced their planning or expectations for 2014, according to data from the National Association for Business Economics. Twenty-one percent of 64 respondents said that the law would have a negative impact on business conditions and 5% said it will be positive.

Most, 85%, also said the law wouldn’t prompt a change in their hiring practices, according to the survey. Some 6% said it would lead to more employment of part-time help and fewer full-time staff, while 8% said it would lead to less hiring of all types of workers.

Participants were also sanguine about changes in Federal Reserve monetary policy, with 70% saying tapering of record stimulus would have no effect on profitability, and the remaining split almost evenly between positive and negative implications for earnings. An overwhelming majority of participants, 94%, said uncertainty regarding what direction policy makers would take prompted no change in capital investment plans.

“A significant majority of survey respondents anticipate little material impact on business conditions from the implementation of the Affordable Care Act or from possible changes in the Federal Reserve’s accommodative monetary policy stance,” Jack Kleinhenz, NABE president and chief economist at Kleinhenz and Associates in Cleveland Heights, Ohio, said in a statement. “On net, survey respondents are more optimistic in their economic outlook and, regardless of any changes in monetary policy, expect their firms’ performance in 2014 will be superior to that in 2013.”

What’s ahead in 2014 for PPACA

Originally posted December 18, 2013 by Nathan Solheim on

Let’s be honest. In the history of American health care, the year 2013 won’t exactly go down as a time that went as smoothly as one of President Barack Obama’s campaign speeches.

At mid-year, most observers could see some of the downsides: rising premiums and dropped policies. Deadlines had to be pushed back, and some parts of the law demanded rewrite.

And by October — when the exchanges rolled out — there were (are) glitches with state websites and, which prompted calls for Silicon Valley to rescue the $600 million mess. Tea Party Republicans partially closed the government in an attempt at political blackmail, while Democrats quickly distanced themselves from the program’s failures. It was difficult for any good news about PPACA — such as reduced premiums for some consumers and the ability for people with pre-existing conditions to buy coverage again — to cut through the media morass.

But even though PPACA implementation has been bumpy, it will continue — and 2014 will prove to be a pivotal year. Much of the law’s major provisions take effect next year, and yes, there are likely to be more delays or problems. Brokers can count on clients, employees and HR managers turning to them for advice on coming into compliance with the law and helping make decisions in the uncertain business environment ahead.

“In some respects, someone who’s new to insurance and is learning the new scheme — they’ll have an advantage because the stuff we used to know doesn’t apply anymore. It’s all new,” says Pamela Mitroff, director of state affairs for the National Association of Health Underwriters. “I answer the bulk of compliance questions from our members. I get 20–30 a day, and they’re not just one simple question. Many of them will have a page of questions.”

Here’s a look at what’s ahead in 2014 for PPACA:

The individual mandate

Beginning Jan. 1, 2014, Americans must buy health insurance from a private insurance provider or through a public program. While the glitch-marred exchange website debuted in October 2013, individuals must have insurance by Jan. 1 in order to comply with the new regulation. The penalty for failing to do so is either $95 or 1 percent of a person’s income — whichever is higher.

Market reforms

PPACA includes a bevy of market reforms — the most notable being that carriers will have to cover people with pre-existing conditions. Others include prohibiting lifetime limits, defining small employer groups as between 1–100 employees (some states can define as 50 employees until 2016), and limiting annual deductibles to $2,000. Brokers and agents point to PPACA’s edict on modified community ratings as a major factor in potential increases in the cost of plans. PPACA mandates a 3:1 community rating, while some states are as high as 8:1. Carriers also will not be able to charge more for women.

“You’ll see younger people with plans that go up in price, and the older folks, in all likelihood, stay where they were,” says Zach Zinser of Zinser Benefit Service in Louisville, Ky. “They’re going to raise the bottom up.”

Tax credits begin

Because of the individual mandate, Obamacare also includes tax subsidies for individuals to help them afford the cost of health insurance. However, the tax credits are dependent on annual income and access to private plans. Brokers have answered a lot of questions from employees about whether they qualify for a tax credit and will continue to do so.

“The No. 1 question I get is, ‘Am I eligible for a subsidy?’” says Trish Freeman of Trish Freeman Insurance Service in Gonzalez, La.

“When people hear Affordable Care Act or they hear comments from [The Department of] Health and Human Services or the president, they’re expecting something affordable,” says Darlene Tucker, owner of Darlene Tucker Insurance and Financial Planning in Scotts Hill, Tenn. “And they may or may not find it affordable. We’re going to see a lot of people where the premium is not affordable. And I think we’ll still see people who can’t afford the premium who aren’t eligible for the subsidy.”

New tax No. 1

To help pay for it, architects of the law built in several new taxes and fees on carriers. Perhaps the most expansive is called the Health Insurance Tax, which is expected to generate $8 billion in 2014 and more than $100 billion over 10 years, according to America’s Health Insurance Plans. Several groups — and unions that have negotiated top-shelf plans for their members — have started lobbying to repeal the tax.

New tax No. 2

Another tax comes in the form of the “transitional reinsurance fee.” A fee of $63 for each life covered on a health insurance plan will be collected yearly from carriers. The fee will be first be collected in 2014, and it will continue being collected through 2016. The fee is supposed to offset the extra cost of covering people with pre-existing conditions.

Brokers and agents credit these two new taxes and others as contributors to premium increases across the country.

“Those are all taxes that will be built into the price now,” Zinser says.

Medicaid expands

Medicaid — the state-federal program that provides health coverage for the poor — will expand to cover individuals whose incomes are 133 percent of the federal poverty level. Some states have opted not to take part in the Medicaid expansion.

Health care co-ops

Co-ops will be allowed to compete for consumers on the exchanges. An Oct. 22 story in theWashington Post, however, reported some co-ops are in trouble and might not have enough funding to adequately begin operations. In some states, though, co-ops have launched.

“Unfortunately, when everyone in Michigan had to submit their rates, it was a guessing game, and [the co-op’s] rates are higher,” says Denise Van Putten, an account executive with the Grand Rapids, Mich.-based Lighthouse Group. “I think a co-op is a good idea if we can get the rates to be competitive.”

Freeman pointed out the relative youth of the co-ops — many of which were created during the time since Obamacare’s passage — could affect consumers’ perception about their quality and affordability.

“In Baton Rouge, there are two companies on the exchange — we have Blue Cross and the Louisiana co-op,” Freeman says. “People are a little leery about companies they don’t know anything about.”

Minimum standards

All health insurance policies must adhere to standards set forth under PPACA. People who’ve lost policies in 2013 and those who will continue to lose coverage in 2014 will do so because their existing plans don’t meet 10 minimum standards mandated under PPACA.

Those standards include:

  • ambulatory patient services
  • emergency services
  • hospitalization
  • maternity and newborn care
  • mental health and substance use disorder services, including behavioral health treatment
  • prescription drugs
  • rehabilitative and habilitative services and devices
  • laboratory services
  • preventive and wellness services and chronic disease management
  • pediatric services, including oral and vision care

Waiting periods defined

Also starting Jan. 1, the waiting period for people to sign up for health insurance will be set by PPACA. Waiting periods of more than 90 days will be prohibited for all health plans. Brokers and agents say this provision mainly affects businesses and industries that experience high turnover.

Wellness worth more

PPACA also allows employer-sponsored wellness programs to increase the value of incentives. After Jan. 1, employers can increase the value of incentives to 30 percent of premiums. For reducing tobacco use, employers can increase the maximum reward up to 50 percent.

Factor in the new regulations with parts of the law that are already in effect, and brokers and agents agree that there has been a profound impact on the individual and small-group markets. Some warn that the market could disappear, while others say the market can withstand Obamacare’s regulations.

“For brokers that work in the small-group arena, the vast majority of groups with under 50 employees are going to look at dropping their coverage,” Tucker says. “That’s been my opinion since the law passed, and nothing has happened to change my mind.”

Van Putten says that among the more than 500 small groups he manages, less than 10 percent will drop their coverage.

“The rates out there for individuals are high,” she says, “so they’re completely different from the group plans.”

So as 2014 looms, brokers around the country are continuing to advise clients. But they’re also looking around for new opportunities and developing strategies to keep their own businesses afloat. Some have advised a wait-and-see approach, while others have been more aggressive.

Freeman says at the end of the day, it’s about helping clients.

“I can’t bail on them,” she says. “I can’t leave them with a navigator — someone who’s had 20 hours of training when I’ve had 20 years of training. I will get my clients through this, and as long as I don’t lose money in the future, I’ll be here.”


States to decide which plans are PPACA-compliant

Originally posted November 21, 2013 by Arthur D. Postal on

States will be the ultimate determinant as to whether they will allow insurers to renew existing health insurances plans in 2014 even though these policies may not comply with the new Affordable Care Act, President Obama and state insurance regulators agreed at a White House meeting last night.

The meeting with several insurance commissioners and Ben Nelson, chief executive officer of the National Association of Insurance Commissioners, was held as the White House continued itsefforts to smooth the troubled political waters caused by the rocky rollout of the federal exchange that will be used by residents of 36 states to buy individual and small group policies mandated by the law.

The state regulators used the occasion to raise other issues with the president, including their relationship with federal insurance regulators given a voice in insurance regulation left to the states for 150 years. A major issue brought up with the president was the role they want to play in establishing international insurance standards.

As for the healthcare, law, under the Patient Protection and Affordable Care Act, everyone must have health insurance by March 31, 2014, or pay a penalty. However, the exchange website unveiled Oct. 1 has proved unequal to its task, and there are questions whether it will be fully up to speed by the end of the month, as promised by the administration.

The inability of people to access the website, plus the realization that the president’s commitment to allow everyone to “keep their existing policies if they like them” contradicts the law’s mandate that each insurance policy must contain certain essential benefits, has generated a major political problem for the president.

These essential benefits include providing insurance to people with pre-existing conditions, free preventative care, maternity coverage and other benefits. Also included is a requirement to provide contraceptives for women.

However, the realization that most existing policies didn’t include such benefits created a major practical problem as insurers notified thousands of affected consumers that their existing policies would be cancelled.

As the meeting was being held, CareFirst BlueCross Blue Shield, which serves Maryland, announced that it would allow more than 55,000 policyholders to retain their policies for one year even though the policies don’t contain some of the essential benefits mandated by the new law. CareFirst acted one day after the Maryland insurance commissioner said he would approve such action. Other health insurers in the state said they would also do so; others said they would not.

Other states, like Florida, said they would also allow consumers to keep their existing policies for one year. But, others, like New York, Washington and Indiana, said they would not comply. CaliforniaInsurance Department officials said they would announce their decision today.

At the meeting, the state insurance regulators emphasized their concern that different rules for different policies would be detrimental to the overall insurance marketplace and could result in higher premiums for consumers, without addressing the underlying concern of gaps in coverage. They also emphasized the importance of deferring to the states to protect consumers, and highlighted the track record of effective regulation by insurance departments across the country.

However, they acknowledged that they are just standard-setters, not policymakers and reiterated, as stated by Jim Donelon, NAIC President and Louisiana insurance commissioner, that PPACA is “the law of the land."

“Since the passage of ACA, state regulators have been working to ensure that plans are compliant with the new rules,” Donelon said at the meeting.

He said the proposed changes announced by the president in an executive order last Thursday in response to the uproar over the cancellations and the difficulty consumers are having buying policies on the federal website has creating “a level of uncertainty that we must work together to alleviate.”

Donelon made clear, however that state regulators “share the President’s goal of affordable coverage for consumers, and we will work with the insurance companies in our states to implement changes that make sense while following our mandate of consumer protection.”

Donelon attended the meeting with NAIC Chief Executive Officer Senator Ben Nelson, Connecticut Insurance Commissioner Thomas B. Leonardi, and North Carolina Insurance Commissioner Wayne Goodwin.

The group discussed practical implications of implementing the delay in enforcement as well as outstanding questions regarding what specific provisions would be impacted, and talked to reporters at length at what was accomplished at the meeting in a conference call afterwards.

Amongst the presidential aides attending the meeting was Kathleen Sebelius, secretary of the Department of Health and Human Services. Sebelius and officials of the Centers of Medicare and Medicaid Services, which oversaw development of the website, have been under intense fire because the website has failed because of the huge numbers of people who sought access to it, and because testing designed to prove it worked was not even started until a week or so before the Oct. 1 rollout.

The White House released a statement saying the state regulators had been given full authority as to whether to accept the grandfathering. According to the statement, Obama said that his executive order requires that health plans that offer such renewals provide consumers with clear information about consumer protections lacking in those plans and their options and possible tax credits through the exchanges. The statements said that Obama acknowledged that, “States have different populations with unique needs, and it is up to the insurance commissioner and health insurance companies to decide which insurance products can be offered to existing customers next year.”

Additionally, according to the White House statement, the president emphasized that he wants to hear any ideas that insurance commissioners “may have as implementation continues to ensure that Americans across the country have the information they need to get affordable, quality coverage for themselves and their families.”



Groups defend small self-insured plans

Originally posted November 14, 2013 by Allison Bell on

Defenders of self-insured health plans testified on Capitol Hill today that the plans are tools for employers to get more control over benefits programs, not get-out-of-federal-health-regulation free cards.

The witnesses — including Robin Frick, a Madisonville, La., benefit plan administrator, who spoke on behalf of the National Association of Health Underwriters, and Michael Ferguson, the president of the Self-Insurance Institute of America, appeared at a hearing on self-insurance organized by the House Small Business Committee health subcommittee.

Some health policy watchers, including Linda Blumberg of the Urban Institute, who also testified at the hearing, have suggested that young, healthy small groups could use self-insurance simply to escape from Patient Protection and Affordable Care Act requirements, and that a flight toward self-insurance could destabilize the small-group health insurance market.

Frick told subcommittee members that most PPACA market protection rules will apply to self-insured groups as well as to insured groups.

"Further, some protections, like non-discrimination testing, already apply to all self-funded plans," Frick said, according to a written version of his remarks posted on the committee website.

The U.S. Department of Health and Human Services is giving more flexibility to insured plans in some areas, such as employee participation requirements, than to self-insured plans, Frick said.

Ferguson gave a list of some of the many PPACA rules that apply to non-grandfathered self-insured plans, including the ban on annual and lifetime benefits limits, preventive services coverage requirements, benefits summary requirements, disclosure requirements, external claim denial review requirements, limits on waiting periods, and an emergency services coverage mandate.

Many of the PPACA provisions that exempt self-insured groups, such as PPACA health insurance rate rules, are irrelevant to self-insured groups, because the self-insured plan sponsors already have an obvious incentive to try to hold down administrative costs, Ferguson said.

IRS struggles to combine PPACA reports

Originally posted September 6, 2013 by Allison Bell on

The Internal Revenue Service is still trying to figure out how to combine two new Patient Protection and Affordable Care Act reporting programs.

One of the new programs requires a carrier to tell the IRS and consumers whether it’s providing minimum essential coverage.

The other requires a large employer to tell the IRS whether it’s meeting the “shared responsibility” requirements -- the employer mandate -- by offering full-time workers affordable coverage with a minimum value. An employer that violates the mandate rules could have to pay a penalty of $2,000 per affected worker.

The IRS will publish the PPACA Section 6055 MEC reporting requirement and PPACA Section 6056 shared responsibility reporting requirement draft regulations in the Federal Register on Monday.

It’s been suggested before that the IRS combine the two programs. But doing so would be complicated, because the programs apply to different entities and will generate different types of information, IRS officials said.

In some cases, the IRS may let large employers use information reported on Form W-2 and information reported to meet the Section 6055 MEC reporting requirements to meet the Section 6056 shared responsibility requirements, officials said.

The IRS is considering letting employers meet the Section 6056 shared responsibility reporting requirements by using a code on the W-2.

Also in the draft, officials:

  • Declined to let employers with fiscal years other than the ordinary calendar year to base Section 6055 or Section 6056 reporting on the fiscal year. Consumers need the coverage information early in the calendar year, officials said.
  • Declined to create a safe harbor from penalties for coverage issuers or employers that violate reporting rules because other parties cause problems. Another provision already offers issuers and employers relief for any errors that are corrected in a timely manner, officials said.
  • Said that the insurer that insures a group health plan, not the group plan sponsor, is responsible for meeting the Section 6055 MEC reporting requirements for the group plan members.

9 items to tackle ahead of the Oct. 1 deadline

Originally posted September 6, 2013 by Dan Cook on

Enrolling employees for the 2014 company health plan will put plan managers to a test like they’ve never seen before. Those that haven’t already immersed themselves in the details are going to be working some very late nights in the next couple of weeks.

John Haslinger, vice president for strategic advisory services at ADP, helped compile a list of the essentials that must be executed in order to comply with the law and avoid sanctions.

Haslinger strongly advises that companies take these requirements seriously. He said the government’s decision to delay the corporate plan sanctions piece of the PPACA until 2015 doesn’t let anyone off the hook as far as meeting all the other requirements by Jan. 1. And many items must be completed by Oct. 1.

Here, then, are nine items you need to check off your 2014 checklist to stay out of the PPACA’s woodshed.

1. Notice of coverage or exchange notification: It’s up to employers to notify every employee, covered by a company health plan or not, of the health care options available to them through the insurance exchanges created by the Patient Protection and Affordable Care Act. This notification must be in an employee’s hands no later than Oct. 1. Employers hired after Oct. 1 have to be notified within 14 days.

Suggestion:  If you haven’t started this process, hire a third-party administrator with knowledge of the process to do it for you.

2. The Transitional Reinsurance Fee: This is the $63-per-covered-employee fee that plan sponsors and insurers must pay. The money goes to fund insurance for high-risk individuals. Employers and insurers have to report their enrollment numbers to the feds by Nov. 15. You’ll get an invoice back in a month, if all goes as planned, and the bill will come due a month later.

Suggestion: Set aside a good chunk of dough now to cover the cost.

3. Essential health benefits: This section of the PPACA requires non-grandfathered health plans to cover 10 essential health benefits as follows:

(1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services including behavioral health treatment; (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services;(9) preventive and wellness services and chronic disease management; and (10) pediatric services, including oral and vision care.

For newly hired full-time employees who come on board after Jan. 1, coverage must be made available no longer than 90 days after hire.

Suggestion: State EHBs may vary, so make sure you know the requirements where you live.

4. Defining and counting your eligible full-time employees: The PPACA has redefined full-time employees for purposes of healthcare coverage. Now, employers must offer coverage to anyone who works an average of 30 hours a week. Calculating the 30 hours can be tricky, so you need to know the details. For instance, hours an employee is paid to work aren’t the only ones you count. You need to include the hours you pay someone not to work, such as vacation time, and hours of unpaid leave, such as jury duty. Having a good fix on who your eligible employees will be come Jan. 1 is critical to meeting the requirements of the law. To provide good data to the feds when they ask for it in 2015, employers will have to start tracking hours beginning this Oct. 1.

Suggestion: If you have put this exercise off because of the delay for sanctions until 2015, start counting now. You’ll need data from 10/1/13. Just because you don’t face sanctions doesn’t mean it isn’t essential to have a handle on this number.

5. 90-day waiting period: Under the PPACA, a group health plan or health insurance issuer offering group health insurance coverage must offer health coverage to new employees within 90 days of their hiring. No more “we’ll get you covered if you survive six months here.”

Suggestion: You might want to test potential hires out as contractors to make sure they’re a fit before you’re committed to coverage after 90 days.

6. Preventive services must be offered without cost-sharing: This requires group health plans to cover recommended preventive services without charging a deductible or co-pay/coinsurance. Grandfathered plans are generally excluded from complying with this provision. Among these services are immunization, well-woman visits, screening for gestational diabetes, screening for sexually transmitted diseases, well baby visits, and others.

Suggestion: If your benefits package includes a wellness program, you’ve got more assignments to complete before Oct.1. The idea behind these new rules is that all employees, regardless of their physical condition, should be able to meet the incentives built into wellness programs. Among the requirements:

7. Reasonable accommodations: Some employees, for various reasons, cannot meet the requirements established by wellness programs, so there must be options available for them built into the system.

8. The program must be designed to promote health or prevent disease: Wellness program goals must be tied to direct health benefits. Also, the goals established must not be “overly burdensome.”

9. Rewards must be available to all similarly situated employees: Again, because employees present a range of medical conditions, including some that may thwart them from achieving a reward, the conditions present in a given workplace have to be considered when designing the incentives and goals. Notice must be given to these employees of the options available to them.

Suggestion: Have a wellness program professional review your program to make sure that it is fair to all, truly promotes better health and includes incentives that any employee making a reasonable effort can hope to enjoy.

IRS loosens employer mandate reporting requirements

Originally posted September 9, 2013 by Gillian Roberts on

In a follow-up to the Obama administration’s July 2 employer mandate delay, the U.S. Department of the Treasury and Internal Revenue Service issued a proposed rule late last week that would make certain reporting requirements in the provision of the Affordable Care Act voluntary. According to a statement by the department, “The regulatory proposals reflect an ongoing dialogue with representatives of employers, insurers, other reporting entities, and individual taxpayers.”

The changes include:

  • “Eliminating the need to determine whether particular employees are full-time if adequate coverage is offered to all potentially full-time employees.”
  • “Replacing section 6056 employee statements with Form W-2 reporting on offers of employer-sponsored coverage to employees, spouses, and dependents.”
  • “Limited reporting for certain self-insured employers offering no-cost coverage to employees and their families.”

“Today’s proposed rules enable us to continue engaging on how best to implement the ACA reporting requirements in a more streamlined and focused manner,” said Assistant Secretary for Tax Policy Mark J. Mazur in the statement.  “We will continue to consider ways, consistent with the law, to simplify the new information reporting process and bring about a smooth implementation of those new rules.”

The full statement can be found here and the full rule, with details to provide comments, can be found here.