It's Time to Refocus
On July 2, 2013, the Obama Administration announced that it would postpone until 2015 the implementation of two key elements of the Affordable Care Act (ACA). These two elements pertain to the reporting requirements for large employers (50 or more full-time equivalent employees) that determine whether or not employers provide affordable, qualified health coverage to full-time employees:
- Section 6055 - the reporting by insurers, self-insuring employers, and other parties that provide health coverage
- Section 6056 - the reporting by certain employers concerning the health coverage they offer to their full-time employees.
Employers that fail to do so will be assessed a “shared responsibility” (pay or play) penalty. The Administration’s decision to postpone these reporting requirements were dictated by the complexity and technical challenges of the reporting requirements and the Treasury Department’s failure to issue formal guidelines for these issues. Originally, these provisions were set to be implemented on January 1, 2014.
(Note: Since the July 2nd decision to postpone, the provisions have been delayed until 2016 for small employers1 with plan years beginning before Jan. 1, 2016.2)
The postponement of the ACA provisions was generally well accepted and appreciated by large employers. The July delay, coupled with the negative publicity of the health insurance exchanges, allowed employers to further delay implementing benefit changes to conform to the law. Many employers are just starting to formulate plans to meet their desired conformity level. This means that the first six months of 2014 are going to be extremely busy in the benefit’s arena. Employers are going to want a tremendous amount of information, pricing for plan changes, contract changes, employee communication material, system updates, etc. An additional real problem is that they’re going to want the work completed and ready for open enrollment periods in the last quarter of 2014.
We strongly urge employers to begin now. Plan and make necessary or desired changes to your program as soon as possible. Even if you delay implementing the changes until closer to 2015, we recommend you plan to do so now to avoid the chaos and backlog that will occur in the last quarter of 2014. Each employer will have different needs and learning curves regarding the ACA so a six month planning, scheduling, and implementation window is realistic. The timetable below is for your review. Take a look at it and determine where you think your company’s efforts fall on the chart.
Do keep in mind that, assuming no further delays, "Pay or Play" penalties for non-compliance start January 1, 2015. Don’t delay! Start now!
What has your company done to comply with these imminent requirements?
1The Affordable Care Act defines a small employer as having at least one but no more than 100 employees. However, it provides states the option of defining small employers as having at least one but not more than 50 employees in plan years beginning before Jan. 1, 2016.
Generally, if you have fewer than 100 employees (using the definition for full-time equivalents) you will be purchasing coverage in the small group market.
2 Starting in 2015, employers with 50 or more full-time employees or equivalents that do not offer coverage to their full-time employees face a penalty of $2,000 times the total number of full-time employees (minus 30) if at least one full-time employee receives a premium tax credit/subsidy to purchase coverage through a government-run health insurance exchange established under the PPACA. (SHRM article dated July 3, 2013)