Large group transitional relief

Column 6: Aug. 11, 2013     Large group transitional relief

I am a large employer with greater than 50 employees and I heard the mandate was postponed.  What does that mean for me?

First, it means that you will have more time to understand some of the provisions of the law and how they apply to you.  Most critically it means that you are not required to offer coverage until 2015.  But, if you are already offering coverage, you will still need to be in compliance with other provisions of the law in 2014.  Some will be effective with your plan anniversary following 1/1/2014 and some will be effective 1/1/2014.

Taxes and Fees:  There are new taxes that must be paid to fund the law's other provisions.  If your plan is fully insured you will likely see those charges added to your premium as a separate line item with the billing for January.  This applies to all employer sponsored plans.  The charge will run between 4-5%. 

PCORI (Patient Centered Outcomes Research Institute Fee):  The first payment of this fee is due by July 31, 2013 for calendar year plans or a plans with year that ended in October or November of 2012.  For fully-insured plans, the insurer will pay this fee, but for self-funded arrangements or plans that include both a fully-insured and self-funded component, the payment responsibility lies with the employer.

As an aside, this portion of the bill has great potential to actually impact health care costs, which is the driving factor behind health care premiums. If we can better evaluate where our dollars are best spent, perhaps we can get a handle on the 18% of our economy that is spent in health care.  

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, but not as directly.

 

The marketplace or Exchange notice.  As of this writing (and stated in a prior column) , all employers subject to the Fair Labor Standards Act  are required to send a notice to all employees by October 1, 2013. This notice will advise them that there is a new marketplace called the Exchange where insurance can be purchased. 

Also, the plan affordability/minimum value information is still required to be provided in the notice.  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.

This is going to be a bit tricky since many insurers have not provided Minimum Value Calculation information relative to 2013 plans.  To access a sample notice:  http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf for those that have a health plan in force.  The minimum value calculator can be found at: http://www.cms.gov/cciio/resources/regulations-and-guidance/index.html.  This calculator can be complicated and we are hopeful that the plans will provide this calculation.  It may be helpful to start asking your agent now, to put pressure on the insurer to provide the calculation before the notice is due 10/1/12013.

 

    Summaries of Benefit and Coverage.  This is a new notice that was required starting last year.  As of this writing, these notices for the coming plan year must include information about whether or not a plan meets the minimum value or minimum essential coverage standards.  This seems repetitive after the marketplace or Exchange notice, but I believe this is where they want the employee to be notified of the minimum value compliance each year in the future.  

   W-2 Reporting requirements.  This applies for employers that issue more than 250 W2s.  The value of the employer sponsored health plan must be reported on the W-2.  In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee.

The limit on Health FSA salary reductions is still $2500 but will be indexed for inflation.  Be sure that your plan document is modified to reflect this change

New maximum waiting period of 60 days for all Group Health plans regardless of size:  The ACA requires a waiting period of no more than 90 days for new employees.  However, in California AB 1083 imposes a shorter maximum waiting period not to exceed 60 days, with regard to group health insurance policy or HMO contract years beginning on or after January 1, 2014. As of this writing we understand it to be no more than 60 calendar days, not first of the month following 60 days of employment.  But this may be further clarified.    

Note: All information in this column is provided" to the best of my knowledge" subject to final regulation by the respective agencies.