On June 28th, the U.S. Supreme Court upheld the individual mandate and most of the Patient Protection and Affordable Care Act (PPACA). Because the individual mandate was found to be acceptable, most of the rest of the law (including the exchanges and the requirement that larger employers provide minimum coverage or pay penalties of their own) automatically stands.
Many employers are wondering what they should do now? The following is a timeline outlining what requirements employers will be responsible for over the next 18 months under Health Care Reform.
Changes Affecting Employers and Group Health Plans 2012 and Beyond
2012:
August 1, 2012
Minimum Loss Ratio letters (applies only to fully insured plans)
First Open Enrollment Beginning After September 23, 2012
Uniform Health Plan Summary of Benefits and Coverage (SBC)
2013:
January 1, 2013
Employer W-2 reporting for benefits provided during prior year (not applicable to employers that issued fewer than 250 W-2’s for 2011)
Health FSA contributions limited to $2,500*
Increased Medicare health insurance tax withholding on high-income individuals
Repeal of employer business deduction for qualified retiree drug programs+
First dollar preventive care services for women (not applicable to grandfathered plans; one year moratorium for certain religious institutions)*
March 1, 2013
Employee notice requirement re: exchanges (minimal details have been released on this requirement)
July 31, 2013
Patient-centered outcomes (“comparative effectiveness”) fee due
*- or start of 2013 plan year, if later
+ – 2013 tax year
2014:
Plan Coverage Provisions – Plan Design
Pre-existing conditions exclusion not applicable to adults (or children)*
Employee waiting period for coverage cannot exceed 90 days
Annual limits prohibited on essential health benefits
Limits on cost-sharing (deductibles and out-of-pocket maximums)*
Wellness programs may increase penalty/reward to 30%
Clinical trials coverage*
Other Provisions Impacting Employer-Based Coverage
Exchanges available to individuals and small employers (employers with fewer than 100 employees, although state may drop the threshold to 50 employees)
Qualified Health Plans (QHP’s) participating in exchanges may be offered through cafeteria plans
Shared responsibility (“play or pay”) penalty for employers with 50 or more full-time employees (or full-time employee equivalents) who fail to provide minimum, affordable coverage to full-time employees
Employer Reporting and Notice Requirements
Employer reporting: providing minimum essential coverage
Employer reporting: furnishing of qualifying and affordable coverage
Return filing requirements for employers not offering coverage
Individual Mandate Effective
Penalty applies if individual fails to obtain coverage through employer, exchange or a government program
Individual subsidies available up to 4x the federal poverty level
Exchanges
State-based Insurance exchanges (some may be run by federal government)
Co-ops / multi-state plans / interstate compacts possible
Small business health options (SHOP) exchanges available
Navigators
Initially available only to individuals and small employers (employers with fewer than 100 employees, although state may drop the threshold to 50 employees); states may expand to large employers in 2017
Cost sharing available for individuals below 2x the federal poverty level
Exchanges – Benefit Designs and Qualified Plans
Minimum essential benefits required for exchange plans
Optional additional required benefits
Qualified plans to offer “metal” levels of coverage (platinum [90%], gold [80%], silver [70%] and bronze [60%])
Health care quality rewards via market-based incentives
Insurer Provisions
Guaranteed issue *
Guaranteed renewability *
Modified community-rating (“fair health insurance premium) requirements (small group market only)*
Insurance risk pools
Medicaid Expansion (unless state opts out)
Nondiscrimination Requirements
Currently applies to self-funded plans
Effective date for fully insured plans indefinitely delayed*
Will impact ability to provide different eligibility, benefits and premium subsidies to different groups
Automatic Enrollment
Applies to employers with more than 200 employees
Effective date delayed until at least 2014
Excise Tax on High Cost (“Cadillac”) Plans (effective 2018)
* = Grandfather rules apply
As always, we at Innovative would love to hear from you should you have any questions so please feel free to contact us!
