Don’t Fall Into the “Delayed Trap” of Health Care Reform
While the turmoil in Washington, DC continues over the government shutdown and the looming fiscal cliff negotiations, employers and HR professionals should be careful not to fall into the perception that healthcare reform is “delayed”.
While the Affordable Care Act (ACA) has its strong supporters and fierce detractors, the only real “delay” is the employer mandate. Often called “Pay or Play,” employer groups with over 50 full-time equivalent employees must offer group sponsored coverage or pay a $2,000 penalty per employee. This same provision also requires employer groups that offer a group sponsored plan to provide a plan that meets minimum value and provide affordability to the employee or pay a $3,000 penalty. This provision is the real delay relating to the ACA with the Federal Government delaying the implementation of the employer mandate until 2015.
One perception of the “delay” has been the inability of individuals to purchase health insurance on the Marketplace or Exchange. Are the Exchanges delayed? No! They are slow, and individuals are most certainly having a very difficult time purchasing healthcare on-line. But the “delay” is caused by the Federal Government trying to set-up one of the most complex buying platforms ever attempted. The Marketplace allows end users to purchase healthcare from the insurance companies with the prices determined by a number of factors, one being household income. The Marketplace “data hub” is a system that will verify people’s Social Security numbers, immigration status, and other information when they go to government websites to buy health plans and apply for government subsidies. Setting up a system this complex is going to be a challenge, but this does not mean the law is delayed.
Health insurance companies are moving forward with the implementation of the ACA. New rating methodologies, new products, limits on waiting periods, new standards, new group numbers, new ID cards and more direct member communication are all happening in 2014.
HR professionals should move forward with their plans to adopt and embrace the ACA – and be prepared to be flexible. Some things you can do to prepare include:
- Identify which employees are full-time, seasonal or variable hour employees.
- Gain an understanding on the number of hours worked by part-timers. As the law is written, for employer groups with over 50 employees, employees with more than 1560 hours worked during the year are considered full-time under the law. These employees will need to be offered coverage or the employer will pay a penalty. Going through this exercise in 2014 will help you avoid any surprises in 2015.
- Determine the technology you are using to track these items. Have you kept your payroll system up-to-date with the latest version releases? Do you know if you can pull these reports from your payroll or tracking system if needed?
- Understand how the ACA will directly impact your business and group health care plan. This requires a detailed discussion with your benefit or consulting firm, and is based on the size of your employer group. HR professionals need to educate themselves first and foremost so they are prepared to answer questions internally to business owners or executive management teams.
- Be prepared for more communication from insurance companies to your employees. Due to many of the provisions of the ACA, carriers will communicate many plan changes or legal items that impact coverage under the law.
The ACA is extremely complex and can be an intimidating discussion due to the sensitivity surrounding its political passage and opposition. It is important for the HR professional or business owner to understand that its implementation and provisions are more than likely here to stay. Washington may make changes to or negotiate provisions of the law; however, these fixes could take weeks, months or years. This doesn’t change the fact that smart companies will plan now to best prepare themselves for the future.
*This article was provided by MEA in partnership with Trinity Benefits Advisors. MEA and Trinity Benefits Advisors are dedicated to providing timely and accurate advice and resources as Members seek to develop competitive and compliant employee benefits programs.