Responding to pressure from consumers and Congress, on Nov. 14, 2013, President Obama announced a new transition policy for 2014. Under the new policy, individuals and small businesses whose coverage has been canceled (or would be canceled) because it does not meet the ACA’s standards may be able to re-enroll or stay on their coverage for an additional year.
However, this one-year reprieve may not be available to all consumers. Because the insurance market is primarily regulated at the state level, state governors or insurance commissioners will have to allow for the transition relief. Also, health insurance issuers are not required to follow the transition relief and renew plans, and have expressed concern that the change could disrupt the new risk pool under the federal and state Health Insurance Marketplaces.
The Affordable Care Act (ACA) created a number of federal reporting requirements for employers and health plans. The additional reporting is intended to promote transparency with respect to health plan coverage and costs. It will also provide the government with information to administer other ACA mandates, such as the large employer shared responsibility penalty and the individual mandate.
Beginning Jan. 1, 2014, individuals and employees of small businesses will have access to insurance coverage through the Affordable Care Act’s (ACA) health insurance exchanges (Exchanges), which are also known as Health Insurance Marketplaces. Open enrollment under the Exchanges will begin on Oct. 1, 2013. ACA requires employers to provide all new hires and current employees with a written notice about ACA’s Exchanges. This requirement is found in Section 18B of the Fair Labor Standards Act (FLSA).
On May 8, 2013, the Department of Labor (DOL) released Technical Release 2013-02 to provide temporary guidance on the Exchange notice requirement. This temporary guidance will remain in effect until the DOL issues regulations or other guidance. According to the DOL, future regulations or other guidance will provide employers with adequate time to comply with any additional or modified requirements.
In connection with the temporary guidance, the DOL announced the availability of model Exchange notices for employers to use to satisfy the Exchange notice requirement. The DOL also set a compliance deadline for the Exchange notices. Employers must provide employees with an Exchange notice by Oct. 1, 2013.
In addition, the DOL’s temporary guidance includes a new COBRA model election notice, which has been updated to include information regarding health coverage alternatives offered through the Exchanges.
In a surprise, The Treasury announced on July 2nd that the employer mandate of the ACA will be delayed until January 1, 2015.
What does this mean for employers? For 50+ employers, the reporting and penalty provisions of the mandate, “Pay or Play”, will take effect in 2015 and will not apply for 2014.
The delay only applies to the mandate, the other provisions of the law remain in effect, and the exchanges, or health insurance marketplaces, are still scheduled to open on October 1, 2013 for January 1, 2014 effective dates. We have received two updated notices and we have posted these on our blog.
The ruling also raises questions such as how are officials that are running the exchanges going to know who will qualify for a subsidy. With this new ruling, employers will not be required to report information on the coverage and affordability provisions that their plans are compliant. We will wait for further guidance on this issue and others that this delay brings and will bring them to you as we learn more.
Why did the announcement come from Treasury and not the IRS or HHS? The reporting requirements and enforcement fall under the Treasury Department. The ruling was announced on a blog post by Mark J. Mazur, assistant secretary for tax policy, which we have included the link to his post on our blog. In his post, Mr. Mazur wrote that the Treasury Department will issue official guidance to insurers, self-insuring parties and other parties that provide health insurance within the next week and formal rules will be proposed later this summer.
Even though the Mandate was delayed, employer still need to be focused on preparing for Reform and the Employer Mandate. This ruling does give us more time to prepare, test systems, and make sure our compliance plans are sufficient. If you have any questions please consult your Clarke & Company Benefits or McLaughlin Smoak & Clarke Benefits representative. We will continue to update our readers on this delay as we learn more from all the agencies that are involved with rules, regulations, and enforcement.
Final Rules on Workplace Wellness Programs Released
The Affordable Care Act (ACA) includes provisions to encourage appropriately designed, consumer-protective wellness programs in group health coverage. Effective for plan years beginning on or after Jan. 1, 2014, ACA essentially codifies the existing HIPAA nondiscrimination requirements for health-contingent wellness programs, while also increasing the maximum reward that can be offered under these programs.
On May 29, 2013, the Departments of Labor, Health and Human Services and the Treasury (Departments) released final regulations that generally implement ACA’s nondiscrimination requirements for wellness programs. The final regulations clarify and reorganize the rules outlined in previous proposed regulations and are intended to ensure that, regardless of the type of wellness program, every individual participating in the program should be able to receive the full amount of any reward or incentive, regardless of any health factor.
The regulations apply to both grandfathered and non-grandfathered group health plans and group health insurance coverage for plan years beginning on or after Jan. 1, 2014.