Monday, July 8, 2013

What the Obamacare Delay Means Right Now

On July 2, 2013, the Department of the Treasury and the White House announced via social media that the employer reporting requirements and employer shared responsibility/play-or-pay penalty are being delayed until 2015.  Here are the key points employers need to know right now:

The shared responsibility/play-or-pay provision requires employers with 50 or more full-time or full-time equivalent employees to offer affordable, basic (defined as being of a specified minimum value) coverage to most employees who work at least 30 hours per week.  If they don’t, they must pay a penalty.  That requirement was supposed to take effect on January 1, 2014, although employers that met certain transition requirements could delay compliance until the start of their 2014 plan year.  Also, extensive reporting requirements were expected to kick in.

The Treasury Dept. and White House blogs state that the reporting requirements will be made public later this summer, that reporting will not be required until 2015, and that the play-or-pay mandate also will be delayed until 2015 because it’s not possible to assess or enforce employer penalties without knowing what the reporting requirements are.

So, what’s still required?  For starters, delaying the play-or-pay requirement does not affect the insurance market reforms.  At least for the time being, those requirements remain scheduled to go into effect at the start of the 2014 plan year, and penalties for non-compliance can be up to $100 per person per day.  The requirements include:
  • Waiting periods cannot be more than 90 days from the date the employee becomes eligible;
  • Pre-existing condition limitations must be removed;
  • Out-of-pocket maximums cannot exceed $6,350 (individual) / $12,700 (family);
  • Essential health benefits may not have annual dollar limits;
  • Grandfathered plans must cover dependent children to age 26;
  • New wellness program requirements;
  • Small insured plans must cover essential health benefits at the bronze, silver, gold, or platinum level with a deductible of not more than $2,000 (individual) / $4,000 (family); and
  • Small insured plans are subject to modified community rating (rating classes are limited to age, tobacco use, family size and geographic area), guaranteed issue and guaranteed renewal (with some limitations).

Other Obamacare requirements that remain in place include:  reporting and payment of the PCORI fee by July 31, 2013, for plans that ended during the last quarter of 2012; timely distribution of any MLR rebates; providing a Summary of Benefits and Coverage as part of open enrollment; distributing by October 1, 2013, the Dept. of Labor notice regarding the healthcare exchange; reporting healthcare costs on employees’ W-2 forms (unless employer had fewer than 250 employees in the prior year or contributed to multi-employer plan); and paying the transitional reinsurance fee, currently due in January 2015.

No comments: