ACA Update: Recent Changes May Affect Your BusinessNovember 18, 2014
Highlights of The Act and what potential changes are looming.
Implementation of the Affordable Care Act (ACA) continues to move forward. This year, much of the attention has focused on the shared-responsibility and information reporting requirements that generally will go into effect for large employers next year. But there are many other developments that employers need to be aware of. With the November 2014 elections shifting power, we shall keep you updated on any changes that may reverse or alter any existing ACA rules. Here are some highlights as the Act stands now.
Large Employers: Looking Back at Full-Time Employees
Under the shared-responsibility provision, large employers that don’t offer their full-time employees minimum essential health care coverage that is affordable and provides minimum value may be subject to a penalty beginning in 2015. Among the compliance complexities is identifying full-time employees.
This involves calculating employee hours either monthly or during a measurement period of up to 12 months beginning on a date selected by the employer — the look-back method. With this method, the hours are used to lock in full- or part-time status during a stability period of up to 12 months.
In September, the IRS proposed guidance on how to identify full-time status when there’s a change to the measurement period for an employee, such as when an employee moves into a new position. The guidance also covers employer elections to change from the look-back method to the monthly method (or vice versa).
Under the look-back method, the first stability period begins January 1, 2015. So it’s important for large employers to be prepared to select the method that’s most appropriate for them and correctly implement it.
Small Employers: Getting Credit for SHOP
The objective of the Small Business Health Options Program (SHOP) is to help small employers provide affordable health care coverage to their employees. The federal government’s SHOP website wasn’t up and running in time for small employers to enroll online for 2014 SHOP coverage. Instead, interested employers were directed to enroll on paper via an insurance broker or agent.
Beginning in 2014, SHOP enrollment was supposed to be an eligibility requirement for the small-employer health care tax credit. But due to problems with the federal website as well as many state websites, otherwise-eligible small employers may be allowed to claim the credit for 2014 without SHOP enrollment in certain circumstances.
Online enrollment will be available for 2015 SHOP coverage beginning November 15, 2014. This means, however, that only employers that enroll in SHOP online will potentially be eligible for the credit for 2015. Keep in mind that eligibility requirements for SHOP and the credit differ, which means even if you’re eligible to enroll in a SHOP plan you may not be eligible for the credit.
Employers of Any Size: Keeping an Eye on Changes
Here are a few recent developments that will affect many employers, regardless of size:
Excepted benefits. The ACA “excepts” some benefits from certain requirements that otherwise apply to health plans. Recently, final regulations were issued affecting when self-insured dental, vision, and long-term care (LTC) coverage and employee assistance programs (EAPs) will be considered excepted benefits.
90-day waiting period limit. The ACA reduced the maximum waiting period for health care coverage to within 90 days of an employee’s start date. Earlier this year, final regulations on the waiting period limit — and on orientation periods in relation to the waiting period — were released.
New election changes for cafeteria plans. The IRS recently added two additional times when mid-year election changes will be allowed: 1) when an employee’s hours of service have been reduced to less than 30 hours per week without a corresponding loss of eligibility for the employer’s group health plan, and 2) when an employee would like to change from the employer’s group health plan to Health Insurance Marketplace coverage without a period of duplicate coverage or no coverage.
Assess the Impact
It’s important to review these changes and how they affect your benefits offerings. The rules are complex and a number of factors need to be considered to ensure compliance, stay within your budget and provide the benefits options that are best for your company and its employees.
Please contact us for more information on the potential impact of these and other ACA developments on your company.