I fully expected HHS to make a major announcement regarding the ACA, but not the one we received via White House and Treasury blogs on July 2 announcing employers would be off the hook for employer supported mandates in 2014. Special Advisor (to the President) Valerie Jarrett spoke early Tuesday evening and said the individual mandate is still in force and that everything is “full-steam ahead” to open health insurance marketplaces (formerly exchanges) on October 1 of this year. This strikes me, quite frankly, as nonsensical.
While employers have been complaining loudly (and with good reason) for the last 4 years, they are at minimum the group best prepared for ACA final implementation. Were employers who utilize part-time workers as the bulk of their labor force (fast-food, retail, theater chains, etc.) teed up for a beating and hard times as they re-casted their business models? Sure, but this has been known almost since the beginning, and they have legions of skilled HR pros, attorneys and health insurance experts preparing them for the inevitable, now known as January 1, 2015.
The individual citizen, however, is at the opposite end of the spectrum. According to the Gallup organization, nearly half of the adult population thinks the ACA was either repealed by Congress, over-turned by the Supreme Court, or does not apply to them. This is not a backdrop for success. Further, the Government Accounting Office reported two weeks ago that HHS could not prove it was prepared to open health insurance markets on October 1 in the 26 states using only federal marketplaces. Add intimidating enrollment forms that look more like a tax filing documents and you have a recipe for mass confusion and grave disappointment. I still expect HHS to back off of the October 1 health insurance marketplace roll-out.
Now that I’m finished with my rant (and no, it was not cathartic), here is what has been delayed and, more importantly, what has not.
Delayed: The Pay or Play provision for employers
Employers with 50 or more employees do NOT have to do the following until January 1, 2015:
- Offer minimum essential coverage to 95 percent of full-time employees
- Offer minimum actuarial value (60 percent) coverage to full-time employees
- Offer affordable (less than 9.5 percent of W2 Box 1 income) coverage to full-time employees
- Consider employees who average 30 or more hours per week full-time for purposes of their health plan
- Count employees’ hours to determine whether they average 30 or more hours work per week
Because of the delay, employers will not need to meet these requirements for 2014
Still in Force: Employer sponsored insurance plan provisions
- Waiting periods cannot be more than 90 days from the date the employee becomes eligible
- All pre-existing condition limitations must be removed
- The out-of-pocket maximum cannot exceed $6,350 for individual and $12,700 for family coverage
- Essential health benefits may not have annual dollar limits
- Grandfathered plans must cover dependent children to age 26 even if the child has access to his/her own employer-provided coverage
- The new wellness program requirements
- For small insured plans, whether in or outside the shop marketplace (exchange), coverage must include the essential health benefits, at the bronze, silver, gold or platinum level, with a deductible of not more than $2,000 for individual and $4,000 for family coverage
- For small insured plans, whether in or outside the Shop marketplace, modified community rating (rating classes are limited to age, tobacco use, family size and geographic area), guaranteed issue and guaranteed renewal (with some limitations) will apply
And don’t forget the rest that remains:
- Reporting and payment of the PCORI fee by July 31, 2013 for plans that ended Oct. 1, 2012 through Dec. 31, 2012
- Timely distribution of any MLR rebates the plan may receive
- Providing a Summary of Benefits and Coverage (SBC) as part of open enrollment
- Distributing the DOL notice regarding the exchange by Oct. 1, 2013
- Reporting health care costs on the employee’s W-2 (the exemption for employers that issued fewer than 250 W-2s in the prior year or that contribute to a multiple employer plan will continue for the 2013 W-2)
- Paying the transitional reinsurance fee, due in January 2015
Still left unanswered, and perhaps may be addressed when the guidance that Treasury has promised comes out, is how employee eligibility for subsidies in the health insurance marketplaces will be determined in the absence of any employer requirement for an affordable plan.
Stay tuned for updates as they develop.