How the Affordable Care Act changes will affect employers

With so many provisions and mandates under the Affordable Care Act (ACA), it is not surprising some things have changed or been delayed along the way.

In fact, on July 5 the Obama administration released a 606-page document with final regulations on some of the ACA’s key provisions and mandates. In addition to providing new details about how the health insurance marketplaces will operate beginning Oct. 1, the document included changes that will impact the way employers shop for insurance. 

Separately, on July 2, the U.S. Treasury issued guidance delaying the penalties to be imposed on large employers that fail to provide coverage to full-time workers and also reporting requirements applicable to insurers and self-insured businesses.   

“When you are looking at changes impacting the health care delivery system in this country — including the way health insurance companies do business — delays and changes are expected,” says Marty Hauser, CEO of SummaCare, Inc. “The best thing employers and individuals can do is to stay informed and make the best decisions possible when it comes time to shop for a benefit plan.”

Smart Business spoke to Hauser about some of these changes and delays and what they mean for employers.

What are some ACA mandates that have been delayed that directly affect employers?

Components of the employer mandate have been delayed until 2015 to give employers more time to prepare for changes and requirements. The mandate, often referred to as ‘pay or play,’ requires employers with 51 or more employees to offer health insurance or risk paying a penalty. The delay of the mandate’s penalty portion gives employers an additional year to consider their options for offering insurance.  

While some people argue that the delay in penalties effectively delays the entire mandate, it’s important to note that the mandate for large group employers to offer insurance still exists, but with no penalty for not complying. It is in the employer’s best interest to work with their broker, benefits consultant or insurer in an effort to comply with the law and figure out the best solution next year and in preparation for 2015. 

At the time of this printing, this delay in the employer mandate does not change the individual mandate, effective Jan. 1, 2014. 

A delay impacting small employers (with up to 50 employees) has also occurred related to the Small Business Health Options Program (SHOP). The functionality enabling employers to offer employees a variety of qualified health plans (QHPs) from different carriers has been delayed until 2015. This means that in 2014, small group employers may only offer one QHP to their employees shopping through the marketplace in an effort to give the exchange additional time to prepare. 

It’s also important to mention that the SHOP is available to employers with up to 50 employees in 2014 and 2015, and expands to include employers with up to 100 employees in 2016.

What should employers keep in mind as they see marketing campaigns about the changes that become effective next year?

First and foremost, employers should work with their broker, benefits consultant, or insurer to help determine what mandates and provisions of the ACA apply in 2014 and beyond, in order to make the best benefits decisions for their employees and budget. They should also be prepared to receive and answer questions from employees regarding coverage in the coming year. 

Additionally, since marketplaces open Oct. 1, 2013, for 2014 effective dates and employers are required to notify employees of the availability of the health insurance marketplace by the same date (Oct. 1), employees will likely be looking to their employer for guidance on coverage options and want to know what their employer plans to do by way of offering benefits.  Employers should be ready to educate their employees on how the new laws will or will not affect them and their benefits.

It’s also important to remember that although the penalty portion of the employer mandate has been delayed, there are ACA requirements employers must still meet, including reporting and payments, marketplace notification, distribution of Summary Benefits and Coverage documents upon renewal or enrollment, and distribution of rebates, when applicable.

Marty Hauser is CEO at SummaCare, Inc. Reach him at [email protected].

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Insights Health Care is brought to you by SummaCare, Inc.