Montage Insurance: What employer groups need to know now about health care reform Featured

4:00am EDT July 31, 2013
Tobias Kennedy, Executive vice president, Montage Insurance Solutions Tobias Kennedy, Executive vice president, Montage Insurance Solutions

There has been an overwhelming amount of news surrounding the health care reform bill, the Affordable Care Act (ACA), and now there’s more talk that Washington, D.C., might try and kill it. Again.

“As much as companies don’t want to admit, it is truly now time to say, ‘This thing is here to stay and I need to know what to do about it,’” says Tobias Kennedy, executive vice president, Montage Insurance Solutions.

With the employer shared responsibility penalties delayed until 2015, the keyword is delayed — not eliminated.

“With the early Fourth of July present the administration announced for us, there is a bit of a ‘dry run’ opportunity that really benefits a lot of companies,” he says.

Smart Business spoke with Kennedy about what the delay of the penalties means for employer groups.

With the delay, what do employers need to keep in mind going forward?

No. 1: This really isn’t the time to hit the snooze button for 12 months. The delay shouldn’t be seen as an opportunity to waste another 12 months in figuring out compliance. It should be used as a practice run to see if you’re in compliance, and if not, what steps need to be taken to correct your course.

No. 2: Just because the employer shared responsibility provision was delayed, it doesn’t mean the ACA was delayed. If you’re an employer group, you still have requirements.

You won’t be penalized for failing to offer insurance or failing to offer affordable coverage, but that doesn’t get you off the hook for the mandatory issuance of the employees’ rights in the exchange notification, or certain plan design changes. Be sure you are working with your consultant(s) to be totally clear on exactly which provisions were delayed and which have action items pending in the near future. 

While most companies know, at least in broad strokes, that large employers will soon be responsible for providing affordable coverage, there is more to the employer shared responsibility. Again, the best time to figure out the intricacies is during a practice year — not when there are penalties looming and a hungry IRS over your shoulder. 

What should employer groups specifically be doing in 2014?

Aside from figuring out what you need to do in the short term, such as identifying the parts of the ACA that were not delayed as they relate to your insurance plans, use 2014 to really get a handle on a few questions:

  • Are you a large enough employer that you need to offer coverage?
  • If you are large enough, what type of coverage is compliant and what are you allowed to charge your employees for this compliant coverage?
  • To whom do you need to offer coverage? If it is not as simple as ‘everyone works from 8 a.m. to 5 p.m.,’ then you may have some variable hour employees who straddle the line of part-timer and full-timer. These employees may be technically over the 30-hour threshold, so you’ll want to be sure you know which people in your population you would be legally required to offer benefits to.

Tobias Kennedy is an executive vice president at Montage Insurance Solutions. Reach him at (818) 676-0044 or toby@montageinsurance.com.

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