Notification to employees. Employers must inform all current employees and any new hires after this date about the existence of Covered California and how employees can access it. Check calrest.org in summer for new information from the Labor Department has indicated it will issue guidance and a template about how the information must be provided.
FICA tax increases. Beginning in 2013, taxpayers with incomes more than $200,000 (single) or $250,000 (married filing jointly) will pay increased taxes on the Medicare Contribution Tax (3.8% on unearned income) and the Medicare Hospitalization Insurance tax (.9% tax increase for employee). There are discussions about altering or delaying these taxes, but no changes have been made yet.
Flexible spending accounts limited. Beginning in 2013, employees’ contributions to flexible spending accounts can be no more than $2,500.
Covered California opens enrollment. Beginning Oct. 1, 2013, individuals will be able to enroll in coverage purchased on the exchange for plans beginning Jan. 1, 2014. Employees going to the exchange for coverage will be asked to provide:
Employer contact information and identification number.
Whether the applicant is employed on a full-time basis.
Whether the employer offers minimum essential coverage (affordable and of minimum value).
And if so, the required employee contribution to the employer’s lowest-cost plan.
Employer mandate. Employers with 50 or more full-time-equivalents must offer “minimum essential coverage” to all employees who average 30 or more hours a week in a given month, or potentially be liable for penalties. How calculations are made, how often, and how penalties will be assessed is the subject of current regulatory action by the Department of Treasury.
Automatic enrollment. Employers with 200 or more full-time employees must automatically enroll their full-time employees into one of the plans the employer offers after the applicable waiting period. However, the Department of Labor has concluded that its automatic-enrollment guidance will not be ready to take effect by 2014. It remains the Department of Labor’s view that, until final regulations under Fair Labor Standards Act Section 18A are issued and become applicable, employers are not required to comply with FLSA Section 18A.
90-day waiting period. All group health plans are allowed up to a 90-day waiting period before offering coverage. The IRS in August 2012 offered preliminary guidance on implementation of the 90-day rule.
Individual mandate. The law requires most individuals to obtain basic health insurance coverage, through their employers, Covered California, Medicaid, Medicare, MediCal or elsewhere, or face an annual tax penalty. In 2014, the tax penalty will be $95 for not obtaining minimum coverage.
Exchange reinsurance fee. From 2014 to 2016 health insurers and self-funded plans will contribute to a fund that will be used to make sure the exchanges function properly. This will be accessed on a per-capita basis of $5.25 a month or $63 in the first year. For smaller employers, this cost may be passed down to you.
Covered California may grow. From 2014 to 2016, only individuals and small group employers are eligible to participate in the state exchanges; beginning in 2017, states may elect to allow large group plans (100-plus) to be sold on the exchange as well. States may also form regional exchanges.
Cadillac plans. Beginning in 2018, the law imposes a new 40 percent excise tax on the value of coverage that exceeds certain dollar thresholds. For 2018, the dollar thresholds for the excise tax are $10,200 for individual coverage and $27,500 for family coverage.
Find quick answers to your questions about the CRA and navigating calrest.org.