Changes and clarifications handed down from the government
Many business-specific requirements under the health care law are still being modified, but most have been defined. Learn which requirements affect your business and what you have to do to comply.
Changes to the administration of health care plans
New administrative changes being rolled out by 2014 include the following:
Coverage reporting becomes mandatory in 2013.
Starting in January 2013 (for tax year 2012) employers with more than 250 W-2 forms must annually report to the federal government whether they offer health coverage to their full-time employees and dependents, the total number and names of full-time employees receiving health coverage, the length of any waiting period and other information about the plan’s cost. Reporting this information is currently optional for smaller employers filing fewer than 250 W-2 forms until further guidance is issued.
Flexible Savings Accounts (FSAs), Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) are being reduced.
Starting Jan. 1, 2011, reimbursements from FSAs, HRAs and HSAs are available only for insulin and for prescribed medicine or drugs. FSA, HRA or HSA dollars may still be used for over-the-counter medicines if they are prescribed. Starting Jan. 1, 2013, annual contributions to FSAs will be limited to $2,500 and the penalty for withdrawing HSA funds for non-medical expenses increases by 20 percent.
Employers are responsible for giving more notice to employees.
Beginning in late summer or early fall 2013, employers must provide employees written notice of:
- The existence of Covered California.
- Potential eligibility for federal assistance if the health plan offered by your business is “unaffordable” based on criteria under the health care law and if the employee household income is below certain thresholds.
- Possible loss of employer contribution to health coverage if employees choose to purchase health insurance through Covered California’s Individual Exchange.
Provisions of grandfathering will be made clear.
To maintain grandfathered status, the insurers or group health plans must include a statement in any materials provided to enrollees describing the policy that is grandfathered.
A Summary of Benefits and Coverage is mandatory.
Effective Sept. 23, 2012, self-insured plan sponsors and insurers must provide participants at initial and annual enrollment with a uniform Summary of Benefits and Coverage (SBC) explanation that includes standardized information. Learn more about SBC Requirements.
New protection from discrimination for employees
Effective March 23, 2010, employers are prohibited from discharging or discriminating against any employee for receiving a federal tax credit or cost-sharing subsidy to purchase health insurance.
Nursing mothers get reasonable break time
Starting in 2010, employers must provide a reasonable break each time the employee needs to express milk for up to one year after the birth of her child. Employers must provide nursing mothers a place to express milk – other than a bathroom – that is shielded from view and free from intrusion from coworkers and the public.
- An employer with less than 50 employees is not required to comply if the requirement would impose significant difficulty or expense.
New incentives for employer responsibility take effect in 2014
The health care law does not require employers to provide health insurance for their employees, and there are no fees whatsoever for employers with fewer than 50 employees that do not provide health insurance. However, employers with 50 or more full-time equivalent employees or employers that do not offer insurance, offer insurance that is unaffordable or offer coverage that does not meet minimum value standards will be subject to a fee beginning in 2014.
Fees for not meeting the coverage requirement
- If the employer does not offer coverage and at least one employee receives a subsidy in Covered California’s Individual Exchange, the fee is $2,000 annually times the number of full-time employees not counting the first 30 employees.
- If the employer offers coverage but its insurance plan is inadequate or unaffordable, employees can choose to buy coverage in Covered California’s Individual Exchange and receive a premium tax credit. The fee to the employer is $3,000 annually for each full-time employee receiving the credit, up to a maximum of $2,000 times the number of full-time employees not counting the first 30 employees. (This is the same as the maximum for employers who do not offer coverage.)
- An insurance plan is deemed “inadequate” if it does not pay at least 60 percent of health care expenses.
- An insurance plan is deemed “unaffordable” if employees have to pay more than 9.5 percent of family income to purchase it.
Starting in 2014 employers with more than 200 full-time equivalent employees that offer health coverage will be required to automatically enroll new full-time employees in the plan. An employee may opt out of coverage.
Content provided in partnership with Health Law Guide for Business.