With all the delays and hiccups in ACA’s rollout, take stock of where you stand.
My late father used to tell me with sad prescience that at a certain age, one’s health can seem to fail in a temporally compact series of calamities. He said this at a time when he may have been anticipating the first domino falling. Given the string of bad news this year for supporters of health-care reform, it may seem like Obamacare has fallen and won’t be able to get up. The better bet, though, is probably that rather than suffering a broken hip, Obamacare is playing through a sprained ankle, and may be at full strength next season.
Given the pell-mell news of the fall, it makes sense to take stock of where employers stand in relation to their obligations under healt-care reform. The answer, as before the events of this fall, is different for large employers than for small.
Here is a partial scorecard for small employers (those with fewer than 50 full-time equivalent employees, employed an average of at least 30 hours per week):
- Small employers may choose not to provide health coverage for their employees. Failing to provide coverage will not subject a small employer to a federal pen-alty or additional tax.
- Small employers may, if they wish, purchase health insurance for their employees through a marketplace known as the Small Business Health Options Program (SHOP).
- Online enrollment in the SHOP marketplace, however, has been delayed to November 2014 (for use in purchasing coverage to be effective in January 2015). Small employers may, however, purchase coverage through the SHOP marketplace now by working through an insurance agent, broker, or insurance company that offers a SHOP marketplace plan.
- Certain small employers with fewer than 25 full-time equivalent employees may be eligible for a tax credit to help pay for health coverage for their employees.
- Small employers covered by the Fair Labor Standards Act (generally, those with at least one employee and at least $500,000 in annual dollar volume of business) must provide notice to their employees about the new health insurance marketplace and the possibility those employees may be eligible for a premium tax credit if they purchase coverage through the marketplace.
- Small employers may continue to receive the medical loss ratio rebates that insurance companies have been required to share when they do not spend a specified percentage of premium dollars on medical care.
- Starting January 1, 2014, small employers offering health coverage cannot impose a waiting period of more than 90 days.
- Some of the health reform rules are different for large employers (those with 50 or more full-time equivalent employees). Here are some of the rules for those large employers:
- Beginning in 2015 (but not for 2014, as originally scheduled), large employers that do not offer “affordable” health insurance (costing no more than 9.5 percent of household income) that provides “minimum value” (“bronze level” coverage) to all their full-time employees (and dependent children) may be required to pay an “assessment,” if at least one full-time employee is certified to receive a premium tax credit in the federal marketplace to buy individual health insurance.
- Most of the rules above that are applicable to small employers also apply to large employers, such as the requirement to provide a notice to employees about the insurance marketplace and limit waiting periods to 90 days. Large employers with insured plans may also receive medical loss ratio rebates.
- Employers required to file at least 250 Form W-2s in the prior calendar year must report (on Form W-2) the aggregate annual cost of employer-provided coverage for each employee.
The one year delay in the requirement that large employers provide health insurance for their full-time employees or instead pay an assessment is very welcome, but still leaves large employers with much work to do in preparing for this requirement for 2015.
Most urgently, employers need at this time to be tracking the hours of employees whose work schedules are variable. That is because the determination of which employees will be considered full-time in 2015 (and who therefore must be provided coverage to avoid an assessment) will turn on the hours they work in 2014, and potentially even the last quarter of 2013.