By Florence Olsen
An Obama administration announcement delaying some employer requirements under the Affordable Care Act means that employers may not need to worry for at least another year about the ACA's minimum value proposed rules, a benefits attorney said July 3, a day after the deadline for submitting comments on the minimum value rules.
The Obama administration announced July 2 that it will delay for one year new mandatory reporting requirements for employers and health insurers--as well as related employer shared-responsibility penalties (see story on p. 217).
Gretchen K. Young, senior vice president for health policy at the ERISA Industry Committee in Washington, D.C., told BNA that employers affected by the delay in the reporting requirements under tax code sections 6055 and 6056 and related employer penalties also may not have to comply with the minimum value standards for another year.
The minimum value standards will not matter for 2014 because the penalties will not apply, she said. For employees, however, minimum value “is still a relevant concern at this point unless, when we get the complete guidance, [it says] something different,” she said.
“There has been no change to the individual mandate or individual penalty for 2014,” she added.
Under current rules, an employee seeking subsidized coverage in an insurance exchange created under the ACA would still need proof that the employer's plan “didn't meet minimum value standards or, more importantly, wasn't affordable,” she said.
For 2014, minimum value standards are still relevant for employees but not for employers, Young said. “It's going to be difficult to reconcile,” she added.
In April, the Treasury Department and the Internal Revenue Service proposed rules (REG-125398-12) for determining whether health insurance coverage under an employer-sponsored group health plan provides mandatory “minimum value” under the ACA (64 BTM 148, 5/7/13). The proposed rules also covered health insurance premium tax credits provided under the ACA.
Even before the announced delay, at least one commenter already expressed concern about whether employees whose employers did not offer minimum value health insurance coverage would receive that information in time to apply for health insurance premium assistance tax credits.
Regarding proposed minimum value standards for employer-provided health insurance coverage, the Center on Budget and Policy Priorities said in a July 2 letter submitted to IRS that timely verification is important so that eligible employees and their dependents can apply for premium tax credits and health insurance exchange coverage provided under the ACA.
“If the employer's information is incorrect and the worker actually does not have an offer of coverage that meets minimum value, it is unclear how workers will be informed in a timely manner when this occurs,” CBPP said.
CBPP raised another concern about how the proposed rules on minimum value “will work in practice.” Commenting on the use of a government-provided minimum value calculator, CBPP questioned whether someone who is not an actuary would know whether a plan has “nonstandard” features not accounted for in the calculator and whether those features might materially affect the minimum value calculation.
CBPP suggested minimizing the burden of the minimum value rules on employers by requiring health insurers that market or offer plans to employers to calculate the minimum value of the products they offer. It also suggested the same be done by third-party administrators that contract with employers to administer their health benefits.
Text of the CBPP letter is available at http://op.bna.com/pen.nsf/r?Open=strg-999qlv.