Delayed Affordable Care Act Rules Ease Pressure on Employers, Attorney Says

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By Florence Olsen  


Employers face an open enrollment period for 2014 under far less pressure because of a one-year delay of potential employer penalties under the Affordable Care Act, an ERISA Industry Committee (ERIC) vice president told BNA July 9.

Despite the delay, for which the Internal Revenue Service provided guidance July 9, employers subject to ACA's health coverage provisions still must provide information about affordability and minimum value requirements that apply to employer-provided health care coverage, according to Gretchen K. Young, ERIC's senior vice president for health policy in Washington, D.C.

But “the pressure is off” for a year in terms of employers being subject to excise tax penalties for having full-time employees who receive subsidized coverage in one of ACA's health insurance marketplaces, Young said.

Young said a Department of Health and Human Services final rule released July 5, which included procedures for the health insurance marketplaces to use in verifying individuals' access to employer-sponsored coverage, will further decrease the burden on employers subject to ACA's provisions.

As a consequence of the modified verification procedures described in the HHS final rule, more employees might receive subsidized health insurance coverage in 2014 than otherwise would have, but employers “will be less concerned because the subsidies won't trigger a penalty for 2014,” she said.

Because of the scaled-back verification process in the HHS final rule, employers also will receive fewer requests “for verifying employee attestations” about their eligibility for affordable, minimum value health insurance coverage from an employer, she said.

Notices to Employees

Employer notices to employees about enrollment options available through ACA's newly established health insurance marketplaces will not be affected by the one-year delay in employer reporting requirements under tax code sections 6055 and 6056 and a related delay of potential tax penalties under Section 4980H, Kathryn Wilber, senior counsel for health policy at the American Benefits Council (ABC) in Washington, D.C., told BNA July 9.

Wilber said those employee notices, due by Oct. 1, are outside the scope of the tax code provisions that the Treasury Department delayed. The notices must inform employees that they might be eligible for subsidized health insurance through the ACA marketplace if their employer's offer of coverage does not provide minimum value.

The notice requirement with respect to minimum value is somewhat unclear, Wilber said. However, she added, based on recent statements made by a Department of Labor official during a webinar sponsored by ABC, DOL wants the notices to be as useful as possible to employees.

“They would encourage employers to provide plan-specific information so that employees know whether their own plan provides minimum value,” Wilber said.

The one-year delay in enforcing ACA's employer shared-responsibility provisions was both welcome and disruptive, Amy M. Gordon, a partner at McDermott Will & Emery in Chicago, told BNA July 8.

Retail and other employers that had set up procedures for keeping track of hours worked by their variable hour employees in 2013 will have to discard the data already collected and start again in 2014, Gordon said.