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The U.S. Supreme Court's decision upholding key provisions of the Patient Protection and Affordable Care Act means that the law's implementation will proceed and should serve as a wake-up call to those employers that have deferred action to comply with the act's requirements in the hope that it might be invalidated.
The court announced the long-awaited decision June 28 in a ruling that impacts employers, health care providers, insurance companies, and individual taxpayers (63 BTM 209, 7/3/12).
Certain provisions of PPACA will have a profound impact on employer-sponsored group health plans, particularly the employer shared responsibility requirement. Beginning in 2014, employers with at least 50 full-time employees must make available affordable coverage to their workers or face exposure to tax penalties.
In addition, for the first time, fully insured plans will be subject to nondiscrimination requirements. The law also affects waiting periods and, for larger plans, mandates automatic enrollment.
Below is a summary of the major deadlines for employer-sponsored group health plans and significant plan design and administration considerations to help practitioners and their clients.
By Nadia Masri and Sharon F. Fountain
|W-2 Reporting||2012 Form W-2||Include, for informational purposes, the cost of employer-sponsored health insurance coverage. If no exception applies under interim guidance, employers should begin or continue putting procedures in place to track, calculate, and provide the information required.|
|Medical Loss Ratio Rebates||Aug. 1, 2012||Procedures in place to handle any rebates received from the insurer in accordance with the rules for distribution, including the rules requiring ERISA plans to determine the extent to which rebates are plan assets. Rebates need to be apportioned if premiums are paid with both employer and employee contributions.|
Preventive Health Services
|Aug. 1, 2012||Nongrandfathered group health plans provide recommended preventive health services without cost-sharing and adjust services covered in accordance with changes to recommended preventive services guidelines.|
|Summary of Benefits & Coverage||Sept. 23, 2012||Self-insured plans and insurance issuers (or the insured plans to which they provide coverage) supply a summary of benefits and coverage (SBC) explanation to participants and beneficiaries in addition to summary plan description. Plans need to be sure that compliance procedures are in place sufficiently in advance of the open enrollment deadline.|
|Quality of Care Reporting||After guidance is issued||After agencies develop reporting requirements for nongrandfathered plans to disclose information regarding plan or coverage benefits and health care provider reimbursement structures, plans make the annual report available to enrollees during each open enrollment period. If agency guidance is issued soon, plans might need to report during their fall 2012 open enrollment period for 2013.|
|Nondiscrimination Rules||After guidance is issued||Expect agency guidance regarding the prohibition against nongrandfathered insured plans discriminating in favor of highly compensated individuals. Plans will have to comply for “plan years beginning a specified period after issuance” of the guidance.|
|Annual Limits||Dec. 31, 2012||Plans that choose to extend waivers of restricted annual limits, resubmit application information by this date.|
|Flexible Spending Arrangements||Jan. 1, 2013||Cafeteria plans must be amended to provide that employees may elect no more than $2,500 (adjusted for inflation for 2013) in salary reduction contributions to a health FSA.|
|Retiree Prescription Drug Expenses||Jan. 1, 2013||Employers cannot take a deduction for the subsidized portion of expenses.|
|FICA Tax||Jan. 1, 2013||Systems must be modified to provide for increase in HI portion of FICA by 0.9% for employees with wages in excess of $200,000 ($250,000 for a joint return).|
|Notice of Exchange Option||March 1, 2013||In accord with agency guidance to be issued, employers will have to provide notice to employees of the existence of state exchanges and options and implications of obtaining health care through an exchange.|
|Comparative Clinical Effectiveness Research Fees||July 31, 2013||First temporary fees imposed on self-insured health plan sponsors (tax code Section 4376) and insurers for insured plans (Section 4375) paid by this date (pursuant to proposed regulations).|
|Plan Communications With Providers||Dec. 31, 2013||By this date, plans must certify and document compliance with HHS rules for electronic transactions between providers and health plans.|
|Employer Shared Responsibility Excise Tax||2014||Employers with 50 or more full-time employees must provide health insurance that meets affordability and value requirements or pay a penalty of the lesser of $2,000 per employee (minus 30 employees) or $3,000 per exchange-certified employee. Employers should make a cost/benefit analysis of their current plan and possible alternatives, but no meaningful decisions should be made until IRS and HHS issue guidance containing definitions, calculations, and safe harbors.|
|High-Cost Health (“Cadillac”) Plans||2018||Sponsors will have to pay an excise tax calculated on the excess value of coverage.|
|Other Requirements||Employers must comply with other health plan-related requirements for which implementing guidance has not yet been issued: (1) notices regarding whether the health coverage offered qualifies as minimum essential coverage; (2) automatic enrollment required for employers with more than 200 full-time employees; (3) restricted annual limits on essential health benefits do not apply beginning in 2014; (4) cafeteria plans of employers with 100 or fewer employees may offer coverage of full-time employees through an exchange; (5) pre-existing condition exclusions for adult enrollees and other discrimination based on health status not permitted; (6) wellness program restrictions not permitted; (7) waiting periods greater than 90 days not permitted.|
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