5 Healthcare Reform Dates Every Business Needs to Know
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While several provisions of the new Affordable Care Act (ACA) have already gone into effect, there are several key dates business owners need to be aware of in the coming months and years. We’ve compiled a list, as well as several useful resources, to help you navigate important health care reform milestones.
1. January 1, 2013 The ACA will limit the amount of participant pre-tax dollars that can be used to cover health expenses through flexible spending accounts (FSAs). FSA PARTICIPANTS WILL HAVE A SALARY REDUCTION LIMIT OF $2,500 FOR PLAN YEARS BEGINNING ON OR AFTER JANUARY 1, 2013.1 All employers that issued at least 250 Form W-2s in 2011 will need to report the value of health care coverage that employees participated in during the 2012 plan year on the employee’s Form W-2. Some items, such as stand-alone dental, vision, and health savings account contributions, are excluded from this reporting requirement. Although the value must be reported, it is not taxable for the business or employee.2 FUTURE REGULATORY GUIDANCE COULD REQUIRE SMALL BUSINESSES WITH FEWER THAN 250 EMPLOYEES TO MEET THE W-2 REQUIREMENT.2 Employers will no longer be able to deduct retiree Part D retiree drug subsidy payment.3 drug expenses for which they receive a Medicare 2. March 1, 2013 Employers subject to the Fair Labor Standards Act are required to notify employees of state health insurance exchanges and potential eligibility for premium credits. Each U.S. state must establish a health insurance exchange by January 1, 2014, that provides a marketplace for individuals and small employers. The U.S. Department of Health and Human Services (HHS) will operate a federally- facilitated exchange (FFE) for states that do not establish an exchange, and premium tax credits will be available for those who buy individual coverage in an exchange.3 THE KAISER FAMILY FOUNDATION OFFERS ADDITIONAL INFORMATION ABOUT EXCHANGES AT KFF.ORG; HOWEVER, NO GUIDANCE HAS YET BEEN PROVIDED BY DOL FOR THIS REQUIREMENT. 3. January 1, 2014 Employers with at least 50 full-time employees must offer minimum essential health coverage to their full-time employees or face a penalty.3 $2,000 — IF THE EMPLOYER DOES NOT OFFER MINIMUM ESSENTIAL TO ALL FULL-TIME (30 HOUR) EMPLOYEES, AND AT LEAST ONE EMPLOYEE OBTAINS A PREMIUM SUBSIDY THROUGH AN EXCHANGE, THE PENALTY IS $2,000 PER YEAR, PER FULL-TIME EMPLOYEE, EXCLUDING THE FIRST 30 EMPLOYEES.3 $3,000 — A FINE OF $3,000 PER EMPLOYEE PURCHASING COVERAGE THROUGH AN EXCHANGE AND RECEIVING FEDERAL AFFORDABILITY TAX CREDITS FOR COVERAGE IS THE PENALTY FOR A BUSINESS OFFERING MINIMAL ESSENTIAL COVERAGE TO ALL FULL- TIME (30 HOUR) EMPLOYEES, BUT THE COVERAGE IS DEEMED UNAFFORDABLE OR DOES NOT PROVIDE AT LEAST 60 PERCENT ACTUARIAL VALUE.3 Required Contribution to the Temporary Reinsurance Program During the first three years the exchanges are available (2014–2016), a temporary reinsurance program for the individual insurance market will be funded by a required contribution from all group major medical plans. The per capita amount is paid for each enrollee by the insurer or third- party administrators on behalf of self-funded plans. Additional guidance regarding this contribution is expected in October 2012.3 Small Business Tax Credit Changes Small business tax credits will expand to 50 percent of a small business’s premium costs for two consecutive years. These credits are available to businesses with average wages between $25,000 and $50,000, and fewer than 25 full-time workers (or 50 half-time workers) that offer health insurance through a health insurance exchange.4 Second Wave of Health Care Reforms In addition to these milestones, there will be a second wave of health care reforms that are effective for group health plans, including:3 Pre-existing condition exclusions will no longer be permitted. More information regarding this wave of reforms is expected as January 1, 2014, approaches. 4. January 1, 2015 Your business will be required to report information regarding the health coverage of your employees, including basic employee data, dates and type of coverage; cost-sharing; and any other information required by the IRS. These requirements apply to coverage offered on or after January 1, 2014, but the first report will not be due until 2015. More information on the requirement and its regulations is expected as January 1, 2015, approaches.5 5. January 1, 2018 A tax will be imposed on insurers and employers with self-funded health plans with annual premiums that exceed $10,200 for individuals and $27,500 for families.6 THE CADILLAC TAX IS 40 PERCENT OF THE EXCESS OF THE ANNUAL VALUE OF A HEALTH PLAN’S COST ABOVE THE THRESHOLD AMOUNTS SET FORTH ABOVE.6 To learn more about health care reform and coverage available in your state, visit healthcare.gov, cciio.cms.gov and irs.gov. Milestones Already In Place: Availability of small business tax credits: If you offer your workforce health insurance and employ fewer than 25 full-time workers (or 50 part-time workers), your business may be eligible for the Small Business Health Care Tax Credit.4 For more information about these credits visit irs.gov/newsroom/article/0,,id=223666,00.html. JANUARY 1, 2011 Availability of SIMPLE cafeteria plans: SIMPLE cafeteria plans are a new way for small businesses with 100 or fewer employees to save money. These plans allow employees to pay their portion of health insurance premiums and other eligible benefits, such as contributions to flexible spending accounts, with pre-tax dollars. As an employer, you can take advantage of this option to save on the employer portion of FICA, FUTA and workers’ compensation insurance premiums.1 AUGUST 1, 2012 Women’s preventive care requirements: Nongrandfathered group health plans are required to offer preventive coverage to women without cost-sharing for plan years beginning on or after August 1, 2012. Certain religious employers are exempt from the requirement to offer contraceptive coverage, and others may qualify for a one-year delay.7 Medical Loss Ratio rebate distribution: Major medical insurers that did not meet the new medical loss ratio (MLR) requirements were required to issue rebates to policyholders by August 1, 2012. In most cases, it is the employer’s responsibility to distribute the participant portion within three months of receiving the rebate. If your plan was due a rebate, you should have received it by now and may need to distribute employee portions. The details on distribution depend on the type of plan offered (e.g., church plan, ERISA, etc.).8 For more information, visit these websites: Department of Labor SEPTEMBER 23, 2012 New summary of benefits: Major medical insurers began sending all benefits enrollees and applicants a new summary of benefits booklet and coverage notice to explain their benefit plans and coverage. If your business has a self-funded plan, you will be required to provide the new summary for annual enrollment periods on or after September 23, 2012, as well as all other enrollments for plan years beginning on or after January 1, 2013.9 Try these helpful sites: Department of Labor sample template: dol.gov/ebsa/pdf/SBCSampleCompleted.pdf OCTOBER 1, 2012 Patient-Centered Outcomes Research Institute (PCORI) fee: Starting with plan years ending on or after October 1, 2012, issuers and plan sponsors will be required to pay a new fee for each covered beneficiary with the fee going to the PCORI fund. The funds will help contribute to research that evaluates and compares health outcomes and clinical effectiveness, and the risks and benefits of two or more medical treatments and/or services. Since the fee is treated as an excise tax, it is filed through IRS Form 720. Payment of the fee for the first year is due July 31, 2013.10 ??????THE PCORI FEE IS $1 PER COVERED BENEFICIARY FOR THE FIRST YEAR.10 SOURCE 1 Internal Revenue Service (2012), Section 125 Cafeteria Plans, accessed on September 25, 2012, from irs.gov/pub/irs-drop/n-12-40 Related Documents |
