Patient Protection and Affordable Care Act (PPACA) Update
New Hires must receive ACA notice
There is a new employer deadline under the Affordable Care Act that you must be aware of. Starting October 1, 2013 “ New Hires – Employers must provide the notice to each new employee at the time of hiring beginning Oct. 1, 2013. For 2014, the DOL will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.
Current Employees – With respect to employees who are current employees before Oct. 1, 2013, employers are required to provide the notice no later than Oct. 1, 2013.”
See the section “Model Exchange Notices – “in the linked insurance industry newsletter: Click Here››
Health Benefit Exchange
Notice & Guidance Published
On May 6, the U.S. Department of Labor published guidelines for employers required to provide notice to employees about the availability of health benefit exchanges (known in California as "Covered California").
DOL earlier in 2013 delayed the employer notice requirement (see Deadline for Notice of Health Exchange Availability Delayed, FELS Newsletter, February 2013).There are two different forms, one for employers offering coverage and one for employers not offering coverage, and this is yet another paperwork burden imposed on employers. And while employers will not be required to provide this notice until October 2013, since Covered California is not yet accepting enrollments furnishing this notice earlier will likely trigger a blizzard of questions no one can answer yet.
The Department of Labor's Employee Benefits Security Administration updated its Affordable Care Act web page with the following information on the notice to employees of coverage options:
- Technical Release 2013-02 - Guidance on the notice to employees of coverage options under FLSA §18B and updated model election notice under COBRA, available at http://www.dol.gov/ebsa/newsroom/tr13-02.html
- Model notice for employers who offer a health plan to some or all employees, available at http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
- Model notice for employers who do not offer a health plan, available at http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
- COBRA model election notice, available at http://www.dol.gov/ebsa/modelelectionnotice.doc
- COBRA model election notice redline version (to show May 2013 changes), available at http://www.dol.gov/ebsa/modelelectionnoticeredline.doc
Required Employer Notices
Employers are required to provide their employees with a written notice about the State Health Exchanges and to explain some of the benefits and consequences to employees if they choose to purchase a qualified plan through the State Exchange, as opposed to electing for coverage under an employer-sponsored health plan. The "Exchange Notice" requirement applies to all employers covered by the Fair Labor Standards Act and must be distributed, in writing (electronic or hard copy). The DOL has delayed the Employer Exchange Notice provision, until the final regulations are released - Read more:DOL FAQ. Previously DOL had announced that the notice requirement was by March 1, 2013.The notice must include:
1. Services provided by the exchange.
2. Contact information for the exchange.
3. Employee eligibility for premium tax credits or cost-sharing reductions, in cases where the employer sponsored plan does not meet "minimum value" (60% of the total costs).
4. Possibility of losing employer contributions to any employer-sponsored health plans, if insurance is purchased through an exchange.
5. Possibility that a portion or all of an employer's contributions to any employer-sponsored health plans may be excluded from income for tax putposes.
Although HHS has indicated that model notices will be provided, as of January 2013, a release date has not been announced - DOL has not indicated whether a model notice will be given.
The following is a brief Q&A of the new requirement, to better understand the reporting regulation, to see whether or not you'll be beholden to it in the coming calendar year, and what additional steps you'll have to take to ensure compliance:
What is the new W-2 reporting requirement under PPACA?
Employers will provide employees of the cost of their health care coverage on their W-2's. This reporting is for informational use only and will not be included in the empoyees taxable income.
Does this requirement apply to me?
If you filed more than 250 Form W-2's for the 2011 calendar year, you will have to comply with the new W-2 reporting requirements next year -- beginning with the 2012 Form W-2, issued to employers in January 2013. If you have filed less than 250 W-2's, you will not have to furnish this information prior to 2014 (although you can volutarily early report).
Which plans coverage costs must be included?
Answer: Medical Plans, Perscription Drug Plans, Executive Physicals, On-Site Clinics, Medicare Supplemental Policies, Employee Assistance Programs, and coverage under Dental and Vision plans -- unless they are "stand-alone".
Which plams are excluded?
Answer: Flex Spending and Health Savings Accounts, Specific Diesease or Hospital/Fixed Indemnity Plans, Accidental or Disability coverage, Liability and Workers Comp, and Credit-only insurance.
If I self-insure, how do I determine what the "applicable premium" is?
Answer: Through the actuarial method, or through the past-cost method (COBRA continuation coverage).
(Source: National Council of Agricultural Employers, www.ncaeonline.org)