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June 20, 2014

ACA Update: What Has And Has Not Been Delayed

What has been delayed for employers?

Employer Shared Responsibility Requirement Provisions: No reporting until calendar year 2015

  • Delayed until January 1, 2015 for large employers with 100 or more employees.  There is a potential excise tax penalty for failure to offer minimum essential coverage (MEC) at an affordable rate:

1. "No coverage” Penalty ($2000): Failure to offer MEC to 95% (70% for 2015) of full-time employees working 30+ hours

2. “Inadequate or Unaffordable” Penalty ($3000): Coverage fails to meet minimum value standard or is unaffordable

Transition relief is only available if the non-calendar year plan year has not been changed since December 27, 2012.

  • Delayed until 2016 for small employers with 50-99 employees. There is a potential excise tax penalty for failure to offer minimum essential coverage (MEC) at an affordable rate:

1. “No coverage” Penalty ($2000): Failure to offer MEC to 95% of full-time employees working 30+ hours

2.  “Inadequate or Unaffordable” Penalty ($3000): Coverage fails to meet minimum value standard or is unaffordable

To qualify, employer must not have materially reduced the health benefits offered as of February 9, 2014.

What has been delayed for individuals?

Individual Mandate Penalties for Failure to Maintain MEC: Provisions Delayed until October 1, 2016

 Individual Mandate Penalties

What has NOT been delayed?

Group Health Plan Mandates: For plan years beginning on or after January 1, 2014, all group health plans, including grandfathered and non-grandfathered plans, must include these mandates:

  • Ban on pre-existing condition exclusion limitations on anyone
  • Extension of dependent coverage until age 26
  • Full implementation of ban on annual or lifetime limits for essential health services
  • Increased limit in outcome-based incentives/disincentives permitted in wellness programs from 20% to 30%; or, up to 50% for tobacco-free programs
  • Ban on waiting periods exceeding 90 days (60 days if using 1st of the month eligibility)
  • Inclusion of essential benefit coverage, providing a specified actuarial value, and cost-sharing limitations by insurers in small group and individual markets, and large group markets via state marketplaces
The Affordable Care Act sets in motion the largest change in employer-provided health benefits most of us have seen in our lifetime. Keep in mind the reform is ever-changing. To keep up to date subscribe to our blog. For further questions regarding the ACA, please contact Steve Dunavant at sdunavant@cbiz.com or (901) 685-5575.

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