The Affordable Care Act Delay: What Will It Mean for Your Business?
Last week, the White House announced that it is delaying until 2015 the part of the Patient Protection and Affordable Care Act (PPACA or ACA) that requires businesses with more than 50 full-time employees to provide health insurance to their full-time workforce, or else pay a penalty. This move comes after many businesses complained to the administration that the requirements were too complicated and difficult to implement by 2014. Other key elements of the law, such as the opening of health exchanges (where individuals can buy insurance, set to open on October 1st of this year) remain on their original schedule. The individual mandate, which requires most Americans to purchase insurance, also remains unaffected by the announced delay, and some consumers may still receive subsidies to help them pay for the insurance, depending on their incomes.
From the White House Blog:
As we implement this law, we have and will continue to make changes as needed. In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening. So in response to your concerns, we are making two changes.
First, we are cutting red tape and simplifying the reporting process. We have heard the concern that the reporting called for under the law about each worker’s access to and enrollment in health insurance requires new data collection systems and coordination. So we plan to re-vamp and simplify the reporting process. Some of this detailed reporting may be unnecessary for businesses that more than meet the minimum standards in the law. We will convene employers, insurers, and experts to propose a smarter system and, in the interim, suspend reporting for 2014.
Second, we are giving businesses more time to comply. As we make these changes, we believe we need to give employers more time to comply with the new rules. Since employer responsibility payments can only be assessed based on this new reporting, payments won’t be collected for 2014. This allows employers the time to test the new reporting systems and make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers.
While the delay will give businesses more time to find out about what the law actually requires of them and to plan out health insurance coverage for their workforces, it will still be a huge task for many organizations to adapt to the requirements and regulations of the ACA—and there are plenty of them to adapt to in the coming months. From the article “Health Care Law’s Employer Mandate Delayed Until January 2015” posted last week by SHRM:
However, “Many ACA provisions are unaffected by the delay, and employers must continue to implement and comply with them,” advised an analysis by consultancy PricewaterhouseCoopers. “New individual and group health plan requirements taking effect for 2014 plan years include a ban on annual dollar limits on essential health benefits, a 90-day limit on eligibility waiting periods, new out-of-pocket limit maximums, the elimination of preexisting conditions exclusions for adults, and coverage of clinical trial participant costs.” New fees and assessments—including the ‘PCORI’ and transitional reinsurance fees and a health insurer tax—“remain undisturbed by the delay.”
Also remaining in place, for instance, are the reform act’s requirement that most employer-provided health care include coverage for recommended preventive care—including contraceptive services for women with no cost-sharing—and the requirement for employers subject to the Fair Labor Standards Act to provide written notices about government-run exchanges to each of their employees and to all new hires by Oct. 1, 2013.
As these aspects of PPACA move forward as scheduled in the coming months, there remains plenty of speculation by many as to what further changes may be made to the postponed mandate for organizations with 50 or more full-time workers. Will it be further amended? Will it be postponed again? Will it be dropped all together?
This is going to make benefits planning lots of fun, huh?
“Companies have got to keep an eye on how this legislation is moving forward—or not moving forward, as the case may be—because they are the ones, in the end, who will be held accountable for compliance,” says Tina Hamilton, PHR, president and founder of hireVision. “This is all pretty tricky, because you don’t want to spend a lot of time and money preparing for health care reform regulations that could change drastically, or not happen at all. Businesses are already running lean because of the economy. They can’t afford a lot of wasted effort like that. HR really has its work cut out for it with this legislation.”
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This article is part of our “Look at These Laws!” series, where we highlight some major legal and compliance issues facing businesses right now, and we strongly encourage you to check back weekly (or sign up for our new blog article email alerts) to keep yourself abreast of this important information.