Tag Archives: Patient Protection and Affordable Care Act

Marketplace Notices – to Comply or Not to Comply?

Contributed by Rebecca Dobbs Bush

The deadline for employers to provide current employees with notice of health care coverage options available through the ACA Marketplace is October 1, 2013, right around the corner.    

The DOL has published model notices that employers can use to comply with the notice requirements:

§  Model Notice for employers who offer a health plan to some or all employees <http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf>

§  Model Notice for employers who do not offer a health plan <http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf>

On September 11, 2013, the DOL published FAQ’s confirming that there is no penalty tied to the Marketplace Notice requirement.  As this particular notice requirement was done as an amendment to the FLSA (instead of as an amendment to HIPAA or ERISA), the FAQ’s should not have been a surprise or considered as a drastic change in position by the department.

In light of the recently published FAQ’s, some are now advising employers not to publish the notices at all.  While there is not a penalty tied to the notice, employers should not forget that they are still legally required.  With the DOL increasing its scrutiny of welfare plans (and where such audits often consist of reviews to ensure proper plan documentation and these very type of notices are in place), it is not recommended to blatantly disregard the Marketplace Notice requirement. 

Instead, the confirmation of lack of penalty should simply be referred to as a reminder to not spend too much time or analysis on this Notice requirement.  In other words, just do your best to comply.  In addition, many employers that are getting caught up with the particulars of how to complete part B of the model notice and having difficulty completing it, are simply distributing part A of the Notice.  There are various considerations to take into account if you are considering this strategy and whether it is best for your company.  In that event, you may want to contact counsel for advice on the best options for your situation.  Keep in mind that when employers are eventually subjected to penalty exposure in 2015, that penalty exposure will be tied to whether or not a person accesses a subsidy at the Marketplace.  Whether a person can access a subsidy is dependent on the price and availability of the employer offering.   All of that information is to be included on Part B of the model notice.  Thus, without providing that information to an employee, the employee may very likely give inaccurate information at the Marketplace resulting in an inappropriate subsidy award.  In turn, increasing potential penalty exposure for the employer.

Also, remember that the Notice requirement is not over after you meet your October 1, 2013 distribution date.  Employers must also provide new employees with notice of health care coverage options available through the ACA Exchange “at the time of hiring.”  For 2014 the DOL will consider an employer to have given notice “at the time of hiring,” if the notice is provided within 14 days of the new employee’s start date.

The New Year is a Reminder of the Imminence of the Mandates of Health Care Reform

Contributed by Rebecca Dobbs Bush

With the ringing in of the New Year, we are now officially on the eve of the employer mandate provisions within Health Care Reform. The employer mandate provisions require those employers with 50 or more “full-time equivalent” employees to offer “minimum value” coverage to employees that work 30 or more hours per week. Where two or more companies have a common owner, or are otherwise related, they are combined for purposes of determining whether they employ enough employees. The coverage offered by the company must be “affordable” for employees. Where an employer does not do this, and at least one full-time employee receives a premium tax credit to help pay for coverage on an Exchange, the employer will be subject to penalties or a “tax” of $2,000 per full-time employee – with the first 30 full-time employees “free.”

The employer mandate provisions are now also being referred to as the “shared responsibility” provisions. The IRS has issued multiple Notices attempting to clarify the confusion over implementation and application. Most recently, the IRS issued proposed regulations and FAQ’s on December 28, 2012. The attempted clarification of the shared responsibility provisions have only served to confirm the confusing and complicated nature of the provisions.

What is imperative for every employer to understand is that the basis for determining how and whether the shared responsibility provisions apply to your business on January 1, 2014 depends upon the make-up and structure of your workforce during 2013. Accordingly, employers need to act now to understand whether and how the shared responsibility provisions of Health Care Reform will affect them come January 1, 2014.

Supreme Court Ruling Upholds Individual Mandate Provisions of Health Care Reform – What Does it mean for Employers?

Contributed by Rebecca Dobbs

On June 28, 2012, the Supreme Court issued its highly anticipated and long-awaited ruling on Health Care Reform.  Primarily, the court was reviewing two provisions in the Act: 1) the individual mandate and 2) Medicaid expansion.  Because the ruling with regard to the Medicaid expansion provision does not directly impact employers, this article will focus only on the ruling with regard to the individual mandate.

Justice Roberts wrote the decision for the majority.  In it, he acknowledged the individual mandate was a “penalty” for purposes of jurisdictional issues which allowed the court to render a ruling.  But, for purposes of determining Congress’ power to issue the mandate, the court held that the mandate was a “tax.”  For those of you who aren’t aware, Congress’ power to tax is much, much broader than the power granted to them under the commerce clause of the Constitution.  This reasoning allowed the court to uphold the individual mandate while determining at the same time that the individual mandate was outside Congress’ authority under the commerce clause. 

We have reiterated before that the employer mandates within Health Care Reform were not directly an issue before the court – a common misconception.  The employer mandates would have been indirectly affected had the court ruled the individual mandates were unconstitutional and then also went on to hold that they rendered the entire act unconstitutional because they could not be severed from the rest of the provisions within the act.

What does this mean for employers?  If you were within the category of employers that had been preparing for upcoming compliance requirements without regard to the outcome of today’s decision, your preparation efforts were not wasted activities.  If you were within the category of employers that was disregarding upcoming compliance requirements in the hope that the Supreme Court would save you from them, you need to immediately redesign your current strategy.

Automatic Enrollment for Health Plans in 2014? Not Just Yet….

Contributed by Rebecca Dobbs

The Patient Protection and Affordable Care Act (ACA) requires all large employers (with more than 200 employees) to automatically enroll full-time employees in a health plan, if they offer one.  This provision was scheduled to take effect in 2014. Interestingly, it was done as an amendment to the Fair Labor Standards Act (FLSA)–a law that allows plaintiffs, i.e. employees, greater remedies than the Employment Retirement Income Security Act (ERISA) currently does.

The automatic enrollment provision of the ACA will most likely cause employers to feel an immediate cost impact.  Increasing enrollment in a sponsored health plan will instantaneously increase the monthly invoice an employer receives from its insurance carrier.

Pursuant to the automatic enrollment provisions, employers are required to notify employees that they will be automatically enrolled in a health plan and give them an opportunity to opt out—not much else is known outside of that. 

On February 9, 2012, the Department of Labor (DOL) issued a Technical Release which, among a few other things, announced that guidance on automatic enrollment will not be ready by 2014.  The DOL made clear that until such final regulations are published, employers will not be required to comply.

The DOL has indicated that this delay is necessary “[i]n view of the need for coordinated guidance and a smooth implementation process….”  While this applies to just about every provision of Health Care Reform, we’ll take any additional time to seek any clarity that we can get.