Information Regarding the Affordable Care Act
For Employers Participating in HealthChoice
As of March 2013
EGID provides the following information for those employers who participate in HealthChoice and have questions related to how health reform under the Affordable Care Act (ACA) impacts the plan and participants. Employer circumstances vary, and for specific issues an employer should seek the advice of legal counsel.
Guidance continues to be issued by federal agencies on various aspects of ACA. This notice will be updated periodically as further information becomes available.
HealthChoice maintained “grandfather status” (GFS) during 2011, but as of January 1, 2012, is no longer a GFS plan.
Dependent Eligibility to Age 26
ACA provides that for plan years beginning after September 23, 2010, dependents who are sons, daughters, stepchildren, adopted children and foster children can be covered to age 26, regardless of marital status, employment, student status, residency or financial dependency upon the plan member. Effective January 1, 2011, HealthChoice offered coverage to these dependents as described above. Members may cover other unmarried children up to age 26, if the child lives with the employee in a parent-child relationship and the employee is primarily responsible for the child’s support.
W-2 Reporting of Employer-Provided Health Benefits
Beginning with 2012, W-2 Forms (generally reportable in 2013), the value of employer-provided health benefits must be reported on employees’ W-2s, beginning with 2011, (generally reportable in 2012). The W-2 reporting is for informational purposes only so that employees understand the value of the health care benefits provided.
Information from the IRS regarding the reporting requirement may be found at:
Early Retiree Reinsurance Program (ERRP)
HealthChoice was certified for participation in the Early Retiree Reinsurance Program (ERRP). ERRP was a program established under the Affordable Care Act whereby the Federal government reimburses a plan sponsor of an employment-based health plan for some of the costs of health care benefits paid on behalf of, or by, early retirees and certain family members of early retirees participating in the employment-based plan. By law, the program expires on January 1, 2014, or sooner if federal funding becomes depleted. CMS announced that due to the depletion of the program funding, they would no longer accept applications for program funds after May 5, 2011.
HealthChoice used reimbursements it received from this program to reduce or offset future increases in plan participants’ premiums. Under federal guidelines, all ERRP funds must be used by December 31, 2014.
Plans receiving money from the ERRP are required to send notices to plan participants regarding the receipt and use of these reimbursements. The full notice may be found here.
Section 125 Plans
ACA made changes to the flexible spending account rules. Employers should contact their Section 125 plan administrators for details on these changes.
Other ACA Requirements
ACA is a complex law providing for numerous changes that take place over the next eight years. Some significant changes coming in the near future are:
- ACA provides that employers with more than 200 employees and a health benefit plan must automatically enroll all current employees and new employees into the plan. Automatic enrollees must be allowed an opportunity to opt out of the plan. The Department of Labor (which has responsibility for creating the regulations governing this change) has concluded that its automatic enrollment guidance will not be ready to take effect by 2014. It remains the Department of Labor’s view that, until final regulations under Fair Labor Standards Act (FLSA) section 18A are issued and become applicable, employers are not required to comply with the ACA required enrollment. However, employers may be subject to other existing laws or guidelines which require 100% enrollment. The “Individual Mandate” is scheduled to take effect in 2014, requiring U.S. citizens to have minimum essential coverage through a private market, employer, or government plan.
- Pay or Play: In 2014, employers with an average of 50 employees or more during the preceding calendar year must offer minimum essential coverage to full-time employees, or face fines. The rules regarding this process are complex and are influenced by several factors, including the types of employee contracts involved, hours worked, etc. Employers should work with their legal counsel to be sure that they understand the requirements and how they apply to each employer’s specific circumstances.
- In plan years beginning on or after January 1, 2014, a group health plan or group health insurance issuer shall not apply any waiting period that exceeds 90 days. A waiting period is defined to be the period that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the plan. HealthChoice’s waiting period is significantly less than that time period; however, employers will need to be sure that they are not imposing any additional waiting periods that exceed the 90 day limit.
- Health Insurance Exchange Notices: Employers were originally scheduled to have to provide a written notice to each employee by March 1, 2013, that described the new health insurance exchanges. Early in 2013, the Department of Labor extended the deadline for providing these notices until such time as regulations are issued. This is not expected to occur until either late summer or fall of 2013. The specific content of the notice is not yet known.
- Employer reporting: Beginning in 2015, employers must submit information to the Secretary of the US DHHS about health insurance plans and employee enrollment, including certifications regarding full time employees being offered health care coverage, the length of the waiting period, premiums charged and the employer share of cost.