Obamacare 2013 and 2014: What You Need to Know Now

Earlier this year the Department of Health and Human Services announced a one-year delay in the implementation of key provision of the Affordable Care Act. Because of the highly politicized nature of this law there has been much said about the law "falling apart" and similar comments that would lead some to think that the whole act is on hold. Nothing could be farther from the actual situation so employers and employees must know what to do to keep in compliance. This law is already partially implemented and key provisions roll out this year and next. Here is where your company should be and what it should be preparing to do if it has 50 or more employees.

2013 Changes

For the current benefits plan year, or for any plan year beginning during calendar 2013, health plans must execute the following changes:

· Healthcare Flexible Spending Account (FSA) deductions are now capped at $2,500.

· Women’s preventative health services now must be covered at 100%.

· Comparative Research Effectiveness (CRE/PCROI) fees of $1 per covered employee are due.

· Employees must be notified 60 days in advance if their coverage changes significantly.

In addition to these plan changes, state Insurance Exchanges will be up and running in all 50 states by January 1, 2014. Open Enrollment for Exchange coverage starts October 1, 2013 for coverage beginning January 1, 2014. It is the employer’s obligation to notify all employees of the option of Exchange coverage before October 1. A sample notice or notice template is available from HHS or your broker.

2014 Changes

Prior to 2014 plans were able to designate themselves as “Grandfathered” or “Non-Grandfathered” for purposes of the Act. Beginning in 2014 plan changes must be implemented regardless of this status. These include:

· Annual dollar limits on essential health benefits must be removed from your plan.

· Pre-existing condition exclusions are also prohibited and must be removed.

· Child eligibility for coverage up to age 26 must be included in all plans.

· Eligibility waiting periods of more than 90 days post-hire are prohibited.

· Co-payments must be counted toward the calculation of out-of-pocket maximums.

· Clinical trials must be covered.

· CER/PCROI fees increase to $2 per covered employee.

· Employees must be provided a Summary of Benefits in plain language

 Starting in 2014 and extending through 2016 a Reinsurance Fee will be assessed to all plans of roughly $63 per covered life (including dependents) to establish the insurance exchanges and stabilize the private insurance marketplace. Insured plans will most likely see this cost, paid by their insurer, passed on in their premiums. Self-insured plans must pay this fee directly.

In addition, with the state Exchanges up and running, the Individual (Employee) Shared Responsibility Mandate takes effective. The impact will be that all adult citizens must have health insurance. If your employer-provided insurance is less expensive than Exchange coverage you may experience higher enrollment in your health plan.

In 2014 some individuals purchasing Exchange coverage become eligible for tax credits. These would be given after filing 2014 taxes (during tax season in calendar year 2015). Employees are eligible for credits if (1) they make less than 400% of the Federal Poverty Level and (2) the coverage offered by their employer’s health plan is not affordable as defined by the Act.

As I travel around I hear conservative talk radio claiming the law is "falling apart". Some states have it almost fully implemented such as California, New York and Oregon. There are benefits to employees and employers, and consequences for non-compliance, so know what you need to do next. I welcome questions about the ACA on this blog.