Last December 2012, we here at WageWatch wrote how the Affordable Care Act was already causing much confusion for American companies as well as for the general public. The law, as passed, was over 2,500 pages long and requires thousands of additional pages of regulatory policy in order to be enacted. Now, less than a year later, there have been changes and updates to the new law and the regulatory policies surrounding it. As employer, it is easy to get caught in the details and lose sight of the big picture.
Most of our Human Resources clients have already begun planning for a post-ACA world in 2014. For those who have not, let’s take a look on where to start and how to navigate the employer concerns.
To begin, management needs to have a conversation regarding the company’s philosophy towards employee health benefits. Look to what the organization has done in the past and use that as a road map for the future. What was the philosophy before the ACA? Did it successfully support your organizational goals? Does the philosophy need to change comply with ACA?
There has been a significant change to the ACA recently. The employer mandate, which is the penalty that will be incurred by employers with more than 50 employees if they do not offer health insurance to full time workers, has been delayed a year from 2014 to 2015.
The intent of the employer mandate was to prevent disruptions to currently insured employees by disincentivizing employers from eliminating existing healthcare plans. However, because employers will not face a penalty if it employs less than 50 full time workers, many were concerned the employer mandate would create an incentive to employ part-time workers instead of full-time.
The Administration’s goals in delaying the mandate by one year was to allow the government more time to simplify reporting requirements and to provide employers more time to adapt. The announcement was met with criticism from the opposing political party as a politically motivated move.
The delay does give employers one more year to adjust their current benefit offerings to be ACA compliant. To do so, these plans need to meet or exceed the following four requirements:
- Provide minimum essential health benefits as defined;
- No annual or lifetime limits on these essential benefits;
- No copayments or deductibles on preventive care; and
- No Pre-existing conditions, guaranteed issue regardless of medical condition
Employers, with 50 or more FTEs, who will not or cannot offer a plan that meets or exceeds these requirements, will suffer a $2,000 per full time employee penalty.
The experts at WageWatch want you to know how important it is to be aware of the new policies under the Affordable Care Act and their effect on small businesses. Employers need to properly plan for the future by developing accurate budgets that take the changing costs of healthcare benefits into consideration for the year 2014 and beyond. For assistance with your budget, WageWatch offers cost-effective reports, including salary, wages and benefits survey data. To learn more about the services provided by WageWatch, please call 888-330-9343 for assistance or contact us online.