Peter Freska, CEBS
The LBL Group, A UBA Partner Firm
In my last post I ended with the following:
…with so many pending items and lack of awareness, what should employers do? Here is a list of items employers should already be engaged in with their Advisers (adapted from UBA Partner Firm Presentations):
Step 1: Understand general Pay or Play Rule.
Step 2: Determine if you are a “Large Employer.”
Step 3: Will any of your employees receive federally-subsidized exchange coverage?
Step 4: Verify whether you offer “Minimum Essential Coverage” under an employer plan.
Step 5: Ensure that your plan provides “Minimum Value.”
Step 6: Verify the coverage is “Affordable” for employee.
Step 7: Determine how the penalty is calculated.
Step 8: Review strategic considerations with your adviser.
The Next, Next Steps…With all of this settled and understood, employers need to turn to the policies and procedures that will allow them to manage the implementation of health care reform. And, we cannot forget about the impending “Cadillac Tax” for 2018. What is your company doing to mitigate its exposure to this rule?…
While the steps above still ring true, now the Next, Next Steps need answers. One item that seemingly is falling on employers is notification to their employees that if they waive benefits now, they may not be able to enroll onto the employer sponsored health plan until next year’s open enrollment period. If this leaves employees without insurance, then starting January 2014 they will be subject to the penalty for not having credible coverage – at least for the months until they elect coverage. There are more problems as well. Most insurance carriers have not issued guidance on how January 2014 will be handled. Here are a few of the questions that remain unanswered:
- Will January 1, 2014 be considered a qualifying event for people to join their employer sponsored health plan?
- Will there be a minimum value plan that the insurance carriers will allow employers to offer to waived employees?
- Will an employer’s group plan participation be affected by the new eligibility rules?
- What is the plan going into 2014?
As answers to these questions come from the insurance carriers across the country, policies and procedures will be developed. Each of these will have the potential of changing an employer’s internal processes. An example of this that does have guidance, is the Health Care Reform cap on waiting periods (employer probation periods for new hires). Employers currently have quite a bit of flexibility, but post-Health Care Reform implementation, the waiting period will have a 90-day cap. Further, in states like California, the legislature has passed a state law mandating a 60-day cap for small groups (CA AB 1083).
So be prepared to amend your policies, and rewrite your employee handbooks. Implementation of Health Care Reform is upon us – almost.