The highly anticipated 2015 start date for the Affordable Care Acts so-called employer mandate is here. Benefit advisers and their employer clients have likely spent countless hours preparing to meet the requirements of the ACAs employer shared responsibility rule, but theres still plenty of work to do.
Effective with the 2015 health plan, large employers with 100 or more full-time equivalent employees must offer health insurance that is affordable and provides minimum value to their full-time employees and their children up to age 26 or be subject to penalties.
In preparation for the mandate, brokers say they have helped employers explore their insured options, measure their FTEs, adjust plan offerings and even calculate possible penalties.
We have explored all insured options that comply with the law; fully insured options and self-insured options alike. Weve also helped [employers] to calculate the penalties if they do not meet the requirements, says Nicholas Moriello, president and CEO of Newark, Del.-based Health Insurance Associates.
Brokers, as well, have required training and education in anticipation of the employer mandate. Desmond Slattery, area executive vice president of Slattery GA, a division of Gallagher/Bollinger and chairman of the legislative council of New Jerseys Association of Health Underwriters, says his group has provided training for employer clients and continuing education programs for the brokers themselves to to gain an improved knowledge of the ACA, answers to their clients questions and access to information from the Departments of Labor and Health and Human Services, and the Centers for Medicare and Medicaid Services.
Benefit advisers need to keep abreast of ACA rules and not delay in taking the appropriate action, he says. Be proactive with your clients in explaining all the testing, record keeping, etc. that will be required in 2015. If they dont, someone else will.
Moving forward
Health care reform has created for benefit advisers and their employer clients a workload akin to a train that never stops moving according to Ben Lupin, a senior regulatory adviser with Towers Watson.
Youve done everything you had to do to offer coverage to your full time employees in 2015 and avoid any potential penalties, but now you have to do it all over again for 2016, he says.
The big thing, he adds, is that employers were given some leeway this year, because the general rule was large employers must offer coverage to 70% of their FTEs to meet the employer mandate, but by next year that number goes up to 95%.
Weve had some clients that clearly were meeting the 70% requirement but now have to plan to meet that 95% requirement moving forward, says Lupin. Even if there was a plan in place that was fine for 2015, its going to have to be reevaluated moving forward.
Ongoing maintenance
The way the health care reform law was setup, Lupin adds, this sort of ongoing maintenance will be necessary every year.
He advises benefit brokers and agents to make sure the coverage their employer clients offer is continuing to meet the requirements of the ACA, including the minimum value test and the affordability test.
The penalties, he says, are assessed on a monthly basis, so advisers should be working with employers to make sure they are meeting the ACA requirements every month for the year.
The affordability test and the minimum value tests are going be vital, he adds.
On the employee end, he adds, advisers and employers will need to constantly evaluate the makeup of FTEs.
Moriello agrees, advising brokers and agents to continue to be looking at the number of full time equivalents [an employer] has, and the potential penalties for not offering minimum essential coverage.
If you have variable hour employees, Lupin says, advisers and their employer clients should make sure to have a measurement method in place.
There are measurements for ongoing employees and new hires, he adds. Employers need to make sure that as you grow or hire new people, you need to be measuring those folks, too.
