In a move that was generally applauded by employers, the Obama administration announced last week that it would delay implementation of the employer health coverage mandate under the Affordable Care Act until January 1, 2015. The good news is that this gives employers another year to prepare for the so-called pay-or-play mandate that requires employers with at least 50 full-time-equivalent employees to offer affordable health coverage to those who work at least 30 hours a week. The bad news is that it remains unclear what compliance still means for employers.
While the employer mandate is suspended, a variety of key provisions that go into effect on January 1, 2014 remain in play. Subject to any future adjustments, plans are still obligated to comply with a number of specific changes. These include:
- Waiting periods cannot exceed 90 days
- Caps on annual out-of-pocket maximums and elimination of lifetime and annual limits
- Revised Summary of Benefits and Coverage notices and a required notice of availability of exchanges
- Excise taxes and fees, such as the PCORI fee and the reinsurance program fee
While we are awaiting further guidance, and any additional changes, plan sponsors should continue to take the necessary steps to make sure their plans are in compliance. Even though the pay-or-play mandate is suspended, plan sponsors could still be found to have non-compliant plans and face penalties around the ACA. So while you might be able to postpone changes relating to eligibility and affordability, you still have to revise your plan to make sure it complies. This delay only effects who you might have to offer coverage to, not the nature of the coverage that will ultimately be offered.
So employers as plan sponsors should take this delay as an opportunity to focus on making their plans 100% compliant. Consider 2014 a “measurement” year where you can implement those employment structures you might have already discussed to make sure your part-time and full-time employees are clearly defined. Consider this a brief reprieve and not an excuse to ignore ACA completely. Employers might have been given some breathing room on the final due date, but the project still has to be completed.
Used with permission from Fox Rothschild LLP. Keith R. McMurdy is an employee benefits attorney at the firm’s New York City office. To contact the author: firstname.lastname@example.org. This Legal Alert is not intended to be, and should not be construed as, legal advice for any particular fact situation.
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