Slideshow 5 ACA issues employers should be following

  • October 29 2014, 2:26pm EDT
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1. ACA-related litigation

Several pending court cases could have a huge impact on employer responsibility under the ACA, including dueling decisions by federal courts about whether employers in states with federally facilitated exchanges would be liable for penalties if an employee receives a subsidy. While employers and their advisers should be watching the cases closely, Epstein Becker Green advises employers to continue with their employer mandate plans until the courts rule definitively.

2. Employer mandate reporting

The IRS in August released draft forms and instructions related to the reporting requirements under sections 6055 and 6056 of the Internal Revenue Code. Finalized forms are forthcoming, but employers and their advisers can use the drafts to begin taking steps to ensure compliance with the law, the law firm says.

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3. Section 510 liability

ERISA Section 510 is an anti-abuse provision enacted to prevent unscrupulous employers from discharging or interfering with their employees’ rights to benefits. In the wake of the ACA, Epstein Becker Green says plaintiffs’ attorneys will likely use Section 510 as an avenue for suing employers that have reduced hours to limit exposure to employer mandate liability. Employers that are planning on reducing employee hours should do so in a way that limits their exposure to Section 510 claims, the firm says, adding that employers may consider grandfathering employees that previously worked 30 or more hours a week. Employers should also ensure their employment agreements are modified to notify employees who are not benefits-eligible of their status, the law firm adds.

4. Alternatives to traditional plan offerings

The employer mandate, for some, will dramatically increase the number of employees eligible for employer-sponsored coverage; and the cost of providing coverage to additional employees has led some employers and their advisers to look for alternatives to traditional plan offerings. While there are legitimate ways to lower costs, Epstein Becker Green says there are an increasing number of plan designs and schemes that could expose employers to liability, including employer payment plans, drug importation programs, incentive schemes and employee classification schemes. If it sounds too good to be true, then it probably is, the law firm cautions.

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5. The looming Cadillac tax

Beginning in 2018, employer-sponsored group health plans will be subject to a 40% non-deductible excise tax on the dollar amount of coverage that exceeds certain specified thresholds. Employers and their advisers must take action now to restructure their health coverage offerings to avoid the tax, says Epstein Becker Green. In addition to changing benefit design, many employers have implemented population health management techniques, such as wellness programs, telehealth operations and direct contracting with providers to improve the health of their population, which will, in turn, lower their costs, the firm says.