Affordable Care Act: What HR Managers Need to Know

by Gulfshore Insurance

As we round the corner and closer to the last quarter of the year, HR managers and directors should heed these 4 words of advice: “Get informed, get educated.” There are several Patient Protection and Affordable Care Act (PPACA) highlights that HR managers should know now…

For example, employers face an immediate requirement to provide summaries of benefits and coverage to their employees, including descriptions of cost-sharing requirements such as deductibles, co-insurance and co-payments, and information regarding any exceptions, reductions or limitations under the coverage. The explanations are to be made available to participants and beneficiaries who enroll or re-enroll in group health coverage through enrollment periods after Sept. 22, 2012.

The national SHRM website reminds employers that in 2013 they must:

• Report the value of employer coverage on employees’ 2012 Form W-2s. IRS Notice 2011-28 provided further relief by making this requirement optional for smaller employers in CY 2012. So, to which employers and types of coverage does it apply and how long does it last?  For certain employers and with respect to certain types of coverage, the requirement to report the value of coverage will not apply for the 2012 Forms W-2 (the forms required for the calendar year 2012 that employers generally are required to provide employees in January 2013) and will not apply for future calendar years until the IRS publishes guidance giving at least six months of advance notice of any change to the transition relief. The transition relief applies to the following:

1. Employers filing fewer than 250 Forms W-2 for the previous calendar year (for example, employers filing fewer than 250 2011 Forms W-2 (meaning Form W-2s for the calendar year 2011, which generally are filed with the SSA in early 2012) will not be required to report the cost of coverage on the 2012 Forms W-2 (which generally are filed with the SSA in early 2013).
2. Multiemployer plans;
3. Health Reimbursement Arrangements;
4. Dental and vision plans that are not integrated into another group health plan;
5. Self-insured plans of employers not subject to COBRA continuation coverage or similar requirements; and
6. Employers furnishing Forms W-2 to employees who terminate before the end of a calendar year and request a Form W-2 before the end of that year.

• Cap health care flexible spending arrangements at $2,500.
• Increase Medicare withholding for employees earning more than $200,000 per year.

On the Horizon

The most controversial element of PPACA, the individual mandate that requires most Americans to have adequate health coverage or pay penalties, takes effect in 2014 — as does the requirement that employers with more than 50 employees offer full-time employees and their dependents affordable coverage with a minimum value or face penalties.

Also by 2014, health insurance exchanges are intended to be operating in every state, offering community-rated insurance to certain small employers and individuals. Federal premium tax credits will be available to help some people buy that coverage. SHRM advises employers to expect a spike in plan enrollment for 2014 due to the individual mandate, but notes they might see enrollment level off once the state exchanges become operational.