HCC Life Insurance Company
225 TownPark Drive
Kennesaw, GA 30144
A key provision of the Affordable Care Act (ACA) has been delayed, but compliance is still required.
Last week the Treasury Department communicated that the ACA’s pay or play penalties would be delayed for one year. Numerous organizations gave a collective sigh over the July 4th holiday when this news was released, but as we wait to learn how the actual regulations will be applied, it is important to realize that this is only a portion of the bill. There are several other provisions of the ACA that will impact how employers prepare for January 1, 2014.
The pay or play penalties have been impacted with this provision. On July 2, 2013, the Treasury Department reported in a blog post that the ACA’s new employer reporting requirements will not be enforced. The purpose of these reporting requirements was to determine if employers provided coverage to the majority of their full-time employees and if that coverage was affordable while still meeting the minimum value requirements that assess the employer’s shared responsibility. The postponement of the employer reporting obligations means that information on employer provided coverage will not be available, and therefore the ability to assess employer penalties will be impossible.
Formal regulations concerning the delay in the employer and insurer reporting obligations under sections 6055 and 6056 of the ACA are still to come, along with a delay in the employer shared responsibility penalties under section 4980(h). Once these regulations are released, the employer mandate penalties and reporting obligations will be delayed until 2015. We will continue to watch these regulations to see if the delay requires a good faith effort on compliance, or any other requirements that were not addressed by the Treasury Department’s recent blog post.
Other provisions of the ACA have not been impacted. Many are viewing this news as a cornerstone provision that could delay the implementation of the entire Affordable Care Act. At this time, there is no indication there will be further delays with the other provisions of the ACA. Producers and their clients need to continue to prepare for the changes as they begin renewing plans on January 1, 2014 and thereafter. Some of the provisions that still require your attention are as follows:
- Health Insurance Exchanges, both federal and state run, are still required to begin open enrollment on October 1, 2013. Employers are required to distribute notices to employees about the availability of coverage through the Exchange.
- The individual mandate will still be implemented on January 1, 2014. This means that employers who do not provide minimum coverage could still subject their employees to the individual mandate penalty if the employer provided coverage does not meet minimum value requirements.
- Benefit requirements for self-funded employers have not been modified or delayed. Coverage will continue to be required in order to remove all pre-existing condition limitations, avoid a waiting period greater than 90 days, remove annual dollar limits, and offer coverage to all dependents under the age of 26. Non-grandfathered plans will also have to comply with clinical trials coverage requirements, provider non-discrimination rules, and apply the out-of-pocket limits.
- PCORI and Transitional Reinsurance fees will also apply to all self-funded plans, just as they did prior to the delay.
While the delay in the pay or play penalties caught most everyone by surprise, it does not impact the rest of the ACA requirements that go into effect on January 1, 2014. Additional delays may follow, but until they occur, producers should remain focused on a January 1 compliance deadline. HCC Life wants to keep you as informed as possible. Be sure to check our website often for detailed FAQs and other materials as we continue to comply with the provisions of the ACA.