Employers Face New Provisions of the Affordable Care Act

With the healthcare reform law, otherwise known as the Patient Protection and Affordable Care Act, in constitutional limbo, employers could only watch from the sidelines and prepare for the potentiality that the law would remain in force.

Yesterday, the 5-4 vote by the Supreme Court upheld the constitutionality of the ACA. Employers find themselves still in roughly the same situation as they’ve been since the law was created – a state of limbo before a complex series of provisions come into effect. Employers must now gear up to comply with the upcoming wave of healthcare reform provisions that appear between September 2012 and the start of the 2014 healthcare plan year.

Not only did the Supreme Court uphold the centerpiece of the legislation – the individual mandate – but also upheld the Medicaid expansion required by the law, though the federal government cannot coerce states to comply with the expansion by withholding federal funds used for Medicaid programs. The future holds several important deadlines employers must meet in order to remain in compliance with the new healthcare law. The current calendar is as follows:

• SBCs must be issued during the first open enrollment occurring on or after September 23, 2012.

• Most employers must report health insurance costs on individual 2012 W-2s.

• Insurers must issue medical-loss ratio rebates beginning this year.

• Employers must amend their health FSAs to reflect the new $2,500 limit on employee contributions by the end of the 2014 plan year.

• State health exchanges must be functional by 2014.

• Insurers cannot restrict coverage based on pre-existing conditions beginning in 2014.

• Employers found to not offer sufficient health insurance coverage by 2014 will suffer a financial penalty.

• Starting in 2014, employers may increase incentives for wellness program participation up to 30 percent beginning in 2014.

Employers may wish to seek professional council to make sure they are providing their employees with proper disclosures and that they are compliant with new federal laws regarding administration of health insurance benefits.