TIME TO CARE: Obamacare Is Coming. Soon. but after Leaving Legal and Political Hurdles Behind, Employers Still Worry There's No Clear-Cut Path to Health Care Reform

By Pyrillis, Rita | Workforce Management, December 2012 | Go to article overview

TIME TO CARE: Obamacare Is Coming. Soon. but after Leaving Legal and Political Hurdles Behind, Employers Still Worry There's No Clear-Cut Path to Health Care Reform


Pyrillis, Rita, Workforce Management


BOTTOM LINES:

*Long-awaited guidance from federal agencies overseeing elements of health care reform are likely to raise more questions.

*Key upcoming provisions include flexible spending account caps in 2013 and the employer mandate in 2014.

*Employers are looking for ways to avoid costs associated with health care reform.

If health care reform taught employers anything in 2012, it's that patience is a virtue.

Since the Patient Protection and Affordable Care Act passed in March 2010, employers have waited through numerous court challenges culminating with June's U.S. Supreme Court decision on the law's constitutionality followed by November's nail-biting re-election of health care reform's chief architect, President Barack Obama. But the wait may soon be over as guidance from Washington emerges.

Just before Thanksgiving, the U.S. Department of Health and Human Services released new proposed regulations addressing several provisions of the Affordable Care Act, including standards related to "essential health benefits" that must be offered to most Americans and an increase in the maximum financial reward employers can give employees who stop smoking or meet other health goals.

The last time employers received clarifications on the law's complex provisions was in August when the Internal Revenue Service issued its definition of a full-time employee.

It appears that the post-election avalanche of regulations and guidance that many predicted is under way. However, the lessons they will present in 2013 may not be clear cut.

"It is amazing how over the past few years since the law was passed how many times we get asked [by clients] what's going to happen," says Dave Almeda, vice president of human resources at Kronos Inc., an HR software firm. "The law is vague enough that it requires a lot of interpretation and rule-making. We were getting a steady diet of that until three or four months ago, and then it stopped. We've been in a hurry-up-and-wait mode for a couple of years."

Employers welcomed the November HHS rules, which includes a provision that gives employers greater flexibility to reward employees who participate in wellness programs designed to help them lose weight or lower their blood pressure. Under the proposal, the maximum dollar amount of the reward would be increased to 30 percent from 20 percent of the cost of coverage. It would also increase the maximum reward to 50 percent for wellness programs that aim to prevent or reduce tobacco use.

Companies are gearing up for a raft of health care changes in 2013 and 2014. Here's an overview of what's ahead.

*Starting in January, employee contributions to health care flexible spending accounts must be capped at $2,500.

*In March, employers must notify employees about the status of their state health care exchange and their eligibility for federal subsidies if the company plan is deemed unaffordable under the law.

And in 2014:

*Employers with more than 50 employees must offer an affordable health plan or face penalties of up to $2,000 per employee, excluding the first 30 workers.

*Large employers must offer coverage that is defined as affordable and that meets the minimum value standards or face a penalty if just one of its full-time employees receives federal assistance to purchase insurance through an exchange.

*Large employers must offer health plans with a minimum actuarial value of 60 percent.

Like many companies, Kronos has been working toward compliance as regulations emerge but long-term planning is difficult when so much remains unclear, Almeda says. "You shouldn't draw conclusions until we have all the regulations. We've done all the things that are required. We've covered dependents, addressed FSA limits ... but beyond that it's hard to come up with an answer on how reform will impact our health care strategy. "

At Ryan LLC, a Dallas tax consulting firm, compliance has been a priority since the law passed. …

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