Health care reform is upheld! Now what? Don't panic!
On June 28, 2012, the Supreme Court of the United States upheld the constitutionality of the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA) as a tax. Accordingly, PPACA's current health insurance reform provisions will remain in force. Don't worry! R&R Insurance's Benefits Knowledgebrokers will provide guidance to employers and their employees to comply with the law as applicable and as implementation continues to unfold.
To be clear, there will be no change in course on implementation of PPACA for employers and plan sponsors. The process of activating the various provisions will need to continue, including the employer mandate, which will go into effect in 2014. R&R will continue to provide guidance to through our staff, useful client tools such as MyWave® and our monthly compliance webinars.
Employers sponsoring group health plans now need to focus on ensuring compliance with the summary of benefits and coverage regulations. These require distribution of summaries of benefits and coverage during upcoming open enrollments. (The summaries must be distributed no later than the first day of the first open enrollment period beginning on or after September 21, 2012.) We have a complete timeline available for download (see right column).
Here is a summary of other key health care reform provisions affecting employers:
- Play or Pay. Each employer with 50 or more full-time employees will have to either (a) provide at least a specified minimum level of health coverage that its employees can afford or (b) pay a penalty beginning in 2014.
- Benefit Dollar Limitations. Employer group health plans are prohibited from imposing lifetime or annual limits on benefit amounts, waiting periods in excess of 90 days, and pre-existing condition limitations.
- Tax Treatment. Eliminated are the Code’s tax-free reimbursements for over-the-counter medicines and, beginning next year, the law limits the maximum health care flexible spending account amount to $2,500.
- Retiree Drug Costs. Beginning next year, the employer tax deduction for retiree prescription drug benefit costs for employers receiving a related subsidy is eliminated.
- Non-discrimination. Insured group health plans are barred from discriminating in favor of highly compensated individuals regarding coverage and benefits. (The Internal Revenue Service has not yet issued implementing regulations for this prohibition to become effective.)
- Tax Reporting. Employers must report the annual cost of health coverage on each employee’s W-2, supplement information already reported on annual Form 5500 reports, and pay a per-plan-participant fee to the government for research purposes.
- Automatic Enrollment. Beginning in 2014, employers with more than 200 full-time employees are required to automatically enroll new full-time employees in group health plans.
- Patient Rights. The law already requires plans to provide coverage for children up to age 26, provide specific preventive care benefits on a first-dollar basis, and supplement the claim procedures already required under ERISA.
Information was consolidated by JacksonLewis - R&R Insurance resource partner law firm.