4 Steps for Employers after the ACA Decision
The Verdict is in! Now what?
The Supreme Court Ruled in the King v. Burwell case that subsidies used to purchase health insurance in 36 states on the federally facilitated marketplace are legal. This will avoid the “death spiral” often referred to by Congress. For employers already providing healthcare, it’s business as usual. The government’s marketplace is the new normal and legal path that has been cleared for employers to focus on compliance initiatives, including:
1. Employer shared responsibility – If employers with 50 employees or more want to avoid an Internal Revenue Code §4980H(a) penalty for failure to offer health insurance to employees, they must make sure that they offer coverage to at least 70% of their full-time employees in 2015. By 2016 and beyond they must offer coverage to at least 95% of Full time employees. Full time employees work an average of 30 hours or more per week. Employers must ensure that the coverage is “affordable” and meets the minimum value criteria for each FTE to avoid lesser penalties under Internal Revenue Code §4980H(b). Penalties for violating these codes can be up to $3000 per employee.
2. Employer ACA reporting – Beginning in 2015, employers are required to report to individuals and to the IRS on the health care coverage offered to their full-time employees and any individuals covered under the plan. The forms are due in early 2016 when W-2 forms are due, but employers must act now to gather data for completing the forms. Employers must be prepared to document if they offer affordable coverage to full time employees in order to be able to defend against notices for demand and payment from the IRS.
3. Decisions on how to design their active health plans now that the Healthcare Marketplace is here to stay – The ACA does not require employers to continue to offer coverage to spouses which is not required but adds additional costs to the employers’ bottom line. Employers will also have to manage their workforce hours by ensuring employees who are not offered health care work less than 30 hours per week.
4. Documentation of plan design decisions - Employers will need to be able to demonstrate on audit that their benefit plans comply with not only the market reforms already in effect under the ACA, such as the elimination of pre-existing condition exclusions and coverage of children up to the age of 26, but eligibility language that complies with the employer shared responsibility requirements. This may include amending plan documents and summary plan descriptions to reflect such compliance.
Here at Questco we can help you comply with ACA by providing health care coverage, documentation, and dealing with all your administrative needs. We take care of ACA Compliance so you don’t have to! For more information on ACA compliance or other health care. Payroll, or administrative needs give us a call at (936)-521-5701.