October 2014 Health Care Reform

October 2014 Health Care Reform

by Clarke & Company Benefits Posted on: October 8, 2014Categories: HR & Compliance   

With help from the IRS, effective for 2014, the Affordable Care Act (ACA) will provide premium tax credits to eligible individuals who purchase qualified health plan coverage through a health insurance exchange. The ACA also prohibits group health insurance issuers from applying any waiting period that exceeds 90 days. ACA’s 90 day waiting period requirement does not require an employer to offer coverage to any particular employee or class of employees, including part-time employees. It only prevents an otherwise eligible employee or dependent from having to wait more than 90 days before coverage under a group health plan becomes effective. On August 31, 2012, the IRS issued Notice 2012-59 in conjunction with the DOL and HHS to provide temporary guidance on the 90 day waiting period limit. The temporary guidance will remain in effect at least through the end of 2014. According to Notice 2012-59, if more guidance is issued on the 90-day waiting period limit for periods after 2014, plans and issuers will be given adequate time to comply with any additional or modified requirements.  For employers to fall into the large group category they must employ an average of at least 50 full-time employees during their prior calendar year. In order to qualify for the tax credit you cannot be eligible for other minimum essential health coverage which also includes coverage offered under an employer plan that is affordable to the individual and provides minimum value.  Employers may be liable for several penalties under ACA’s “pay or play” rules.  Employers will find themselves liable for these penalties if any of their employees receive a tax credit through an exchange based plan.  To go along with the group penalties and fines, individuals are also required to pay a penalty if they do not carry minimum essential coverage. The IRS has issued three notices requesting comments on how they should determine minimum value under ACA. Bear in mind that these do not give us any final guidance but they do illustrate what we all may be facing come 2014.

 

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