ACA Compliance for Employers: When to start Preparing for 2015?

Start early in 2014 to ensure proper collection of service hours, income, and benefits enrollment.

The delay of the employer mandate was a huge sigh of relief for many employers, as it was all but impossible to rush to understand and implement the necessary changes to systems, processes, and plans of the tens of thousands of pages of ACA laws, final regulations, and proposed guidance. The good news for the employers allowed them to delay the need to enact required affordability changes and even delay some strategies to reduce employees’ average service hours to less than 30 hours per week. Insurers and the Administration may not consider this good news so favorably, however, with the ACA rollout this year.

Because businesses were not forced to comply with the employer mandate, this may have lead to less people enrolling in the Marketplace plans, thereby reducing the number of covered individuals with viable health insurance. The unfortunate and undeniably bad rollout of the Federal Marketplace has frustrated millions of Americans who were not able to apply for coverage in the first 60 days of the go-live. The Administration faces large shortfalls in funding projected from the employer mandate and the need for 7 to 9 million Americans to be active with coverage in the Marketplace by March 31, 2014.

The employer delay, SHOP delay, and problems prove that the ACA—with all its complex rules, regulations, and logistical challenges surrounding enrollment, privacy, and reporting—will not be easy for anyone for a while.

The delay in the employer mandate means that any employers who do not offer minimum essential coverage that provides minimum value and is affordable to its employees will not face a penalty until 2015. However, employers must comply with a whole host of other regulations that are in effect, including (but not limited to):

  • out-of-pocket limits (as long as no changes were made and offer of medical and Rx are separate),
  • preexisting condition elimination,
  • dependent coverage through age 26,
  • women’s preventive care, and
  • preparing and distribution of the Summary of Benefits and Coverage and Form W-2 reporting.

Employers have been encouraged to use 2014 to comply with the ACA in its entirety, and voluntarily report to the government (when reporting specifications are released) so that the transition to 2015 will be easier.

To prepare for 2015, employers who have not actively begun the process of analysis around “pay or play” through the use of measurement, stability, and administrative periods—and amended all plans to meet the new requirements—should start early in 2014 to set the strategy and begin testing to ensure proper collection of service hours, income, and benefits enrollment. Doing so will ensure forecasts of medical cost for the organization is strategically aligned with the employer’s financial projections.

The assumption that payroll and benefits providers will provide this service and that the aggregation of the required data for implementing measurement and stability periods is easy, could be a costly one, especially if preparation begins late in calendar 2014. If a company has multiple payroll systems, separate HR and benefits data systems will have many complex problems in meeting the requirements under the ACA. Most employers need to bring this data in to some centralized place. Add to this the fact that auto enrollment into the lowest cost qualified health plan, single coverage for 2015, has not been repealed at this time. Remember, any changes to plans and eligibility must be communicated to employees at least 60 days prior to the effective date. Employees and leadership will need plenty of communication and education to ensure a smooth transition into 2015.

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