Are You Really Ready?

January 1, 2014 is a Significant Step Closer to Full ACA Implementation.

Benefits professionals across the country have read thousands of pages of legislation (and thousands more pages of final regulations and guidance that have been issued). The readiness or panic of late spring 2013 was quickly diminished by a July 2 decision to delay penalties under the Employer Mandate. This caused many employers to take a step back and reassess decisions regarding their ACA strategies they had already made or that were close to being finalized. What is still not fully known is how this delay will impact cost, if at all.

What is known, however, is that the law was not delayed and full implementation (including all employer penalties) begins in 2015. This includes the Employer Mandate and all required federal reporting. All indications are that there will be no further transition relief, and the ACA is now going forward and is a reality.

October 1, 2013 brought the opening of the Marketplaces and the mandated (without penalty for non-compliance) employee Marketplace notice. It also brought about the federal and state Exchanges, and, as we all now know, those Exchanges have seen more than their share of technical hiccups. Frustration, data integrity issues, and the inability to get people enrolled in Exchange plans are likely making open enrollment for employers even more complicated and confusing than usual.

But there is still ample time to get prepared, right?

Time flies, especially in this new era of Health Care Reform. Before we know it, 2015 will be here. In just a few months, many companies will begin their strategic planning initiatives for 2015 and many questions will come into play, including:
• Pay or Play?
• Private Exchange?
• Self or Fully Insured?
• What should my measurement period(s) be?
• What is my communication strategy with employees?
• What is affordable?
• How will the FPL change for 2015 impact decisions?
• Will auto enrollment be a major factor now that we know the cost of the Marketplace plans?
• How will we get the look-back data we need through 2014 in order to comply in 2015?

All these questions must be answered, and senior executives are going to want to know sooner rather than later how to manage through this altered landscape of employer-sponsored health benefits.

Measurement periods are critical to managing the workforce, especially in highly variable populations. In order to do a full 12-month measurement for 2015, the best measure would be October 2013 (preferably around October 4 or 5) through September 2014. This standard measurement period will meet all the requirements under the law regarding look-back period maximums, while allowing enough time to prepare properly for system readiness and employee communication for the annual enrollment period. Gathering this data will be daunting and is likely to catch many employers by surprise. A company should also assess the viability and impact of all possible measurement and stability periods to ensure the best outcome for costs, as well as to align HR strategies in context of corporate goals. Having the required 12 months of look-back data through 2014, as well as complete analyses of strategic options and impacts, will become increasingly important starting January 1, 2014.

In addition, plan expense forecasting, penalty potential, auto enrollment, and high cost plan analysis will all become critical to managing employer-sponsored plans, and managing the accrual necessary for an exit and pay strategy.

Four long years have gone by since the passage of the ACA. While many took a step back and a deep breath this summer, now is a critical time for employers to begin their due diligence and be a step ahead.

January 1, 2014, is an important date.

January 1 not only begins the first year of federal subsidies, the individual mandate, and Exchange coverage, but it also marks the countdown to the next stage, when employer penalties and reporting will be in place.



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