ACA – Employer Reform Requirements

ACA – Employer Reform Requirements

These are the employer requirements and the associated timeline for implementation.

2012-2013

Health insurance value reporting on 2012 w-2’s.

Flexible Spending Account limitation revisions – In 2013 Flexible Spending Accounts (FSA) were limited to $2500 in pre-tax contributions.  These accounts can be used for medical, dental, and vision out-of-pocket costs without paying the FICA and federal income tax on the dollars saved.  Traditionally these accounts had a Use It or Lose It provision where any dollars still remaining in the account at the end of the year were forfeited.  In 2014 this provision was revised to allow up to $500 to roll-over to the next calendar year.

Additional Medicare Taxes

Exchange Notification – All employers, regardless of employee size or whether they contributed to a company sponsored plan or not, were required to notify all employees about the exchanges, how to access them, and where to go to find help by October 1, 2013.  In addition, this information must be provided to every new employee within the first 30 days of their employment.  Initially, a penalty was to be implemented for non-compliance, but was waived for the first year.  It is important that all employers include a copy of the notification in their new-hire packets and a signed copy for their own personnel records.

2014

Transitional Reinsurance Program – Health Insurance Sector Fees

Essential Health Benefits – No more annual or lifetime limits.

No Pre-existing condition exclusions for new applicants – As of January 1, 2014, insurance carriers can no longer deny coverage to persons with a pre-existing medical condition.  For those with pre-existing health issues, there is a possibility that your coverage may come from a provider which pools together similar individuals into a high-risk category.  This pooling effect creates cooperative buying power, therefore keeping premiums much lower than if purchased individually.

Revised cost-sharing limitations for employers – Prior to 2014, when an employer provided a company sponsored benefits program, they were required to pay for at least 75% of the monthly premium for every employee on the plan.  After January 1, 2014, this contribution percentage has been lowered to 50% when using the SHOP Exchange.  NOTE:  In the State of Washington, plans by private carriers are being allowed to offer their programs with the same minimum due to a lack of carrier participation in the state’s small business exchange.

Dependent Child Coverage Extension – Dependents can now be covered under a parents plan even if they are not participating in a school of higher education until age 26.

Waiting Period Limits – Waiting periods were reduced for people with pre-existing conditions.

Individual Mandate – All individuals must be enrolled in an ACA Qualified Plan or face penalties on their 2014 tax return.

Exchanges – All state and federal exchanges go live to allow for individuals and businesses under 50 FTE’s to enroll in health care options.

2015

New IRS Reporting for Businesses

New Plan Options for SHOP Exchanges

Employer Mandate Enforcement – Businesses with 50-99 FTE’s must provide a company sponsored health insurance program.

2016

Employer Mandate Enforcement – All businesses with 50 FTE’s or more must provide a company sponsored health insurance program.

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