Health Care Reform: Don’t Hit the Snooze Button Just Yet

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On July 2nd, the Obama Administration postponed the effective date of the Pay or Play Provision within the Affordable Care Act (ACA).  Beginning January 1, 2014, employers with 50 or more full-time employees in the prior calendar year were required to offer minimum value, affordable coverage to all benefit eligible employees.  In light of the delay, employers have until January 2015 to comply.  Employers that do not comply are required to pay costly, non-tax deductible penalties.

Since March 23, 2010, many have taken a wait-and-see approach as it relates to the ACA.  Employers delayed taking action and waited to see if the U.S. Supreme Court would find the ACA unconstitutional.  After the Court’s ruling, compliance efforts were once again put on the back burner as we waited to learn how the results of the election in November 2012 would impact the ACA’s future.  It wasn’t until late 2013 that employers began to appreciate the gravity of what compliance with this law required or would cost their businesses.

While the Obama Administration’s announcement is good news for the many employers who are frantically scrambling to comply with the Affordable Care Act, this delay is limited to just one portion of the law.  Beginning January 2014, employers with less than 50 employees will still be subject to new underwriting rules that are expected to result in substantial rate increases for many employers.  The exchanges in all states remain scheduled to begin accepting applications in October 2013.  Despite the fact that the employer Pay or Play penalties will not be collected in 2014, financial assistance will be made available to individuals with an annual household income of up to 400% of FPL.  In just a few months, health plans will be required to remove all pre-existing condition waiting periods or exclusions regardless of the age of the insured.  The new wellness plan regulations will also go into effect as planned.  Finally, employers are also expected to distribute the Notice of Exchanges no later than October 1, 2013.  Even with the delay of the Pay or Play provision, a lot of work remains to be done.

So the good news is that the alarm is no longer set for December 31, 2013 for the Pay or Play provision.  However, we caution employers against hitting the snooze button one too many times for fear they may oversleep.

To continue preparing for the Affordable Care Act and its impact on your organization, contact our team at Mueller QAAS.

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