Employer Health Plan Compliance Information for 2015
September 1, 2014
The year is half over, and business owners and human resources professionals have some important work to do to meet some upcoming federal compliance deadlines.
Here are some of the most important requirements, broken down by the applicable federal law:
Patient Protection and Affordable Care Act
The federal government cut employers some slack by putting off the Affordable Care Act's employer mandates from 2014 to 2015. But most employers will need to come within compliance of the ACA by January 1st. Employers with 50 full-time equivalent employees or more must offer qualifying health plans to their full-time employees, or pay a fine to the federal government. For the purposes of the Affordable Care Act, a full-time worker will qualify for employer-subsidized health insurance if the worker is employed for 30 or more hours per week.
The Department of Labor and Department of Health and Human Services have announced a few rules and provisions that may help employers make the transition. But there appears to be no serious movement afoot to grant employers a further one year reprieve. Even if the Republicans take the Senate in the mid-year elections, they will not actually take office until after the 2015 compliance deadline passes.
The new health care reform measures cap the number of days employees must be employed before they qualify for health care benefits at 90. Furthermore, employers may not force workers to wait until the first day of the month following the 90 day waiting period before covering their employees.
Employers must also identify which employees are full-time, defined by the ACA as working 30 hours or more per week. An average of 130 hours/month also qualifies workers as full-time. Hours of service include any paid leave accrued.
For those employees with non-standard hours, such as commissioned employees, adjunct faculty members for education institutions, certain airline employees and the like, the employer must use a reasonable accounting method to account for those hours worked.
Furthermore, student interns are included. They are not excluded from the ACA and may still qualify for benefits. However, federal or state work/study students are not counted as full-time employees (these individuals may obtain coverage via their school, or, if under age 26, via their parents' plans, if applicable.)
Employers may, however, require an employee to work a specific number of hours prior to eligibility for employer-sponsored health plans. Federal law limits the number of hours to 1,200. Employers may start the clock after an 'orientation' period that is as long as a month.
v The Affordable Care Act also requires some additional reporting burdens from employers. However, the federal government has not yet produced the forms that employers will be required to use to be in compliance.
Health Reimbursement Arrangements
IRS Notice 2013-54 defines the ability of employers to reimburse employees who purchase individual health plans. The IRS allows for two methods for integrating a reimbursement arrangement into a group health plan, taking into account both preventative care requirements and the annual and lifetime dollar limits. If you have an HRA.
The ACA established limits on out-of-pocket costs as follows:
Individual plans: $6,350
Family plans: $12,700
Individual plans: $6,600
Family plans: $13,200
Further details are available in the Federal Register.
Plan ID Numbers
Plans with annual receipts of $5 million or more must obtain their unique plan ID number by 5 November, 2014. Smaller plans have one more year to come into compliance.
Individual Coverage Issues
If you haven't taken a close look at how your plan defines "spouse" when it comes to health coverage and perhaps with other benefits as well, it's time to review it. Laws concerning same-sex marriages have changed significantly over the last year, specifically in the District of Columbia, Pennsylvania, Delaware, New York, Maryland and California.
Flexible Savings Plans
Previously, the 'use it or lose it' rule was in effect. But more recent guidance from the IRS allows workers to carry forward up to $500 from one plan year to the next. Consider updating your FSA plans to allow this as well.
Alternatively, employers can choose to enact a grace period of up to 2½ months
The following forms of benefits will not have an adverse effect on the ability of workers to qualify for a subsidized health plan via the ACA exchanges:
- Stand-alone dental plans - whether the employee contributes toward the cost or not.
- Stand-alone vision plans - whether the employee contributes toward the cost or not.
- Some employee assistance plans (EAPs)
- "Wrap-around" plans if the employer's medical plan is not reasonably affordable by the employee.
More details are available on the Federal Register here.
The Department of Labor has issued some revised Model Notices for both COBRA and CHIPRA. You can find links to the new Model Information Notices here, both in English and Spanish.