PPACA Review: Timeline for effective provisions
Even though the Employer Shared Responsibility mandate, commonly known as “Play or Pay,” has been delayed until January 1, 2015, other provisions of the Affordable Care Act are still in effect. The main reason behind the delay is to allow time for the Obama Administration to simplify and clarify the reporting requirements outlined in PPACA and, in turn, give employers, insurers and third parties time to prepare for these requirements.
The delay is an opportunity to properly prepare for the requirements in 2015. Employers should use these additional twelve months to determine whether the Play or Pay mandate will apply to them (Counting Period for Play or Pay) and which employees will be affected (Measurement Period for Play or Pay).
In an effort to prepare for ACA Requirements in 2014 and 2015, below is a summary of provisions that have been delayed and those that remain in effect.
Delayed until 2015
- Employer Shared Responsibly Mandate (Play or Pay): Employers must offer coverage to employees who work on average 30+ hours per week or be subject a penalty.
- Affordability: Coverage must be affordable to avoid a penalty. The employee’s share of the coverage cost cannot exceed 9.5% of the employee’s household income.
- Minimum Value: Coverage must provide minimum value to avoid a penalty.
- Limit on Out of Pocket Maximum Amounts for Some Group Health Plans: By 2015, all health plans must have an overall limit on out-of-pocket costs for medical, drug and other benefits combined.
Remain Effective in 2014 for Employers
- Summaries of Benefits and Coverage
- Marketplace Notice: Employers must distribute exchange notices to employees by October 1, 2013 and to new employees upon date of hire.
- PPACA Fees:
- Patient-Centered Outcome Research Institute Fees (“PCORI Fees”) must be paid in July 31, 2013 for years ending before January 1, 2013.
- The first Transitional Reinsurance Fee must be paid on or before January 15, 2015.
- Heath Insurance Industry Fee (HIT)
- W-2 Reporting: Employers must continue to report the aggregate value of health coverage on Forms W-2
- Counting Period for Employer Mandate (Play or Pay): Employers that need to determine whether they will be subject to the employer mandate in 2015 (50 or more full-time or full-time equivalent employees in 2014) will need to record employee hours in 2014.
- Measurement Period for Employer Mandate (Play or Pay): Employers with variable hour employees need to measure the hours worked for existing employees and new hires to determine if they are full-time employees who need to be offered coverage.
- Click here to learn more about determining a full-time employee
- Benefit Mandates For All Plans: Plan design requirements for all plans continue to apply. These included a maximum 90-day waiting period, no limits on pre-existing conditions or essential health benefits, and expansion of wellness incentives.
Remain Effective in 2014 for Individuals
- Individual Mandate: Individuals must have health care coverage or pay a penalty.
- Marketplaces: Public exchanges are still scheduled to offer coverage effective January 1, 2014.
- Subsidies: Premium subsidies will be available to help eligible individuals buy policies on the exchange.
About the Author
Kate O’Sullivan is a Client Service Manager at William Gallagher Associates (WGA) in the Employee Benefits Group. She is responsible for servicing a number of small, mid-size and large accounts, and works on the WGA Health Care Reform Committee.