Employers and the Affordable Care Act October 1, 2013 is an important date for the implementation of the Patient Protection and Affordable Care Act (”ACA” popularly known as “Obamacare”) – it is the date employers are scheduled to give notice to their employees of coverage options in anticipation of implementation of the ACA on January 1, 2014. This Client Alert provides basic information and useful links to bring you up to date on ACA, and it addresses questions and concerns raised by the notice requirement. Most importantly, we can confirm there is no penalty for missing the October 1 notice “deadline” according to the U.S. Department of Labor (“DOL”). Click on this link to the DOL site for more information: dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html Whether employers provide notice on October 1 (which remains the best practice), or soon thereafter, they must provide the required notice to their employees. There are two forms provided by the DOL for this purpose. One form covers employers who do not offer health insurance; the other is for employers who do offer insurance to some or all of their employees. Model notice forms can be accessed through this link, and are clearly marked: dol.gov/ebsa/pdf/FLSAwithplans.pdf. Employers who do provide health insurance need to know the actuarial value of their plan to answer Question 14, which asks, “Does the employer offer a health plan that meets the minimum value standard?” There is an explanation of this question on the model form. The question can be answered by obtaining the actuarial value of the plan from the carrier or insurance broker. (The actuarial value of the plan is an expression of how much the insurance company pays for services versus how much an individual pays out of pocket.) Sixty percent (60%) or higher meets the minimum value requirement of the ACA. For more details, see the DOL links. It is worth noting that small businesses with fewer than 25 employees may be eligible for tax credits if they offer employee health insurance and the average annual income of their employees is less than $50,000. It also is worth noting that employer provided insurance may affect subsidies for employee dependents which are available through the ACA marketplace for insurance (known as the Exchange). Again, we refer you to the links on the DOL website for more information. In short, the DOL website is the best source of information in these early days of implementation. The Technical Release detailing employers’ responsibility under ACA is available here: dol.gov/ebsa/newsroom/tr13-02.html.
Posted on: Mon, 30 Sep 2013 22:45:20 +0000
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