The Affordable Care Act (ACA) has made a number of significant reforms to group health plans since it was enacted in 2010. Many of these changes became effective in 2014, including health plan design changes, increased wellness program incentives and reinsurance fees. More changes will take effect in 2015 for employers that sponsor group health plans. To prepare, review the new requirements and develop a strategy for compliance.
First, do you have a grandfathered plan? It must be one that existed when the ACA was enacted on March 23, 2010. If so, determine whether it will maintain its grandfathered status for the 2015 plan year. If you make certain changes to your plan that go beyond permitted guidelines, your plan is no longer grandfathered. If your plan will lose its grandfathered status for 2015, confirm that it has all of the additional patient rights and benefits required by the ACA.
Next, review your plan’s out-of-pocket maximum to make sure it complies with the ACA’s limits for the 2015 plan year: $6,600 for self coverage and $13,200 for family coverage. Also, make sure your plan limits an employee’s annual pre-tax salary reduction contributions to a health flexible spending account (FSA) to $2,500. Watch for an announcement later this year from the IRS on what the health FSA limit will be for 2015.
Review the health coverage you provide to your employees to determine if it is subject to reinsurance fees for 2015. Both health insurance issuers and self-funded group health plans must pay fees to a transitional reinsurance program for the first three years of the Exchanges’ operation (2014-2016). The fees will be used to help stabilize premiums for coverage in the individual market. Fully insured plan sponsors do not have to pay the fee directly, and certain types of coverage are excluded.
Make sure your health plans files a statement with the Department of Health and Human Services certifying compliance with HIPAA’s electronic transaction and operating rules. The ACA has extended the first deadline to Dec. 31, 2015, although small health plans may have additional time to comply.
Determine your status as an applicable large employer (ALE). ALEs that do not offer health coverage to their full-time employees and dependents will be subject to “employer shared responsibility” or “pay or play” penalties if any full-time employee receives a government subsidy for health coverage through an Exchange. The IRS has delayed the penalties and related reporting until Jan. 1, 2015.
To count your employees, determine whether you will use the entire 2014 calendar year or an acceptable period of at least six consecutive calendar months during 2014. Calculate the number of full-time employees or full-time equivalents (FTEs) for each calendar month in the period using either a monthly measurement method or look back method. If your result is 50 or more, you are likely an ALE for 2015.
If you have a non-calendar year plan, determine whether you qualify for the transition relief that allows you to delay complying with the pay or play rules until the start of your 2015 plan year. Also confirm whether all full-time employees are covered by the transition relief.
Finally, review your health plan design. Confirm that health plan coverage will be offered to all full-time employees and their dependent children in 2015. Review the cost of your health plan coverage to determine whether it’s affordable for your workers.
To learn more about compliance for group health plans in 2015, please contact The Benefits Firm.
Ph: (502) 451-4560
620 S. 3rd Street, Suite 102 Louisville, KY 40202