Frequently Asked Questions

 

Q. Where can I go to read the full Patient Protection and Affordable Care Act bill?

 

Q. What is the timeframe of the bill rollout?

Click here to view the bill timeline.

 

Q. Is the PPACA a "sure-thing"?

A. Yes. The reelection of President Obama means that the PPACA will move forward. Repeal or major reform does not have the necessary votes in Congress. Adjustments are possible, but the principal aspects of reform will move forward.

 

Q. What are the fundamentals of the PPACA?

A. The most important things to know are:

 

Q. Will every business be impacted?

A. If you have even ONE employee, you need to know about the PPACA. ALL EMPLOYERS must comply with certain provisions - some now and some in the future. For example:

 

Q. What are the immediate requirements for employers who provide group health?

A. The PPACA has effective dates going back to enactment on March 23, 2010. Your plan must CURRENTLY include:

 

Q: How does a company determine its number of full-time or full-time equivalent employees?

A: Employers can use any period of at least six consecutive months in 2013 to measure the number of full-time employees. Only employees working in the United States are counted. If a business hires seasonal workers and the workforce exceeds 50 full-time employees for 120 days or less during a calendar year, the employer is not considered to have 50 full-time employees.

The bottom line is that determining full-time status is complex. Employers should review carefully with their own legal counsel.

 

Q. How do I determine if my plan provides “minimum value”?

A: A plan provides “minimum value” if it pays at least 60% of the cost of covered services (considering deductibles, copays and coinsurance). HHS has developed a minimum value calculator that can be used to determine if a plan provides minimum value.

Q: How is “affordable” coverage determined?

A: Coverage is considered “affordable” if employee contributions for employee only coverage do not exceed 9.5% of an
employee’s household income. There are three safe harbor methods for determining affordability:

 

Q: How are dependents defined?

A: Dependents include children up to age 26. Spouses are not considered dependents per the legislation, so employers
are not required to offer coverage to spouses.

 

Q: Do employers have to offer coverage to 100% of their full-time employees?

A: Employers will meet the requirement to offer affordable and minimum value coverage to “substantially all” full-time
employees if they offer coverage to 95% of full-time employees and their children (or five full-time employees, if greater). If
any of the remaining 5% of full-time employees who are not offered coverage purchases coverage on an Exchange and
receives a premium subsidy, the employer will pay an annual penalty of $3,000.

 

Q: What if an employer doesn’t currently offer dependent coverage?

A: If an employer does not currently offer dependent coverage, no penalty is due for the plan year beginning in 2014 if
the employer takes steps to offer dependent coverage during the plan year that begins in 2014. For plan years beginning
in 2015 or later, employers must offer coverage to full-time employees and their dependent children up to age 26 to
avoid penalties.

 

Q: When do the penalties begin?

A: The employer mandate is effective beginning January 1, 2014. However, the regulations provide transitional relief for
employers with “fiscal year” plans (plan years that begin on a date other than January 1). The transitional relief allows
employers that had fiscal year plans as of December 27, 2012 to avoid paying penalties as long as they offer affordable
and minimum value coverage as of the first day of their plan year that begins in 2014. Employers cannot change their plan
year now to take advantage of this transitional relief.

 

Q: How will an employer know if a penalty is due?

A: If a full-time employee receives subsidized coverage through an Exchange, the employer will be notified and given an
opportunity to respond before the IRS requires payment of the penalty.

 

Q. How do penalties apply to companies with common ownership?

A. Companies that have common ownership or are part of a control group are combined for purposes of determining whether they are subject to mandate. However, any penalties would be the responsibility of each individual company.


MLR Rebates

 

Q. What are the three sets of guidance?

A. Three sets of guidance, Department of Labor (ERISA and fiduciary duties), HHS (regulation), and IRS (tax consequences). All should be reviewed with benefits counsel.

 

Q. When must fund distrubution be completed?

A. Fund distribution must be completed within three months of receipt!

 

Q. What should I determine as an employer?

A. Review plan documents. Employers need to determine if and how the refund will be passed through to plan members. Are they plan assets? If so, were they used/distributed in accordance with fiduciary duties? If not, fiduciary liability may exist. You should also determine if group contracts and plan documents need to be modified to address plan asset issues.


W-2 Reporting

 

Q. Who is applicable?

A.

 


Q. What actions should be taken?

A. Businesses must report the cost of employer-sponsored healthcare coverage (both employer and employee portions). COBRA rates can be used to determine aggregate cost. Applies to coverage paid with pre-tax and post-tax dollars.

 

Q. What is included?

A. In:

May Be In (or at least a portion thereof):

 

Q. What is excluded?

A. Out:


Exchange Notice

 

Q. What is required?

A. The PPACA requires employers to provide written notice to all employees of the upcoming availability of state insurance exchanges no later than 3/1/2013. 

 

Q. What is the status?

A. 1/24/2013: DOL, IRS, HHS deferred this requirement to a date uncertain in the fall of 2013.


PCORI Fee

 

Q. Who is applicable?

A. Carrier or self-insured employer. (Exceptions: HIPAA-excepted policies, certain expatriate plans, stop-loss or idemnity reinsurance, EAPs, disease management, and wellness programs if no "significant" medical benefits.)

 

Q. What is the fee?

A. Patient-Centered Outcomes Research Institute Fee. First year, $1 per covered life and then $2 per covered life.

 

Q. When does it go into effect?

A. Assessed for plan years ending after 9/30/2012. Fees end after 9/30/2019. First payment is due 7/31/2013.


Other Issues

 

Q. Are there any other issues I should be aware of?

A. In addition to the requirements already outlined, each employer needs to:


The Heart of PPACA is Coming in 2014

 

Q. What are the key elements of PPACA that are becoming effective on 1/1/2014?

A. The key elements of PPACA that are becoming effective on 1/1/2014 are:


Shared Responsibility or "Play or Pay"

 

Q. Who is applicable?

A. Employers with an average of 50 full-time or full-time equivalent employees.

 

Q. What does it entail?

A. Employers must provide health coverage to employees (including dependent children) that is "affordable" and provides "minimum value" or pay a tax to the federal government if one of their employees secures coverage from a state exchange and receives a federal premium subsidy.

 

Q. What are the specific IRS notices and proposed regulations?

A.

 

Q. I am an employer with more than 50 employees. What should I be aware of?

A. First, you must determine if you have the required number of employees:

 

Q. What is considered "affordable"?

A. Coverage is considered affordable if the employee's contribution for single coverage is not more than 9.5% of the employee's modified adjusted gross household income. Guidance provides three alternative safe harbors for determining affordability:


Q. What is the minimum value?

A. The PPACA requires plans to provide minimum value to "full-time employees (and their dependents)."

 

Q. What are the penalties of not following this requirement?

A. Penalties attach when an employee receives coverage from an exchange and a federal premium subsidy.

 

Q. I'm a small employer. What should I be aware of?

A. Call your:

Be sure to read all the regulations and monitor government sites daily.

 

Q. What are some other resources for small employers?

A. Use a Professional Employer Organization (PEO):


Resources and Assistance

 

Q. What should I do if I have questions or need help?

A. Call Resourcing Edge at 214.771.4411. We're happy to assist you in any way we can.