In a clear indication of how much the Patient Protection and Affordable Care Act has drawn the focus of employers and HR personnel, a talk from Alston & Bird’s John Hickman called “Health Reform: Fall 2012 Edition” had attendees standing in the wings to listen once it appeared that seats had run out. Pens furiously scratched at pads and fingertips hopscotched on tablets as Hickman laid out many of the ways – no longer escapable – that PPACA will change how health benefits are administered and run.
“Everything stays,” Hickman says of this year’s Supreme Court decision ruling the law constitutional. “Well, it made the decision easy, it didn’t make life easy.”
Hickman, speaking at the 25th Annual Benefits Forum & Expo in Phoenix on Monday, said the changes for providers, sponsors and administrators range from immediate to years away and from barely noticeable to paradigm-shifting.
Among the more pressing changes are: mandatory preventative care requirements, including women’s care options; summaries of benefits and coverage for open enrollment starting on the 23rd of this month; comparative effectiveness research on 2012 lives-covered; extension of dependent coverage to age 26, regardless of marriage or college status; and W2s that report the value of health coverage. This last rule, which applies to any company with more than 250 W2s, can be used as a “positive communications opportunity,” Hickman said.
“It’s not taxable, but it’s got to be reported,” Hickman said. “And it’s got to be reported this year … we want to communicate the true value of health care coverage.”
But of course the big “game-changing” rules take effect in 2014, and employers may need much or all of that time to prepare for them. Strict and total 90-day waiting periods for the beginning of coverage (“Not the first of the month following three months,” Hickman said. “It’s 90 days.”). Employer-shared responsibility reporting. “No pre-existing conclusions anymore for anyone,” as Hickman definitively put it. All of the above are effective Jan. 1, 2014.
Which brought Hickman to the big decision facing employers: Pay or play.
“There are two parts to this tax, and it is tax,” Hickman said after earlier citing Chief Justice John Roberts by name. “The sledgehammer and the tack hammer.” The former refers to the massive penalty employers would face, should they fail to over coverage to all full-time employees under the new law’s requirements – a whopping $2,000 per employee. The latter is the fee companies would pay should their coverage prove too expensive,
“If your coverage is more than 9.2% of the pay on the employee’s W2, then they might buy coverage on the exchange, and when they do, there’s a tax on you, but it’s only $3,000 for each employee,” Hickman said.
The silver lining here, Hickman said, is that employers who’ve laid good ground work won’t have to deal with abandoned-ship health plans or benefit-spurred exodus.
“Inertia works to your favor, as long as you extend coverage and make it available.”
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