PPACA Health Care Reform

WHAT WE KNOW TODAY AND WHAT EMPLOYERS ARE REQUIRED TO DO NOW

A fair amount of compliance remains unknown, contingent upon court decisions and political process, yet please allow me to share a few observations and then I’ll get to the actions that are fact certain … at least as of the moment.

Overview

Average total health care costs per employee are expected to rise 5.9%, to $11,664 for 2012 … the total health care cost that employees now shoulder (premiums plus out-of-pocket costs) has risen to 34.4% for 2012 from 33.2% inthe prior year according to leading risk management firm, Towers Watson.  With the increasing cost of employer-provided health care, employers will continue to face real decisions as they relate to their role in employee health care, now complicated by new play or pay penalties, that provide some incentive for employers to continue coverage rather than risk significant fines, figuring into the mix.  Part of this decision process should include an analysis of the cost effectiveness of paying the penalty or the increasing premiums, considering the recruiting and retention value of benefits , among other.  What I am seeing is that employers are playing wait-and-see game — deferring significant changes for the moment.

What we do know that requires compliance:

  • W-2 Reporting – For 2012 tax year, employers that are required to issue 250 or more W-2 Forms must report the aggregate cost of employer-sponsored group health coverage on employees’ 2012 W-2 Forms.
  • Flexible Spending (FSA) Accounts – Limited to $2,500 for plan years beginning Jan. 1, 2013 or after.
  • Preventive Care for Women – Effective for plan years beginning on or after Aug. 1, 2012, non-grandfathered health plans must cover specific preventive care services for women without cost-sharing requirements.
  • Medicare Tax – Effective Jan. 1, 2013, the tax rate increases by 0.9 percentage points on wages over $200,000 for an individual ($250,000 for married couples filing jointly). Employers will have to withhold additional amounts once employees earn over $200,000 in a year.
  • Notice to Employees of Exchanges  – Effective March 1, 2013, employers must provide notice to employees of the health care reform insurance exchanges.
  • Summary of Benefits and Coverage Health plans and issuers must provide a Summary of Benefits and Coverage to participants and beneficiaries that includes information about health plan benefits and coverage in plain language effective with the first open enrollment period or for newly eligible participants who enroll other than through open enrollment effective Sept. 23, 2012 or after.
  • Advance Notice of Plan Changes – A health plan or issuer must provide 60 days’ advance notice of any material modifications to the plan that are not related to renewals of coverage. Notice can be provided in an updated Summary of Benefits and Coverage or a separate summary of material modifications.

 

There’s more and more will be forthcoming – Get good advice!

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