Navigating Health Reform is Getting Tougher (OPINION)

Whether you’re a business owner or the CEO of a publicly traded company, you may be thinking that running an organization, taking care of customers and managing a workforce in hopes of achieving a healthy bottom line is enough on your plate. Think again.

Where employee benefits and compensation previously occupied a bullet point on page two of your annual business plan, this line item now requires its own compliance strategy, a task force, additional accounting staff, and outside consultants to predict, project and prepare for the impact of the ever-morphing law known as the Affordable Care Act.

This legislation is complicated and difficult to understand for even professionals trained to understand it. Moreover, it is harder to comply with a law that continues to be rewritten, revised and parts repealed on a seemingly monthly basis. It is, without question, regulated and, while companies scramble to stay within the swim lanes, the government agencies charged with enforcing it are adding enforcers en masse. As with other employment, discrimination and health-related laws, such as FMLA, ADA and HIPAA, someone is going to be the poster child for non-compliance and find himself punitively fined and publicly flogged in the national media.

This will, no doubt, be the year mistakes are made. While companies were given a political reprieve this past year with key provisions of the law, “Pay or Play” is in play for 2015. While many large employers took the extra time to prepare, some are either just now figuring out the numerous compliance aspects required or will figure them out too late. Failing to plan in this case will truly be planning to fail.

As a simple guide, these three things should be on the top of your “to-do” list in 2015:

Understand the shared responsibility and employer penalty rules — This is the “biggie” for 2015 for companies with 100 or more employees. If a company is considered an applicable large employer (ALE) and does not offer health coverage that is affordable and provides minimum value to full-time employees (and dependent children), it is subject to a penalty if any full-time employee receives a government subsidy for health coverage through the federal exchange. These rules were set to take effect on Jan. 1, 2014, but were delayed until this year. Companies with 50 or more employees will have to comply with these rules in 2016.

Determine full-time status — If you’re a large employer as described above, it is more important now than ever to correctly identify full-time employees, to offer them coverage and to report on them each year. This is a rather simple description of a much more complicated task. Part-time and seasonal employees have to be considered in the equation, along with different measurement periods for determining full-time status. You’ll want to break out the calculator and probably make some bar graphs for this one.

Consider plan design changes — If your current plan is grandfathered, meaning minimal changes have been made since the law was enacted in 2010, you may want to keep it that way. Grandfathered plans are exempt from some of the ACA’s mandates, which can add additional costs to your health plan. If your plan is non-grandfathered, you will want to consider the cost-sharing limits when making changes. While the annual deductible limit was repealed in 2014, the out-of-pocket maximum still applies and cannot exceed $6,600 for employee-only coverage and $13,200 for family coverage. If you have an HSA-compatible, high-deductible plan, the maximum is even lower.

With many of these regulations and reporting provisions, there are numerous caveats, exemptions and details within details that every employer should explore carefully. If your company doesn’t have a compliance plan to navigate this regulatory minefield, you should get one. Now. 

Tom Hayes is the national practice leader for employee benefits at Regions Insurance, a top-30 national insurance brokerage with 23 offices in eight states in the Southeast and Indiana. He can be reached at [email protected].