If your company has more than 50 employees and you’ve been putting off doing anything about the Affordable Care Act (ACA) employer requirements mandate, you’re not alone. But you also may be playing with fire warns Trish Gates, a benefits coordinator at Barrow Group, LLC. As early as January 1, 2015, employers with more than 100 employees may start to see fines incurred (January 1, 2016, for employers with 50-100 employees).
“Will the mandate deadline be extended? Perhaps, but I wouldn’t bet on it,” she says. “Wait it out and your company’s needs will likely get lost in the shuffle. You’ll have fewer options and fewer of your questions will get answered.”
Derek Flynn, an attorney and shareholder of Munsch Hardt Kopf and Harr, PC, agrees.
“There are critical business decision points that should be addressed now,” he says. “What do your employees want? Will your decision affect recruiting efforts? What are the tax implications? Can both you and your employees afford it? These questions take time to resolve.”
We asked both Gates and Flynn to help us compile a list of actions to take right now to help prepare your company for the ACA deadline.
- Determine your “play or pay” status. If you’re near the 100 full-time employee (FTE) threshold, this can be tricky. Flynn recommends using a full-time equivalent calculator such as the online FTE calculator from the Health Law Guide for Business—or contact a tax advisor or accountant—to determine FTE status. Keep in mind that companies combined under common ownership are considered a single employer and part-time employees may count toward Employer Shared Responsibility. Also, those working an average of at least 30 hours per week or 130 hours per month are now considered full-time employees. There are seasonal, ownership and foreign-based employee exemptions as well. You may find utilizing temporary staffing could be a solution in this area.
- Check the validity of grandfathered plans. Was your plan in place before March 23, 2010? Then it may not need to change, even if it doesn’t meet new ACA requirements. However, certain changes to the plan since 2010—including any significant raise in co-insurance charges—will cause it to lose grandfathered status. For this reason, Willis Group Holdings found the plans for two-thirds of employers surveyed in 2011 had already lost grandfathered status, despite a intention for them to be grandfathered.
- Window shop. To get the best idea of costs, Gates recommends starting with a census of employees that includes age, date of birth, gender, and whether each will want employee-only or family coverage. “The census should happen now so that there’s time to submit to several carriers,” she explains, adding that some carriers will take up to 10 business days to provide options. “And that’s during these relatively slower times. I plan on taking my vacation now because I anticipate a rush toward the end of the year. Keep in mind, also, that many insurance offices are closed the last two weeks of the year.”
- Get a feel for what employees need. Be sure that any coverage you are considering includes minimal essential health requirements for all eligible employees. “These essential benefits include services such as outpatient care, emergency services, mental health and substance abuse care, rehabilitation services and devices, and preventive care, to name a few,” explains Flynn. Gates adds that you don’t necessarily need to cover all employees with the same plan. “A staffing firm, for instance, may cover core administration with a higher-coverage plan, while it covers other staffers with a minimal essential plan.”
- Provide notification/waiver forms. “An employee has a choice to accept or decline coverage once it is offered,” says Flynn. “But you must offer it or pay the fine. If the coverage offered met the minimum value and was affordable, the employee that declines may not qualify to save money on monthly premiums or out-of-pockets costs but you are under no obligation to pay a portion of their monthly premiums.”
Gates adds, “Providers have great tools for allowing employees to opt in or out of any insurance offering online, via email, or via traditional paper, whatever is most convenience for the employer and its staff,” she explains. “Some providers can even set up a toll-free number for just that employer. But the longer you wait the few options you’ll have at your disposal.”
Gates recommends taking a look at the following chart by The Henry J. Kaiser Family Foundation, which provides a snapshot of possible penalties for those who are not in compliance with the ACA employer requirements. (Click here to enlarge the image. Source: The Henry J. Kaiser Family Foundation.)