President Obama announced a one-year delay (January 1, 2015), in the Patient Protection and Affordable Care Act (PPACA) employer mandate.
Employers with 50 or more full-time equivalent employees (employees who work 30 or more hours per week) must provide health care coverage or pay steep penalties. Therefore, organizations will not have to “play or pay” (see below) for another year which allows companies more time to review their health programs and conduct further cost analysis.
However, many of the provisions of PPACA for medical health plan requirements are still in place. There is still a ban on annual dollar limits on essential health benefits, a 90-day limit on eligibility waiting periods, new out-of-pocket limit maximums, the elimination of preexisting conditions exclusions for adults, and coverage of clinical trial participant costs. Also remaining in place, for instance, are the reform act’s requirement that most employer-provided health care include coverage for recommended preventive care—including contraceptive services with no cost-sharing—and the requirement for employers subject to the Fair Labor Standards Act to provide written notices about government –run exchanges to each of their employees and to all new hires by Oct. 1, 2013.
“Play or Pay” Penalties Delayed
Starting in 2015, employers with 50 or more full-time employees or equivalents that do not offer coverage to their full-time employees face a penalty of $2,000 times the total number of full-time employees if at least one full-time employee receives a premium tax credit/subsidy to purchase coverage through a government-run health insurance exchange established under the PPACA.
Full-time employees are those who average 30 or more hours of work per week.
Employees with household income between 100 percent and 400 percent of the federal poverty level are eligible for tax credits for exchange coverage if they do not have access to affordable employer-sponsored coverage that is of at least a minimum value.
If employers with 50 or more full-time employees or equivalents do offer coverage to their full-time employees but the coverage is “unaffordable” (9.5 percent of income or higher) to certain employees or does not provide “minimum value” (the plan’s share of total cost of benefits under the plan is less than 60 percent), the employers face a penalty of $3,000 times the number of full-time employees receiving a premium tax credit/subsidy for exchange coverage (not to exceed $2,000 times the total number of full-time employees).
References:
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Health Care Law’s Employer Mandate Delayed Until January 2015 , Stephen Miller, 7/3/2013 Shrm.org
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Four Things You Should Know About the Employer Mandate Delay, United Benefit Advisors, July 2013
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Health Care Law’s Employer Mandate Delayed Until January 2015, PricewaterhouseCoopers, July 2013
