Just days before the federal exchange now known as the “Health Insurance or ACA Marketplace,” goes live on October 1, federal agencies are working hard to issue regulations governing other aspects of the health care law, including two that will impact self-funded employers.
The Marketplace is likely to have minimal direct impact on large employers but subsidies may be available to help employees that are not offered employer coverage to buy health insurance. Subsidies will not be available to employees and dependents that are offered employer coverage, except in limited circumstances where coverage is deemed unaffordable to the worker or does not meet minimum value, and the employee’s household income is less than 400% of the federal poverty limit.
In 2014, employers will not be penalized if their full-time workers access subsidies, although that is expected to change for 2015. In fact, the IRS has proposed new regulations discussed below that will help them enforce “pay or play” penalties in the future.
Employees that have questions about their eligibility for subsidies can visit healthcare.gov, call 1.800.318.2596 or speak with an insurance agent. It is likely that employers will get questions, including whether the coverage offered is “affordable” to the employee and provides minimum value. Federal agencies encourage employers to provide this kind of information via a “Notice of Coverage Options” that should be sent to employees by October 1, although the Department of Labor’s Employee Benefit Security Administration (EBSA) recently issued a FAQ that clarified there is no penalty associated with not providing the notice.
EBSA Offers Assistance
Speaking of the EBSA, if employers have questions about compliance about the aforementioned Notice of Coverage Options or with any Affordable Care Act provision enforced by EBSA, they are encouraged to contact the agency at 866.444.EBSA or the regional office at 312.353.0900. Employers can also use the web form at www.askebsa.dol.gov. The message delivered by EBSA staff at a compliance seminar in September was, “We are here to help, and we do answer our phone.”
EBSA and the IRS share the enforcement of federal benefits laws governing private employer plans, with the IRS having the main responsibility for enforcing tax provisions (ie. “pay or play”). EBSA would enforce provisions related to plan standards, wellness programs, HRAs, FSAs, 90 day waiting periods, grandfathering, HIPAA, GINA and ACA-related market reforms.
In fact, the EBSA said it is willing to walk through any wellness program designs with employers to help them ensure that their health-contingent wellness programs are compliant with new regulations. “We’re really not focused on penalties and enforcement at this point, we’re really focused on compliance assistance,” EBSA staff said.
IRS Released Proposed Reporting Regs
The Internal Revenue Service is asking for employer feedback on two different regulations that will impact self-funded employers once they are final. Proposed Section 6056 regulations require employers to file a return about the health care coverage they have or have not offered to workers, while proposed Section 6055 regulations require plans, including self-insured employers, to file a return that reports information on each individual that is provided minimum essential coverage. The Alliance has summarized these proposals in this health policy brief and is likely to submit comments to the IRS by the November 8, 2013 deadline.