When the Patient Protection and Affordable Care Act (PPACA) was signed into law in 2010, it seemed that implementation of most things was a far way off. Now nearly two years later, many of its provisions are beginning to take effect. The following requirements go into effect this year:
- Plans must report the value of employer-sponsored health insurance coverage on W-2s.
- Plans must provide a four-page summary of benefits (.pdf) to enrollees using a format that will soon be finalized. Thereafter, plans must provide a 60-day prospective notice of plan changes when they impact the summary of benefits described above.
- Plans must pay an annual fee of $1 per plan participant for the first plan year ending after September 30, 2012 to support comparative effectiveness research (.pdf). This fee increases to $2 per participant in future years.
- Non-grandfathered plans will be required to cover new set of women’s preventive health services at no cost beginning after August 1, 2012.
Some regulations on some PPACA provisions have yet to be released. The following are such provisions that may impact plans in 2012 or 2013:
- “Quality of care” reporting requirements are not yet defined, but once they are, non-grandfathered plans will have to report to HHS about whether the plan improves health outcomes, prevents hospital readmissions, improves patient safety and implements wellness. Additional information may be required by HHS.
- Release of “Essential Health Benefits” regulation may or may not impact employer plans in relation to annual and lifetime limit restrictions
The following PPACA provisions are expected to take effect in 2013:
- A $2,500 annual limit on health FSA deferrals.
- Employers’ deductions for the amount of the Medicare Part D retiree subsidy will become taxable.
- The FICA Medicare tax rate will increase by .9 %(to 2.35%) for higher income individuals, but the employers’ share does not increase.
- Plans must certify compliance with “administrative simplification” rules regarding the electronic exchange of information and electronic transfers.
- Plans must provide notice to employees to make them aware of health insurance exchanges.
As PPACA provisions and regulations become available we will continue to notify you of changes here and on the Health Policy section. We encourage you to work with your advisors and attorney if you have questions about your plan’s compliance with these requirements or how to implement them.
Automatic Enrollment Update
PPACA requires employers with more than 200 full-time employees to enroll new full-time employees automatically in one of their health care plans. These employers must also continue to provide coverage to current enrollees unless an employee takes affirmative action to opt out.
Previous FAQ guidance, issued in December 2010, stated that employers are not required to comply before DOL completes its rulemaking process. New guidance issued in early February indicates that DOL has not established a timeline for issuing detailed guidance on this topic, considering “the need to coordinate the work it will be undertaking to develop guidance relating to automatic enrollment with the guidance being developed” regarding other provisions such as the employer shared responsibility requirements and the 90-day limitation on waiting periods.
The new guidance provides that guidance related to automatic enrollment will not be ready to take effect by 2014.