What the Changes in Obamacare Implementation Mean to Employers
Not surprisingly, given the number of transitional and safe harbors included in the interpretive regulations related to the Affordable Care Act, a.k.a. ‘Obamacare,’ the most recent change is that involving the implementation of the ‘play-or-pay’ provisions applicable to large employers, which were to have taken effect Jan. 1, 2014.
The change provides for a one-year delay in the implementation of the employer-shared responsibility (ESR) provisions of the law.
Why the Delay?
According to White House business liaison Valerie Jarrett, “business owners expressed concerns about the complexity of the law’s reporting requirements,” and “businesses needed more time to get things right.” Apparently, the administration took heed of the many and varied concerns expressed by employers subject to the play-or-pay provisions and will use the one-year delay period to revamp and simplify the reporting process, and will convene employers, insurers, and experts to propose a smarter system, which, hopefully, will result in a more streamlined, workable system for large employers.
What Portions of the ACA Were Delayed?
• The ESR provisions. Under these provisions, large employers (those with 50 or more full-time employees, including full-time-equivalent employees) who choose not to offer health-insurance coverage to their full-time employees, or offer coverage that fails to provide a minimum level of coverage and/or is not ‘affordable,’ are subject to an ESR tax if even one of those employees qualifies for and purchases coverage on the state or federal exchange.
— Former deadline: this ESR provision was to be effective Jan. 1, 2014.
— New deadline: the ESR effective date is apparently Jan. 1, 2015.
• The reporting requirements. The ACA includes reporting requirements for insurers, self-insuring employers, and other entities of parties that provide health coverage. It also requires certain information from employers regarding health-insurance coverage offered to its employees.
— Former deadline: reporting was scheduled to begin in 2015 for coverage provided on on or after Jan. 1, 2014.
— New deadline: reporting is now apparently scheduled to begin in 2016 for coverage provided on or after Jan. 1, 2015.
What should employers take away from this reprieve? They will benefit from both the time extension and the potential revamping and simplifying of the originally imposed requirements under the employer-shared provisions of the law. The additional time will provide large employers the opportunity to:
• Get their written plan documentation and safe-harbor measurement rules in order;
• Organize and comply with employee-notice requirements;
• Develop operational implementation policies and procedures;
• Develop administrative procedures that will allow for seamless reporting processes;
• Consider the pros and cons of using existing health-coverage plans, get new ones, or determine whether it is more cost-effective to simply pay the regulatory tax (play or pay); and
• Decide if the company will hire an outside ACA-implementation specialist, designate the responsibility to an existing employee, or hire a full-time employee to be the ACA implementation point person.
Large employers should keep in mind that the delay in implementing the play-or-pay mandate also applies to the collection of otherwise applicable fines.
What Should Employers Do?
Since the revamping and simplification of the provisions will hopefully be less complicated than the existing ones, it would be wise for large employers to pay particular attention to notifications and information regarding the new changes as soon as they become effective.
Rosemary J. Nevins, Esq. specializes exclusively in management-side labor and employment law at Royal LLP, a woman-owned, SOMWBA-certified, boutique, management-side labor and employment law firm; (413) 586-2288; firstname.lastname@example.org.