After months and months (and months!) of seeing election-related advertisements, I must say that it’s nice to have a bit of a break right now from them.
However, now that the Presidential election has passed, we must take a look at a very important subject — Health Care Reform.
At CBG Benefits, we are always trying to ensure that our clients have the knowledge they need to deal with critical pieces of legislation. Thus, I thought it was important to take a moment to discuss some of the key things that you need to know in light of President Obama’s re-election.
Actions that Employers Need to Take
One of the most important thing that employers need to do right now is consider their future plans related to their role in employee health care.
Soon, employers may have to make some big decisions about whether to continue providing coverage to their employees. The “pay or play” penalties certainly may provide some incentive for employers to continue coverage, since they will be at risk for significant penalties if they do not. But some employers might decide that it’s more cost-effective to pay the penalty than to pay for the increasing costs of health care for employees and their families.
On the other hand, uncertainty among employees about the quality and cost of individual health coverage continues to make employer-provided health coverage an attractive recruiting and retention tool.
Because of these advantages, most employers plan to continue offering coverage for now.
Upcoming Deadlines to Keep an Eye On
Employers that will continue to sponsor group health plans for the near future must prepare for upcoming deadlines. Here are some of the significant health care reform provisions with looming effective dates:
Summary of Benefits and Coverage
Health plans and issuers must provide an SBC to participants and beneficiaries that includes information about health plan benefits and coverage in plain language. The deadline for providing the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period is the first open enrollment period that begins on or after September 23, 2012.
The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) effective for plan years beginning on or after September 23, 2012.
60-Days’ Notice of Plan Changes
A health plan or issuer must provide 60 days’ advance notice of any material modifications to the plan that are not related to renewals of coverage. Notice can be provided in an updated SBC or a separate summary of material modifications. This 60-day notice requirement becomes effective when the SBC requirement goes into effect for a health plan.
$2,500 Limit on Health FSA Contributions
The health care law will limit the amount of salary reduction contributions to health flexible spending accounts to $2,500 per year for plan years beginning on or after January 1st, 2013.
Outstanding Issues That We’ll Be Keeping an Eye On
After the Supreme Court upheld the Health Care Reform law, we started to see guidance provided by regulatory agencies. However, there are a still number of issues regarding regulations.
Some of these issues include:
Employer Pay or Play Mandate
The agencies are expected to, and have indicated that they will, issue more guidance for employers to help them determine how to comply with the shared responsibility provisions of the law.
The Department of Labor is required to issue regulations implementing the rule requiring large employers that offer health coverage to automatically enroll new employees in the health plan (and re-enroll current participants).
Nondiscrimination Rules for Fully-insured Plans
Under health care reform, non-grandfathered fullyinsured plans will not be able to discriminate in favor of highly-compensated employees with respect to their health benefits. The IRS delayed the effective date of this rule for additional regulations, which have yet to be issued.
Are You Ready for Health Care Reform?
As we get closer to full implementation of the health care reform law, questions certainly linger about whether the framework is in place for all pieces to be operational by their deadlines.
Insufficient staffing of the responsible agencies is one potential issue, along with employer and state government hesitation or inability to implement certain parts of the law.
However, compliance efforts are likely to pick up now that the election is over. Thus, the bottom line is this — employers must ensure that they are taking steps now to plan for future changes to their health care and benefits program offerings.
CBG Benefits Group Inc. will certainly continue to keep a close eye on health care reform. Please stay tuned to our Blog for future commentary.
Of course, if you have any questions today, please feel free to contact our team!
This blog post is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.