With the 2013 holiday season in full swing, it’s time to count down to the end of 2013. While many may be eagerly anticipating the treats and treasures that are in store, some of us are also (perhaps not so excitedly) monitoring the passing days for another reason:
When the Affordable Care Act was passed oh so long ago in March 2010, Jan. 1, 2014 loomed large as the date when many of the big changes brought about by health care reform would take effect. At the time, 2014 seemed both much too close and reassuringly far away. Back in 2010, who knew what events could intervene? The law could be struck down by the Supreme Court or repealed by a new Congress or even a new President.
Well, those things didn’t come to pass and the implementation of the ACA has marched on, although we’ve seen some recent stumbles. As we approach specific effective dates, we are seeing the bigger ACA picture broken down into its various moving parts, which are not fitting together all that smoothly. The responsible agencies, along with the White House, seem to be scrambling to fill in all of the remaining holes while also attempting to fix problems that have already arisen. But still, we move forward.
Anyone who finds it challenging to keep up with all of the ACA developments that are occurring certainly isn’t alone. It would take a much longer blog post to discuss everything that’s been going on lately, but here are a few recent developments you should be aware of:
- Small employers looking to offer their employees a (federal) SHOP exchange plan will be able to use direct enrollment through an agent, broker or insurer. The agent, broker or insurer can help apply for SHOP eligibility for purposes of the small employer tax credit.
- HHS has confirmed that self-funded, self-administered health plans will not be subject to the reinsurance fee (which will be reduced for 2015 for those plans still subject to it).
- NOTE: HHS’s recent proposal confirmed their earlier suggestion that self-funded, self-administered health plans would not be subject to the reinsurance fee but this change would apply for 2015 and 2016 only. The reinsurance fee will be reduced for 2015 for entities still subject to it for that year (health insurance issuers and self-insured plans that use TPAs for claims processing and adjudication and enrollment). I realized after publishing that this may have been unclear, so I apologize if it caused any confusion! Broker Briefcase users can check out the “Reinsurance Program Changes for 2015” document for more details.
- Under a transition rule, some insured plans that would otherwise have to be canceled because they did not meet the ACA’s minimum requirements could remain in force. However, whether to allow this relief is up to each individual state and several have decided against it.
- In conjunction with required ACA changes, the IRS has relaxed the “use-or-lose” rule for health FSAs, allowing up to $500 in carryover of unused funds for plans that don’t include a grace period.
- Any employer, regardless of size, that offers a non-calendar year cafeteria plan can allow participants to make a mid-year election change for the 2013 plan year due to ACA developments for 2014.
Looking ahead to 2014
Finally, a few thoughts on some things to keep in mind as we move into 2014:
- Although the employer mandate penalties have been delayed until 2015, employers need to start planning ahead and putting their plans into action throughout 2014. This is an important area where you can support your clients in the coming months, if you aren’t already.
- Whether a company is considered a large employer (and potentially subject to penalties) in 2015 will depend on the number of full-time and full-time equivalent employees they have in 2014. So even though the penalties have been delayed a year, some of the related rules will matter for next year.
- The proposed pay or play regulations that came out earlier this year contained a number of special rules for 2014. Now that the penalties aren’t effective until 2015, it’s not clear whether those special rules will carry forward. A Treasury official has said that the IRS is aware that employers are interested in an answer on that topic and there should be guidance at some point soon.
- Those proposed regulations have yet to be finalized. Final regulations were on the IRS’s regulatory agenda for 2013 but the release date may have been impacted by the government shutdown in October. It’s hoped that final regulations will answer some open questions about the employer mandate, but they likely won’t differ significantly from the proposed version due to statutory requirements.
As we move ahead, everyone affected by health care reform will continue to face challenges: keeping up on the latest developments, figuring out what they mean and making decisions based on what is known, when it’s impossible to know everything about the ultimate impact of all the changes. There is no blueprint or roadmap for 2014, but the uncertainty means opportunity for insurance brokers. Employers will continue to need guidance and support to navigate the next couple years effectively, and many will turn to their broker for that support. Those brokers who can combine preparation with flexibility can rise to these challenges and continue to be successful in today’s ever-changing market.