Administration Delays Employer Mandate Until 2015Kristen Dougherty, Senior Vice President, Sales Manager, Univest Insurance, Inc.
A significant part of the Affordable Care Act
(ACA) includes the employer mandate,
which requires businesses with 50 or more
employees to offer insurance to all employees working a
minimum of 30 hours per week as of January 1, 2014, or pay a
penalty. In addition, that coverage must be deemed "affordable
and adequate coverage" as defined by the legislation. In July,
the mandate was delayed until January 1, 2015. What does
that mean for mid- to large-sized employers? Most important,
it provides more time to plan for this significant change. Many
employers may be offering insurance, but not necessarily to
those in the 30-40 hour per week range as well as variable
What Should Employers Plan to Do in 2014?
- Monitor guidance and prepare to determine size for "large employer" status in 2015.
- Review health plan coverage for "minimum essential" benefits.
- Review and plan for necessary changes to meet "minimum value" and "affordability." This is important for completion of the required Exchange Notice to be distributed to all employees.
- Set the measurement period and stability period to determine full-time employee status of variable hour and seasonal employees for 2015.
Despite the delay of the employer mandate, there are quite a few ACA provisions applicable now and beginning in 2014.
- Individual mandate – Effective January 1, 2014, individuals are required to have health care coverage or be penalized.
- Employers are required to distribute the Exchange Notice no later than October 1, 2013, including information about whether their employer-sponsored coverage is affordable and provides minimum value.
- Preventive care, including women's health and contraceptives, is required under most plans.
- No pre-existing condition exclusions for all individuals under age 19 and, in 2014, applicable for all of the population.
- Medical Loss Ratio – insurance carriers are required to spend 85% of premium on claims and activities to improve health care quality for large plans and 80% for small plans.
- Most taxes and fees will be included in plans beginning in 2014, but some, such as the Patient Centered Outcome Research Institute Fee, are already included in premiums.
- Small Group Rating Methodology changes January 1, 2014 – insurance carriers are only allowed to rate based upon age (limited to a 3:1 ratio), tobacco use (limited to a 1.5:1 ratio), geographic area and plan selected (tier and type of coverage).
With so many changes that have already occurred and more due to take place in the near future, you need a trusted advisor. Call Univest Insurance to speak with a benefits consultant today, 800-220-3077. You can also sign up for our monthly Employee Benefits newsletter by emailing firstname.lastname@example.org.
Insurance products offered through Univest Insurance, Inc. are obligations of the issuing insurance companies, not obligations or deposits of or guaranteed by any bank and are not insured by the FDIC or any other agency of the United States.