Health care reform is poised to create a host of challenges for individuals and businesses, but it will be the medium to small companies that face the biggest decisions. There is no question that there will be significant issues facing employers over the next number of years. These issues will most likely mean higher health care costs and more administrative time.
News Update- The employer mandate for employers with 50 or more employees has been delayed to January 2015.
Key Issues & Dates for Employers
- Compliance date is January 2014.
- Mandate to provide coverage or pay fines (firms with less than 50 employees not subject to mandate). Moved to January 2015.
- New insurance exchanges for the small employer and individual markets.
- $2,500 per plan year health FSA contribution cap (plan years on or after January 1, 2013).
- Health Insurance exchanges initial open enrollment period.
- New small-business tax credit to purchase coverage.
- Elimination of tax deduction for retiree drug subsidies.
- Existing plans grandfathered as of date of enactment from some, but not all, of the new plan requirements.
2014 Key Dates
- Health insurance exchanges start
- Financial assistance for exchange coverage of lower-income individuals
- No annual dollar limits on essential health benefits
- Auto enrollment sometime after 2014
Small Group Key Issues (25 or less employees)
- Guarantee issue–No underwriting (Not in self -funded)
- Pre-existing conditions are covered
- New Reporting Begins- 2014 employers must provide reports to IRS for each individual.
- Community Rating (Not in self -funded)
- Small Business Health Care Tax Credits- up to 35% in 2014 and up to 50% in 2015
- Small Business Health Options Program- access to new programs
- Summary of Benefits and Coverage (SBCs) Disclosure Rule- Employers will be required to provide employees with a standard “Summary of Benefits and Coverage outline.
- Limits on Flexible Spending Account Contributions
- New Medicare Assessment on Net Investment Income-a 3.8% tax will be assessed on net investment income such as taxable capital gains, dividends, rents, royalties, and interest for taxpayers with Modified Adjusted Gross Income (MAGI) over $200,000 for single filers and $250,000 for married joint filers
- 90-Day Maximum Waiting Period
- Workplace Wellness Programs-The Affordable Care Act creates incentives to promote wellness programs
All these factors should be part of your health issue review and strategy and we are prepared to help you. Call our office today and let us guide you through the reform.