Written by Emmanuelle St. Jean, MPH, NACo Program Manager.
It is not just the magnitude of the Affordable Care Act and the regulations issued by the federal government that are resulting in counties being a bit overwhelmed. The law’s complexity and implications are so profound they require careful thought and strategic planning for provisions affecting counties as the employers of more than 3.3 million Americans, whether they go into effect in a few weeks or years from today. Understanding this, the National Association of Countie
s has revised its Counties as Employers Toolkit to assist county leaders in navigating the law. The information provided in this post and the Toolkit is for informational purposes only and does not constitute legal advice. We recommend counties seek counsel on how the law will affect their plans specifically.
Today, we highlight 5 areas counties should be taking action to not only comply with the law, but to also meet the health care needs of their employees.
Notification of the Health Insurance Marketplace – Whether your employee is full-time or part-time or is enrolled in your county’s health plan, counties must notify all of their current employees in writing of the existence of the Marketplace by no later than October 1, 2013. New hires must be notified within 14 days of their start day. The Department of Labor has released two model notices that employers may use. While one model is for those that provide health insurance coverage, the other is for employers that do not.
Waiting Periods – Plan years beginning on or after January 1, 2014 can no longer require employees and their dependents to wait more than 90 calendar days for health insurance coverage to become effective. This provision applies to both grandfathered and non-grandfathered group health plans. The 90 calendar days includes holidays and weekends. If an employer has a 90-day waiting period, coverage will become effective on the employee’s 91st day. Employers are not required to have a waiting period according to the federal regulations.
Wellness – The ACA promotes workplace wellness by increasing wellness incentives from 20 percent to 30 percent. Tobacco cessation program incentives can be up to 50 percent. This change applies to both grandfathered and non-grandfathered health plans and fully insured and self-funded group health plans.
Employer-Shared Responsibility – Beginning in 2015, employers with 50 or more full-time equivalent employees that do not offer affordable health coverage to 95% of their employees will face a financial penalty if one of their full-time employees seeks coverage from the Health Insurance Marketplace and receives a tax credit subsidy. Employers will not be penalized if a part-time employee receives a premium credit. Although, part-time employees are included in the full-time equivalent calculation to determine if an employer has 50 or more 50 full-time equivalent employees, part-time employees are not included in the penalty calculations. Moreover, employers are not permitted to reduce an employee’s hours, discharge, and/or retaliate against the employee should s/he receive a subsidy. There is no penalty for employers with fewer than 50 full-time equivalent employees. To determine your penalty, please the graphic in the toolkit.
Tax on High-Cost Insurance, also known as the “Cadillac Tax” - While this controversial and significant tax provision will not go into effect until January 1, 2018, it is essential counties with fully insured or self-funded health plans begin exploring the implications of this tax as soon as possible. This tax is placed on insurers, but it may be passed onto employers. Insurers of employer-sponsored health plans with expenses exceeding $10,200 for individual coverage and $27,500 for family coverage must pay an excise tax of 40 percent on the difference between the threshold and the value of the health insurance benefits. Counties with large numbers of older adults, women, and people in high-risk professions, such as law enforcement and firefighters, will have higher thresholds to protect them from the impact of the tax. The thresholds for the coverage of others may increase in the future, but guidelines on the tax have not yet been issued by the Internal Revenue Service.
Should you have any questions, please contact Emmanuelle St. Jean, MPH, Program Manager at 202.942.4267 or firstname.lastname@example.org.