While many employers might be “in the groove” of ACA compliance by now, this is no time to get complacent. There are more changes coming just around the corner in 2015 for those who sponsor group health plans.
Probably the most significant development for 2015 is the shared responsibility penalty for applicable large employers and related reporting requirements. These “pay or play” rules were supposed to go into effect on January 1, 2014, but the IRS delayed the requirements for one year until January 1, 2015.
The Kaiser Family Foundation has also identified three “problem areas” employers need to be especially aware of:
- Grandfathered status. Grandfathered health plans are exempt from many of the ACA’s rules and reporting requirements, including the prohibition of annual and lifetime dollar limits on coverage, and the essential health benefits rules. But few things remain unchanged forever, and grandfathered plans can easily change enough over the years to jeopardize their eligibility for grandfathered status. According to Kaiser, just 37 percent of companies still have a grandfathered health plan, a huge decline from the 72 percent that had at least one grandfathered plan in 2011. If you have a grandfathered plan, make sure you determine whether it will maintain its grandfathered status for 2015.
- Extended waiting periods. Beginning in 2014, non-grandfathered health plans are prohibited from making eligible employees wait more than 90 days to get insurance coverage. But the Kaiser report noted that 27 percent of covered employees are still waiting three months or longer, and 4 percent are waiting four months or longer. Many employers have been confused about how to calculate waiting periods. The rule is that you have to count all days – including weekends and holidays – to calculate the 90 days.
- Wellness incentives and penalties. According to Kaiser’s research, 19 percent of employers offer certain “perks” for those who participate in a wellness plan, including lower premiums, reduced cost sharing, or higher contributions to health reimbursement accounts or health savings accounts. But employers who go overboard dishing out overly generous incentives or especially harsh penalties can quickly get into hot water. The maximum penalty under the ACA is 30 percent of the value of single-employee coverage, except for nonsmoker incentives, which max out at 50 percent.
And don’t forget to check these other compliance issues as we head into 2015:
- Cost-sharing limits. Review your plan’s out-of-pocket maximum to assure compliance with the ACA’s limits for 2015 ($6,600 for self‐only coverage, $13,200 for family coverage). If you have a health savings account (HSA)-compatible high-deductible plan (HDHP), your plan’s out-of-pocket maximum limit is $6,450 for self-only coverage, $12,900 for family coverage.
- Health FSA contribution limit. Stay tuned for IRS guidance on the health FSA limit for 2015. Once the limit is announced, confirm that your health FSA won’t allow employees to make pre-tax contributions over that amount for 2015. Open enrollment is the perfect time to communicate the 2015 health FSA limit to employees.
- HIPAA certification. Stay up to date on HIPAA certification requirements from HHS, and confirm whether your health plan is a CHP that is required to provide the initial HIPAA certification.
2015 is just around the corner, and now is the time to review these and other upcoming requirements and develop your strategy for compliance. And for ACA-compliant COBRA solutions, contact the experts at COBRAGuard.