In yesterday’s Advisor, we offered Michael P. Aitken’s suggestions for employers reeling from the passage of the Patient Protection and Affordable Care Act (PPACA). Today, more of Aitken’s tips, and an introduction to an extraordinary policy development program.
Aitken’s advice came during the Society for Human Resource Management’s (SHRM) recent annual Conference and Exposition in San Diego. Aitken is SHRM’s director, government affairs.
Will the Employer Pay a Penalty Beginning in 2014?
In 2014, certain employers will have to pay a penalty if their health care offerings don’t meet PPACA standards. Aitken offers a decision tree for employers:
First, are you a large employer? You are if you had at least 50 full-time equivalent workers including full time (30+ hours per week) and part-time workers (prorated) and excluding season workers (up to 120 days per year).
If no, there is no penalty.
If yes, Are any of your full-time employees in an exchange plan and receiving a premium credit?
If no, there is no penalty.
If yes, Do you have more than 30 full-time employees?
If no, there is no penalty.
If yes, Do you provide health insurance?
If no, pay a monthly penalty of 1/12 x $2,000 x (Number of full-time employees – 30)
If yes, pay monthly penalty, the lesser of:
1/12 x $2,000 x (Number of full-time employees – 30)
or
1/12 x $3,000 x (Number of full-time employees who receive credits for exchange coverage)
Source: Congressional Research Service analysis of P.L. 111-148 & P.L. 111-152
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HR Considerations
Aitken recommends that HR managers consider the following:
- Brief senior leadership on the new law and potential impact on organizations’ health plan(s).
- Determine whether all plan designs satisfy the “minimum essential coverage” requirements.
- Review definition of coverage eligibility in health care plan.
- Adjust waiting period definition if more than 90 days.
- Estimate number of potential subsidy and voucher eligible employees.
Healthcare Spending Accounts
With regard to healthcare spending accounts, Aitken says the new law:
- Caps health FSA annual contributions to $2,500 in 2013.
- Excludes over-the-counter medications (unless prescribed by a doctor) as reimbursable expenses under FSAs, health reimbursement accounts (HRAs), medical spending accounts (MSAs), and health spending accounts (HSAs) in 2011.
- Penalties on nonmedical HSA distributions are increased to 20 percent in 2011.
Nursing Mothers
The PPACA amends the FLSA to require employers of 50 or more to:
- Furnish “reasonable break time for an employee to express breast milk for her nursing child.”
- Provide a place where the employee can express breast milk. The place must be somewhere other than a bathroom and must be “shielded from view and free from intrusion from coworkers and the public.”
This requirement appears to be effective immediately, says Aitken, although regulatory guidance should provide clarification.
And that seems to sum up the status of PPACA: Regulatory guidance should provide clarification.
You’ll clearly be rewriting your healthcare policies pretty regularly for the next decade. And what about all your other policies? Detailed? Accurate? Up to date? Our editors estimate that for most companies, there are 50 or so policies that need regular updating (or maybe need to be written). It’s easy to let it slide, but you can’t afford to back-burner work on your policies—they’re your only hope for consistent and compliant management that avoid lawsuits.
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