The Affordable Care Act (ACA) will be plaguing employers for many years, but there are a few things that require immediate attention, says attorney Ashley Gillihan: women’s health preventive care, W-2 reporting, and PCORI fees.
Gillihan, who is Counsel in the Atlanta office of Alston & Bird LLP, made his suggestions at a recent webinar sponsored by BLR/HRHero.
Complying with the Women’s Health Preventive Care Requirement
First of all, employers should already be complying with women’s health preventive care requirements, in effect January 1 for calendar plan years, says Gillilan.
Non-grandfathered plans that are subject to health insurance reforms must comply with women’s health preventive care requirements, that is, provide 100%, no cost, in-network preventive care for women in accordance with HHS’s recommended preventive service guidelines.
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Gillihan says he gets two particular questions about this requirement:
- What relief have the agencies provided regarding no cost contraceptive coverage? For organizations with religious concerns relating to contraceptive coverage, Gillihan says there are two types of guidance.
First, there is permanent 6033 relief for not-for-profit religious organizations, that is, organizations that have a primary purpose of inculcation of religious values, that primarily hire and primarily do business with believers, and that are 6033 organizations.
Second, there is temporary relief for other not-for-profit organizations that operate in line with their religious values but religion is not their main reason for existence. Future guidance should clarify this situation.
The easiest way to get more details on this, says Gillihan, is to visit www.ebsa.gov, click on the right under ACA, and link to HHS’s website where you’ll find the pieces of guidance that they’ve issued for those organizations.
- Do plans have to cover over-the-counter contraceptives? If you look at the recommended preventive treatment guidelines, says Gillihan, contraceptives are provided “as prescribed.” However, in the benefits world, that doesn’t always mean only items that are only available by prescription. Certainly the contraceptives have to be recommended by a physician. The general consensus, bolstered by informal guidance, suggests that only prescription contraceptives have to be provided. And that’s what most companies are doing, says Gillihan.
What You Need to Know about W-2 Reporting
By January 31, 2013, most employers will have to include the value of “applicable employer sponsored coverage” provided during 2012 in Box 12 of the W2.
What is not “applicable employer sponsored coverage”? Again, says Gillihan, go to the ebsa wiebsite (http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage) and navigate to the IRSD rules where there’s a great chart, part of which is presented below:
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Form W-2 Reporting of Employer-Sponsored Health Coverage |
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Coverage Type |
Form W-2, Box 12, Code DD |
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Report |
Do Not Report |
Optional |
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Major medical |
X |
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Dental or vision plan not integrated into another medical or health plan |
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X |
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Dental or vision plan which gives the choice of declining or electing and paying an additional premium |
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X |
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Health Flexible Spending Arrangement (FSA) funded solely by salary-reduction amounts |
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X |
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Health FSA value for the plan year in excess of employee’s cafeteria plan salary reductions for all qualified benefits |
X |
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Health Reimbursement Arrangement (HRA) contributions |
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X |
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Health Savings Arrangement (HSA) contributions (employer or employee) |
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X |
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Archer Medical Savings Account (Archer MSA) contributions (employer or employee) |
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X |
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Hospital indemnity or specified illness (insured or self-funded), paid on after-tax basis |
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X |
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Hospital indemnity or specified illness (insured or self-funded), paid through salary reduction (pre-tax) or by employer |
X |
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Gillihan says he receives the most questions about three issues:
Is there a Small Employer Exemption? Yes, says Gillihan and the employer aggregation rules are not applicable? If the entity is required to file fewer than 250 W-2s for the year, you do not have to include this information on W-2.
What about reporting COBRA coverage? What you report on W-2 is the actual cost, not including 2% premium, says Gillihan. In addition, you don’t have to report coverage after employee has terminated. This has led many to think they don’t have to ever report COBRA, but that’s not true, says Gillihan. For example, someone might be on leave of absence or reduction of hours.
How do we report partial months of coverage? This is the most common question, says Gillihan. For example, if a person is , hired mid-month or terminates mid-month—how deal with that? The IRS gave significant flexibility to use any reasonable method, so, you could report a full month’s worth of coverage as long as do it consistently. Clearly the better practice is to prorate, but that causes angst, Gillihan says, and since the rules do allow a simpler method ….
In tomorrow’s Advisor, PCORI fees plus In tomorrow’s Advisor, PCORI fees plus an introduction to a critical extended webinar.
Employers should also be thinking about whether they will qualify as “large employers” for the play or pay provisions next year. It’s the number of full-time employees you have this year that will determine whether you’re covered in 2014.