If you haven't already taken steps toward compliance with the next wave of Affordable Care Act requirements, now is the time to do so. Though the large employer coverage mandate has been pushed back to 2015, there are several new requirements for 2013 and 2014, and the IRS has made it clear that 2014 is the time to prepare for the ramifications of this historic legislation.
On October 10, 2013 Friedman LLP will be conducting a seminar entitled Healthcare Reform: Where Do You Stand On Compliance? (seminar details are given below). At this seminar, the effects of the Affordable Care Act on nonprofits will be discussed in detail, and professionals knowledgeable about the Act will be available to answer your questions. The following is a snapshot of some of the issues to be discussed at the seminar.
Employee Number Test
To determine their obligations under the Affordable Care Act, nonprofits must first determine how many full-time equivalent employees (FTEs) they have. There is a prescribed method for making this determination, which must also take into account employees whose hours aren't tracked.
Once this employee number is determined, nonprofits will know their employer category:
- Large Employers: If there are 50 or more FTEs, the organization qualifies as a large employer and is subject to the "play or pay" mandate. Large employers may have to pay a penalty if they fail to offer affordable health coverage to 95% of their full-time employees (those averaging 30 hours a week) and their children.
- Small Employers: If there are 50 or fewer FTEs, the organization is exempt from the play or pay mandate, but may be eligible for incentives to voluntarily offer health coverage. Organizations with 25 or fewer employees may be eligible for tax credits to help pay for coverage, and employers with 100 or fewer employees (50 in some states) may be eligible for participation in the Small Business Health Options Program ("SHOP") Exchanges.
Nonprofits should also make sure that the health plan they offer, or are thinking of offering, is deemed "affordable" for its employees. Employers need to choose a safe harbor method for running the affordability test (W-2, current rate of pay or federal poverty level method) and review cost-sharing subsidies and wellness credits to ensure that the organization will not be subject to the affordability penalty.
Issues of Immediate Concern
In the meanwhile, there are new requirements going into place in or before 2014 that may require immediate employer action. Now is the time to examine whether your organization needs to take the following steps to prepare for looming deadlines:
- Revise eligibility policies so that no employee has a waiting period for health coverage in excess of 90 calendar days.
- Amend plans to comply with new rules for out-of-pocket maximum limits and to completely eliminate any remaining lifetime and annual dollar limits on essential health benefits.
- Eliminate stand-alone Health Reimbursement Arrangements (HRAs).
- Revamp wellness program requirements to comply with new regulatory requirements.
The IRS has created a helpful website that defines terms and explains tax provisions of the Affordable Care Act at http://www.irs.gov/aca. The Department of Labor website also contains helpful information for employers at http://www.dol.gov/ebsa/healthreform/.
Understanding the many new rules and terminology of the Affordable Care Act can prove to be daunting, requiring expert knowledge and guidance. Friedman LLP will offer some answers to your questions at our next Affordable Care Act Seminar, on October 10. This complimentary breakfast program, entitled Healthcare Reform: Where Do You Stand On Compliance?, will cover such issues as the "play or pay" mandate, employer incentives and penalties and IRS reporting requirements.