We are in the home stretch of implementation of most of the Affordable Care Act (ACA) provisions. Although ACA implementation will have a significant impact across America, many would agree that employer groups currently feel the most anxious about the looming implementation.
Employers face weighty decisions in 2013 regarding their role in offering health coverage to their employees. Daily accounts of soaring health insurance costs, confusing or delayed guidance on ACA provisions, onerous calculations regarding potential penalties relating to health coverage offerings and unreasonable expectations to predict employee behavior are bombarding and overwhelming employer groups. This article aims to help employers sift through the noise and provide some useful ACA compliance guidance to get through the remainder of 2013.
Here are five action items employer groups can do to feel more in control and reduce the stress of ACA compliance:
- Inform your employees of the impending changes. Regardless of the size of your labor force or whether you currently offer employee health coverage, the ACA requires most employers to notify all employees (full-time and part-time) of coverage options by Oct. 1, 2013. The U.S. Department of Labor has issued two Model Notices that employers can use: one for employers that do offer employee health coverage and one for employers that do not offer employee health coverage. The Model Notices are available at www.dol.gov/ebsa/healthreform/index.html.
You may want to use issuance of the Model Notices as an opportunity to have a frank discussion with employees about how the ACA provisions may impact your business. According to a recent article in The Wall Street Journal, “Bringing Workers Into the Loop Early” (May 30, 2013), informational meetings with employees can quell rumors and enhance employee understanding of the issues the business faces. That understanding may be crucial to preventing possible legal claims brought by employees who may feel wronged by employer decisions related to ACA implementation. The ACA created new rules that protect employees from retaliation by their employer under the Fair Labor Standards Act for providing information relating to any violation of, or any act or omission the employee reasonably believes to be a violation of any provision made by Title I of the ACA.
In addition, these employee informational sessions can arm employers with insight into how many employees might elect coverage that the employer offers. That information is vital to an employer’s ability to examine options and estimate costs.
- Mind the new 60-day Material Modification Notice Requirement. As of Sept. 23, 2012, the ACA requires employers that make “material modifications” to their health plan to notify employees at least 60 days in advance of the change taking effect. “Material modifications” are essentially those modifications that an average plan participant would consider an important change in covered benefits or other change in terms of coverage under the plan or policy. See 77 Fed. Reg. 8668, 8677 (Feb. 14, 2012). Material modifications would include decisions to significantly reduce or eliminate coverage or to increase employee cost-sharing. As employers make decisions about health coverage in the next year, they should be careful not to miss this 60-day notice requirement.
- Pay the Patient-Centered Outcomes Research Institute fee. The ACA created the Patient-Centered Outcomes Research Institute to conduct comparative effectiveness research to help patients, policymakers, businesses and clinicians make better health care decisions. The ACA is not only about expanding insurance coverage, but many provisions also try to address increasing the value of health care by reducing costs and improving quality.
To fund this effort, self-funded plans and health insurance companies must pay $1 per covered life by July 31, 2013 on IRS Form 720. The fee increases to $2 per covered life next year. The program ends in 2019.
- Meet with a trusted adviser. There are many knowledgeable people getting ramped up to answer your questions and guide you through this next year. Lawyers, brokers, agents, and accountants each bring their unique area of expertise to help your business adapt to the new health coverage landscape. You should be meeting with these advisers and exploring options. These meetings will be much more useful if you conduct the employee informational sessions discussed in No. 1 above. Some options that may be available to your company, depending upon its unique circumstances, include maintaining the status-quo, renewing your insurance policy early, becoming self-insured, offering bare bones coverage, requiring workers to enter the exchange (or individual market outside the exchange), offering wellness plans or in-house medical services, or paying the penalty (if it applies to your organization). The Office of Commissioner of Insurance has also posted useful guidance for Wisconsin employers, available at www.oci.wi.gov/healthcare_reform.htm.
- Demand accountability. As primary purchasers of health care in the United States, employers are well-positioned to demand value in health care. Wisconsin organizations such as the Wisconsin Health Information Organization (WHIO) aim to disseminate information to the public about who delivers quality health care and thus help employers and consumers make smarter health care purchases. The ACA has also created initiatives that incentivize providers to deliver higher quality, more cost effective care, such as the Patient-Centered Outcomes Research Institute (discussed in No. 3 above), as well as Accountable Care Organizations and financial penalties for hospital readmissions. Employer groups can make a difference in improving our health system by asking your claims administrator to contribute data to WHIO so that Wisconsin health care purchasers can make more enlightened health care decisions.
Barbara Zabawa, JD, MPH is Health Care Law Team leader for Whyte Hirschboeck Dudek S.C. in Milwaukee. She can be reached at (608) 234-6075 or bzabawa@whdlaw.com.
