With the Affordable Care Act “pay or play” provision delayed, I don’t have to do anything before 2015, right? Wrong!

Joe Popp | July 3rd, 2013

If you had more time to prepare for something that could have a huge impact on your business, would you take advantage of that extra time? If you answered no, then you might want to think again. 

It was recently announced that the Obama administration delayed certain provisions of the Affordable Care Act (ACA) until 2015. These delays include the business “pay or play” or employer mandate to provide insurance, as well as the informational reporting to the IRS and employees if you are a large employer.

This delay is good news for businesses that would see straight cost increases (either from penalties or increased employer share insurance costs) and businesses that were in compliance and would have to deal with new administrative requirements. But there are still things companies need to do this year to become compliant  with other provisions of the ACA that have not been delayed. Here are some things that are still in place (at least for now!):

  1. The individual insurance mandate. It appears that next year individuals will still need to comply with the individual mandate to have health care coverage. It is unknown yet if a new reporting from employers will be used in this area for the 2014 tax year.
  2. The individual insurance marketplaces/exchanges. This exchange is still being targeting for a fourth quarter 2013 launch.  As I detailed in another blog post today, the exchange is an opportunity for significant savings for some employers.
  3. The October 1 communication on exchanges from the Department of Health and Human Services. Companies large and small still need to provide their employees with a notification about the availability of the exchange and some details about the business and their insurance offerings. This is due by October 1, and then will be part of new hire documents thereafter.
  4. New fees on providers of insurance. The first round of new fees that insurance providers owe is due at the end of July (for self-insured plans). This is an excise tax that ultimately will be paid by businesses. If a business is self-insured, they will need to pay the feds directly and complete a filing. The first fee can be due at the end of this month, so be prepared!  There are new per life fees of around $65 (so a family of 4 you insure will cost you nearly $260 more annually). This straight cost increase is not impacted by the delay.
  5. The new reinsurance cost that is approximately 2 percent of your total premium. This straight cost increase is not impacted by the delay.
  6. The rate swing between best and worst insured groups is shrinking. This is the range that an insurance company may charge from their best group to their worst group of insured. Because the range is shrinking, and there is price point pressure to meet in the middle, some groups will see rates go up and some will see rates stay the same or drop a little.
  7. No preexisting conditions and other technical changes. A host of technical changes to health insurance in general will go into effect in January 2014 as planned.

Health Care Reform Help

Just because there is a delay in some key provisions within the ACA doesn’t mean you still shouldn’t prepare for how it will affect you. Time is of the essence—so make the most of it. If you need help determining what your business needs to do to be compliant with other ACA provisions, contact Rea & Associates. Our Ohio tax professionals will help get on the right path toward compliance.

 

Related Articles

Why Might the Delay in the Affordable Care Act Be Better News Than You Think?

How Much Will Health Care Reform Cost Your Business?

How Will Health Care Reform Impact Small Employers & the Labor Market?

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