CLASSIFICATION OF EMPLOYEES / EMPLOYER SIZE
Full Time: Work 30 or more hours per week
Part Time: Work fewer than 30 hours per week
Full Time Equivalent of Part Time Workers (FTEPT): Total hours of all part-time employees for a month divided by 120 monthly hours (the 120 comes from 30 FT employees multiplied by 4 weeks in a month)
                -40 part-time workers average 21 hours/week
                -(40 x 21 x 4 wks)/120
                -# of FTEPT = 28
Seasonal: Work fewer than 120 days per calendar year

Large employer: 50 or more FT & FTEPT employees
Small employer: Fewer than 50 FT & FTEPT employees


EMPLOYEE NOTICE OF EXCHANGE

□    Effective March 1, 2013, employers must provide all new hires and current employees with a written notice about ACA’s health insurance exchanges (Exchanges). The notice must:

• Inform employees about the existence of the Exchange and provide a description of the services provided by the Exchange;
• Explain how employees may be eligible for a premium tax credit or a cost-sharing reduction if the employer's plan does not meet certain requirements;
• Inform employees that if they purchase coverage through the Exchange, they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of the employer contribution to employer-provided coverage may be excludable for federal income tax purposes; and
• Include contact information for the Exchange and an explanation of appeal rights.

Federal agencies are expected to issue more specific guidance on this notice requirement and provide a model notice for employers to use.

EXCHANGE PENALTIES

Beginning in 2014, large employers (companies with 50 or more FTEE) will be subject to a penalty if they do not offer their employees health care coverage. There are two types of penalties:

Type A – Health care is not offered AND employee goes to Exchange to purchase coverage
                -Penalty = $2,000 per FT after you reach 30 FT employees

Type B – Health care is offered AND employee goes to exchange to purchase coverage
                -Penalty = the lesser of the two:
                                A) $2,000 per FT after you reach 30 FT employees

                                B) $3,000 per FT employee that receives a credit for going to an exchange

GRANDFATHERED PLAN STATUS

A grandfathered plan is one that was already in effect on March 23, 2010 when healthcare reform was enacted. If you make certain changes to your plan that go beyond permitted guidelines, your plan is no longer grandfathered.

□    If you have a grandfathered plan, determine whether it will maintain its grandfathered status for the 2013 plan year. Grandfathered plans are exempt from some of the healthcare reform requirements. A grandfathered plan’s status will affect its compliance obligations from year-to-year. 

□    If you change to a non-grandfathered plan, confirm that the plan has all of the additional patient rights and benefits required by ACA. For example, this includes coverage of preventive care without cost-sharing requirements.

W-2 REPORTING

□    Beginning with the 2012 tax year, employers that are required to issue 250 or more W-2 Forms must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 Forms. The cost must be reported beginning with the 2012 W-2 Forms, which are issued in January 2013.

ANNUAL LIMITS

Effective for plan years beginning on or after January 1, 2014, health plans will be prohibited from placing annual limits on essential health benefits.

□    For the 2013 plan year, the annual limit of a health plan on essential health benefits cannot be less than $2 million. (This limit applies to plan years beginning between September 23, 2012 and January 1, 2014.)

SUMMARY OF BENEFITS AND COVERAGE

Health plans and health insurance issuers must provide a Summary of Benefits and Coverage (SBC) to participants and beneficiaries. The SBC is a document that provides basic information about health plan benefits and coverage in plain language.

Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period beginning with the first open enrollment period that begins on or after September 23, 2012. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) effective for plan years beginning on or after September 23, 2012.

□    If your plan has an open enrollment period beginning on or after September 23, 2012, confirm that the SBC is included with the open enrollment package. For participants and beneficiaries who enroll outside of the open enrollment period, confirm that the SBC will be provided to these individuals beginning with the plan year starting on or after September 23, 2012.

• If you have a self-funded plan, the plan administrator is responsible for providing the SBC.
• If you have an insured plan, both the plan and the issuer are obligated to provide the SBC, although this obligation is satisfied for both parties if either one provides the SBC. Thus, if you have an insured plan, you should work with your health insurance issuer to determine which entity will assume responsibility for providing the SBC.

60-DAY NOTICE OF PLAN CHANGES

□    A health plan or issuer is required to provide 60-day advance notice of any material modifications to the plan that are not related to renewals of coverage. This 60-day notice requirement becomes effective when the SBC requirement goes into effect for a health plan. Notice can be provided via an updated SBC or a separate summary of material modifications.

PREVENTIVE CARE SERVICES FOR WOMEN

□    For plan years beginning on or after August 1, 2012, non-grandfathered health plans must cover specific preventive care services for women without cost-sharing requirements.

Womens' preventive care services that are covered include: well-woman visits; gestational diabetes screening; human papillomavirus (HPV) testing; sexually transmitted infection (STI) counseling; human immunodeficiency virus (HIV) screening and counseling; FDA-approved contraception methods and contraceptive counseling; breastfeeding support, supplies and counseling;  and domestic violence screening and counseling. Exceptions to the contraception coverage requirement apply to certain religious employers.

$2,500 CONTRIBUTION LIMIT FOR HEALTH FSAs

□    For plan years beginning on or after January 1, 2013, an employee’s annual pre-tax salary reduction contributions to a health flexible spending account (FSA) must be limited to $2,500. (The $2,500 limit will be indexed for cost-of-living adjustments for 2014 and beyond.)

Health FSA plan sponsors are free to impose an annual limit that is lower than the ACA limit for employees’ health FSA contributions. Also, the $2,500 limit does not apply to employer contributions to the health FSA and it does not impact contributions under other employer-provided coverage.

MEDICARE TAX INCREASES

□    Effective January 1, 2013, the hospital insurance tax rate increased by 0.9 percent (from 1.45 percent to 2.35 percent) on wages over $200,000 for an individual taxpayers and $250,000 for married couples filing jointly. The tax is also expanded to include a 3.8 percent tax on unearned income in the case of individual taxpayers earning over $200,000 and $250,000 for married couples filing jointly.

An employer must withhold the additional Medicare tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year. An employer has this withholding obligation even though an employee may not be liable for the additional Medicare tax. Any withheld additional Medicare tax will be credited against the total tax liability shown on the individual’s income tax return (Form 1040).

CER FEES

ACA created the Patient-Centered Outcomes Research Institute (Institute) to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. The Institute’s research is to be funded, in part, by fees paid by health insurance issuers and sponsors of self-insured health plans. These fees are called comparative effectiveness research fees or CER fees.

□    Self-funded plans and health insurance issuers must pay a $1 per covered life fee for comparative effectiveness research. Fees are effective for plan years ending on or after October 1, 2012. Fees increase to $2 per covered life the next year and will be indexed for inflation after that. Full payment of the research fees will be due by July 31 of each year. It will generally cover plan years that end during the preceding calendar year.

HIPAA CERTIFICATION

□    Health plans must file a statement with the Department of Health and Human Services (HHS), certifying their compliance with HIPAA’s electronic transaction standards and operating rules. Under ACA, the first deadline for certifying compliance with certain HIPAA standards and rules is December 31, 2013.