Pub. 1 Issue 2

14 www.glancda.org  Healthcare Reform — continued from page 13 Delays, problems, and missteps, like the deadline change before employers have to provide employ- ees with insurance, are sure to surface. Fortunately, the implementation is and will continue to be incremental. Business owners need to comply with the requirements for 2013, but they have a little time to decide how they will apply the requirements that go into effect later. In addition, the ripple effect from Obama’s deadline change will affect the following requirements: Assessment is the first step. Consider first the steps that have already been implemented, each of which now represents an annual requirement: • ERISA plan documents are required. Each company needs to make sure the necessary paperwork is in order. • September 2012 was the first time companies were required to have summaries of benefits and coverages (SBCs) that would start the first day of coverage for a new year of health-care coverage. • For companies that send out 250 or more W-2s, there was a requirement to gather new information. Companies with less than 250 employees can choose not to comply. • For companies that get a Medical Loss Ratio (MLR) rebate check from insurance carriers each August for fully insured health plans, speed suddenly matters: the clock starts on rebates after they arrive, and 90 days later, companies need to have decided what to do with those rebates. • Grandfather status is something that has to be evaluated on every year as companies make changes to their plans. If a plan was grandfathered in 2010 but is changing in 2012, then it has probably lost that grandfather status. Now is the time to determine what the financial impact will be on a company if it does not comply with a requirement. Is it cheaper to comply? Now is also the time to look at anything that might lose its grandfathered status in an existing plan, then figure out how to make any necessary changes. The new requirements for 2013 and beyond involve the following: • Companies are now required to define what constitutes being a full-time employee, and to categorize their employees accordingly. • People with heavy medical expenses are being reined in on FSAs. An employee cannot contribute more than $2,500 per year to an FSA. • There’s a new fee to be set aside, due July 31st: the Patient Centered Outcomes Research (PCOR) fee. This applies in cases where employers offer fully insured or self-insured plans. Over a seven year period, this fee will start at one dollar per covered employee and increase one dollar at a time every year after that. For example, the fee will be $2 per covered employee the second year, $3 per covered employee the third year, and so on. • At some point, probably in 2014, companies are going to have to tell their employees about the insurance exchanges that are being formed on a state and federal level. This is something that has been postponed from March 1st because you can’t tell people about something that hasn’t been organized yet. If you’ve been following this one in media coverage, then you know that Utah, in particular, is scrambling and has not yet settled on anything final. • A little later, companies will be required to declare whether they will offer insurance coverage or pay the excise tax penalt y. Specifically, companies will have to either offer coverage to all of their full-time employees who are working 30 hours or more per week, on average, or they will have to pay the excise tax penalty mentioned previously. The government sets the minimum standards for the insurance. Companies that don’t meet the standards have AS HEALTHCARE REFORM CONTINUES TO UNFOLD, IT IS GOING TO BE INCREASINGLY IMPORTANT TO CONSULT WITH EXPERTS SO THAT BUSINESSES CAN AVOID PENALTIES AND LEGAL PROBLEMS.