BHCG Monitor: Focus on Health Care Benefits

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BHCG Monitor: Health Care Reform


Top of mind ACA provisions for employers

It’s difficult, at best, for employers to keep up with all the new guidelines, requirements and regulations of the Affordable Care Act (ACA). In the last quarter of 2013 most employers are focusing on a few ACA components that have recently been implemented or will come into play over the next 12 months.

Most notably, employers are: finalizing strategies to deal with the employer mandate which will become effective January 1, 2015 (delayed from January 1, 2014), making sure they are in compliance with ACA-required fees and taxes and wellness program regulations, as well as continuing employee communication strategies regarding the insurance marketplace (exchanges).

Employer mandate

Beginning January 1, 2015, employers with 50 or more full-time equivalent employees must offer essential coverage that is affordable and provides minimum value to full-time employees working an average of 30 or more hours a week and their dependents, or be subject to a penalty. In addition, employers must count all employees, including part-time and, in most instances, seasonal employees, to determine if they have 50 or more full-time equivalent employees.

Despite the employer mandate delay, the IRS has plans to fully enforce the rules against large employers beginning in 2015. Says labor and employment attorney, Cynthia Marcotte Stamer, “Employers wishing to use this reprieve to their best advantage should start by ensuring that they clean up and tighten their worker classification and time tracking practices.”

ACA-required fees and taxes

Employers with self-insured plans must pay the Patient-Centered Outcomes Research Institute (PCORI) fee (which increases from $1 to $2 per covered life per year in 2014) and transitional reinsurance fee ($63 per covered life per year beginning in 2014). Although insurance carriers pay these fees for insured plans, most experts believe fully insured employers will probably see these fees reflected in the cost of coverage. In addition to these fees, beginning on January 1, 2013, employers should also have been withholding an additional .9 percent Medicare tax on employees to whom they pay wages in excess of $200,000.

Wellness program compliance

Group health plan wellness programs must meet the nondiscrimination requirements set forth in recent regulations by January 1, 2014. These include limiting the size of wellness rewards to 30 percent (or 50 percent for smoking cessation) of the cost of single coverage under the plan and making rewards available to all employees who are “similarly situated.” Employers must also offer a reasonable alternative for obtaining a reward to employees who cannot meet a health standard.

Employee communications

Beyond the mandated notice to employees regarding the health insurance marketplace which was required by October 1, 2013, many employers are discovering the need for a communications strategy to educate employees about the marketplace and health care reform in general. With the widely publicized troubles of the federal exchange site launch which yielded minimal enrollment far below what was anticipated, health care reform is once again front and center in the news.

Employees are seeing lots of media coverage about the exchange launch, as well as ads, and as a result, many have questions. Policy experts point out that many of the marketplace ads don’t link the exchange with the ACA or mention the individual mandate to have medical insurance. What’s more, recent polls have revealed that almost half of Americans believe the health care reform law was repealed or struck down by the Supreme Court, adding to the confusion. Says Al Karr of the Federal Times, “Employers should be taking action now to devise a communications strategy aimed at their employees that is relevant to their workforces and fits appropriately within their company culture.” (Bruce, 2013)

Works Cited

Bruce, C. (2013, November 8). Employee Benefit Views. Retrieved November 17, 2013, from Employee Benefit News:

Grape, J. A. (2013, September 20). Retrieved November 17, 2013, from Leonard Street and Deinard:

Kennedy, K. (2013, November 13). Almost 27,000 selected insurance via USA Today.

Stamer, C. M. (2013). HR & Benefits Update. Solutions Law Press.


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BHCG Monitor: Focus on Health Care Benefits - April 2012