Obamacare and ACA: What Should Be On Every Employer's To-Do List?
Many employers have held off on making modifications to their group health plans and related documentation because they were waiting to see how the Supreme Court of the United States would rule on the Affordable Care Act. The Court has spoken, the Act has been upheld, and it’s time for employers to start preparing. Here’s what should be on every employer’s "To-Do" list.
The first item on the "To-Do" list is getting a handle on the requirements governing the Summary of Benefits and Coverage. Beginning with the next open enrollment period, employers are required to distribute a Summary of Benefits and Coverage that satisfies some very stringent requirements. Not only must it be "linguistically and culturally appropriate", it must contain the following 12 items:
- Uniform standard definitions of standard medical and health care coverage terms;
- Description of the coverage, including the cost sharing requirements such as deductibles, coinsurance or co-payments;
- Cost-sharing provisions of the coverage, including deductible, coinsurance and copayment obligations;
- Information regarding any exceptions, reductions or limitations under the coverage;
- Renewability and continuation of coverage provisions;
- Coverage Facts Label that includes examples to illustrate common benefits scenarios (including pregnancy and serious or chronic medical conditions) and related cost sharing based on recognized clinical practice guidelines;
- Statement regarding whether the plan provides minimum essential coverage as defined under Code Sec. 5000A(f), and whether the plan’s or coverage’s share of the total allowed costs and benefits provided under the plan or coverage meets applicable requirements;
- Statement indicating that the Summary of Benefits and Coverage is only a summary and that the plan document, policy, or certificate of insurance should be consulted to determine the governing contractual provisions of the coverage;
- Contact number to call with questions and an internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be viewed and obtained;
- For plans and issuers that maintain one or more networks of providers, an internet address (or similar contact information) for obtaining a list of the network providers;
- For plans and issuers that maintain a prescription drug formulary, an internet address (or similar contact information) where an individual can find information about the prescription drug coverage under the plan;
- Information for obtaining copies of the uniform glossary, which includes an internet address where an individual may review the uniform glossary, a contact phone number to obtain a paper copy of the uniform glossary, and a disclosure that paper copies of the uniform glossary are available.
Not only are there specific requirements for what the Summary of Benefits and Coverage must include, there are also requirements regarding the appearance of the SBC: it must be presented in a uniform format, cannot exceed four double-sided pages in length, and cannot include print smaller than 12-point font.
The second item on the "To-Do" list is to figure out how you’re going to report the value of health benefits on employees’ W-2 Wage and Tax Statements. Beginning with the 2012 W-2s that will be distributed in 2013, employers are now required to report the value of health benefits. It seems pretty straightforward, but getting this done is going to take some planning. Coordination between payroll, benefits and human resources (and maybe even your IT department!) is required, and it will be necessary to share information amongst these three groups. Employers should start thinking about what pieces of information will be required, and how that information will be gathered. Start planning now to update your payroll systems so that you can get your 2012 W-2s out to your employees on time.
There are three other aspects of the Affordable Care Act that employers should be thinking about, like the anti-discrimination provisions, the employer "Play or Pay" mandate, and the automatic enrollment requirements. These issues can comfortably take a lower ranking on your "To-Do" list, since they won’t be implemented until 2014. Regulatory agencies need some time to develop and issue guidance on these three aspects. While employers should be aware of these pending changes, the specific guidance issued is expected to have an impact on the policies and procedures employers will put into place.
Employers need to keep in mind that the Summary of Benefits and Coverage requirements and the reporting of the value of health care benefits are essentially in effect as of the next open enrollment period and/or the end of this calendar year. While it may seem like there’s a lot of time left, those deadlines will be here before you know it – start preparing now, and get them checked off your "To-Do" list as soon as you can.