Uncertainty of PPACA – Employers Must Be Nimble

Employers need to be prepared to act quickly when regulatory guidance is  issued on new health care rules that go into effect in 2014 under the Obama  administration’s health care overhaul, as there are a number of uncertainties  that the federal government must still clear up by then, a health care analyst  said July 12 in a Mercer webcast.

“We don’t have any proposed or final regulatory guidance on [certain plan  requirements] … We have some ideas, some frequently asked questions that  regulators have floated out there,” said Amy Bergner, a partner in the  Washington office of Mercer.

For example, she said, government guidance on the definition of a “full-time” employee has yet to be released, and it is possible that the term could be  defined to include employees who work as few as 30 hours a week. As a result,  employers with a large population of hourly, part-time, or seasonal employees  may suddenly find that these workers are now considered full time and face new  eligibility and penalty issues.

Under the Patient Protection and Affordable Care Act, employers with 50 or  more full-time employees that do not offer coverage that meets affordability and  value requirements could be subject to a penalty of up to $2,000 for each  full-time employee (minus 30 employees) if even one full-time employee received  income-based assistance to buy coverage on an insurance exchange.

Another area of uncertainty, Bergner said, involves PPACA imperatives that  employers meet health plan affordability requirements based on employee  household income.

“Obviously, employers don’t have access to an employee’s household income,  and the test here is that the employer coverage cannot exceed 9.5 percent of the  employee’s household income for single coverage,” Bergner said. “Regulators have  said they intend to allow employers to use a worker’s [Form] W-2 wages as the  basis for determining that affordability, but again, we need some more  definitive guidance from the regulators about that before we can really come to  a comfortable landing spot in terms of how an employer can definitively assess  its exposure here,” she said.

Other examples of areas in which there is uncertainty, Bergner said, include  the 90-day limit on waiting periods for new full-time employees to be deemed  eligible for health care coverage and the automatic enrollment mandate, which is  slated to begin sometime after 2014 because regulators have said they won’t be  ready with guidance until then. Under the auto-enrollment mandate, employers  with more than 200 employees that offer one or more health plans must  automatically enroll new full-time employees in one of the plans.

By Nancy Bonanno