I’ve spent two years sifting through health reform legislation and trying to interpret it for employee benefits professionals.
I can’t complain — it’s kept me employed.
And when the Supreme Court unveils its decision this month, much like benefits managers, I’m likely to spend years trying to understand what will either be a complete rebuild of the health care system or a frantic scramble to piece together the mandates left behind.
But I’ll be lucky. I’m not actually on the hook for executing these requirements, should they survive the decision...that’s left up to the benefits pros.
Unfortunately, according to a new ADP survey, their accuracy may be off. Two years out, benefits managers are still having a hard time understanding health reform requirements. The survey polled more than 800 HR and benefits decision makers last month and found “fewer than half of HR/benefits decision makers across all sized companies are highly confident that they understand employer responsibilities under ACA.”
Benefits managers are having a rough time even with the SBC requirement that's supposed to be ready for fall open enrollment this year.
True, the feds haven't exactly been consistent with their enforcement. HHS has flip-flopped on things such as the medical loss ratio waivers, and they completely undershot an early-retiree benefits program. Recently, the department also admitted it fouled up its own example SBC. If they can't seem to get it right, how do they expect everyone else to comply?
Health reform is a mess. So clearly, benefits managers are in wait-and-see mode. But with penalties on the line right now, why aren't benefits managers better prepared? Is it procrastination or lack of education that’s making these would-be health reform experts from getting a handle on the law?
Maybe a complete overturn could be the biggest “whew” moment for HR – not only because the costliest requirements may be abolished, but because they won’t need to catch up on their health reform reading. According to ADP, here are three big PPACA regulations that HR managers still grapple with:
Notify employees about public exchanges –
What the law says: Effective March 1, 2013, all employers will be required to notify all employees and new hires about the establishment of the public exchanges and that they may be able to shop for coverage on the exchanges (for coverage that becomes effective in 2014). Employers will also have to notify employees about the eligibility rules for premium assistance and explain that, if the employee chooses coverage through the exchange, the employee will lose the employer’s pre-tax contribution towards coverage.
What the survey found: Most HR/benefits decision makers in small and midsized companies are unaware of the upcoming employee notification requirement, and even a third of those in large companies are not aware.
Provide Summary of Benefits and Coverage (Fall 2012 open enrollment) -
What the law says: ACA requires health plans and health insurance issuers to provide participants with a summary of benefits and coverage (SBC) by the first day of the first open enrollment period beginning on or after Sept. 23, 2012 (The effective date of this requirement was originally on or after March 23, 2012 – postponed to Sept. 23, 2012).
The SBC rule applies to both fully insured and self-insured plans (whether or not grandfathered), as well as to health insurance issuers that offer group or individual health insurance coverage. Retiree-only and HIPAA-excepted benefits plans (e.g., stand-alone dental and vision plans) are not subject to the SBC requirements.
What the survey found: Half or more of small and midsized companies are not prepared to provide the SBC, and a third of large companies are also not prepared for this requirement.
Shared responsibility provisions (2014) -
What the law says: Employers with 50 or more FTEs will be subject to ACA’s Shared Responsibility provisions, which require that such employers have to either provide health care benefits to employees working at least 30 hours per week (at least 130 hours per month) or face potential penalties.
In addition, employers who offer health insurance coverage will have to meet two additional requirements in order to avoid potential penalties: the coverage must have at least a 60 percent “actuarial value,” and the coverage must be “affordable,” meaning that the employee contributions for single coverage cannot exceed 9.5 percent of an employee’s Form W-2 earnings. “Actuarial value” consolidates a plan’s various cost-sharing mechanisms into a single measure that allows consumers to evaluate the plan’s overall financial protection
What the survey found: While most HR/benefits decision makers in companies with 50 or more FTEs do think their companies will be impacted by the Shared Responsibility provisions of the ACA, a fifth to a third do not or are not sure. (Midsized = 71 percent think company will be impacted, Large = 80 percent)
Midsized companies are much less likely than large companies to have done the necessary analysis to understand their company’s potential exposure to penalties from violations of the Shared Responsibility provisions. But even among large companies, more than 50 percent have not taken action to quantify their potential liabilities under these requirements.