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Mandate Delay Leaves ‘More Questions Unanswered Than Answered’

Article originally published by David Albertson on http://eba.benefitnews.

On Tuesday evening July 2 The White House, in a blog posting from Valerie Jarrett, senior advisor to the President, announced it will suspend for one year reporting requirements in 2014 for larger employers (more than 50 FTEs) to demonstrate compliance with a mandate to offer employees health insurance coverage, and not enforce financial penalties for larger employers that fail to comply until 2015, one year later than authorized in the Affordable Care Act.

United Benefit Advisors CEO and HIX blogger Thomas Mangan notes that the delay of the pay-or-play requirement  does not affect the insurance market reforms scheduled to take effect at the start of the 2014 plan year. Among them:

  • Waiting periods cannot be more than 90 days from the date the employee becomes eligible.
  • All pre-existing condition limitations must be removed.
  • The out-of-pocket maximum cannot exceed $6,350 for individual and $12,700 for family coverage.
  • Essential health benefits may not have annual dollar limits.

Moreover, Mangan observes that employers still must also meet other PPACA requirements. For example:

  • Reporting and payment of the PCORI fee by July 31, 2013 for plans that ended Oct. 1, 2012 through Dec. 31, 2012.
  • Timely distribution of any MLR rebates the plan may receive.
  • Providing a Summary of Benefits and Coverage (SBC) as part of open enrollment.

In sum, the White House decision leaves “more questions unanswered than answered,” Mangan says. “For instance, if an employer is not required to report eligibility, how will it affect determination of employee eligibility for subsidies?”

“There are 6 million employers in the United States of which 4.7 million have fewer than 50 employees. While this is a big deal for employers with a high number of part time and hourly workers in retail, hospitality, etc… the major components of the law are still going to impact 80% of employer groups in our nation.

“The hospitality, retail and service industry, which have so many hourly and part time workers, were just handed a huge gift with this 12-month reprieve.  In order to continue to hold the cost down of their products, they will put off even offering the ‘bronze’ level of benefits until 1/1/2015,” according to Mangan.

The Treasury Department is expected to offer further guidance next week on the implications for HIX, which at this writing were still expected to become operational Oct. 1.

For Thomas Mangan’s complete analysis of issues affected or not affected by the mandate delay, click here.