Affordable Care Act (ACA) Requirements-Few Worth Mentioning

If you are reading this article, please consider yourself ahead of the game. Most American’s, actually about 40%, are not familiar with the Affordable Care Act (ACA) and its new rules and regulations.  This percentage is staggering, yet not surprising, considering its magnitude.

Over the past few months, there are a few items in this act that have been discussed frequently. You could also refer to them as “frequently asked questions”.  They are worth mentioning, to make certain you know these tid bits of information, to help guide you. Please note these are not ALL ACA requirements for businesses, but those most recently frequently questioned.

1. 90 day waiting period Under the proposed regulations, the waiting period may not extend beyond 90 days after an individual has satisfied all other plan eligibility requirements.  All calendar days are counted, including weekends, sick days, and holidays.  If the 91st day is a weekend or holiday, the plan or insurance issuer may choose to permit coverage to be effective earlier than the 91st day for administrative convenience; however, a plan or insurance issuer may not make the effective date of coverage later than the 91st day.  The proposed regulations clarify that it is not permissible under the 90-day rule to delay coverage until the first day of the month following completion of a 90-day waiting period.  Employers that wish to use a first day of the month or first day of the payroll period as their enrollment date would need to apply a shorter waiting period to ensure that coverage would become effective on or before the 91st day.  Plans and insurance issuers may not use “three months” as a substitute for 90 days.  If an individual is already in a waiting period for coverage before the first day of the plan year starting on or after January 1, 2014, the waiting period applicable to the individual as of the 2014 plan year cannot exceed 90 days.  
2. Individual mandate is still in play. The employer mandate has been delayed until 2015, but the individual mandate to purchase healthcare still remains in effect. Failure to secure adequate insurance results in a penalty; it begins at $95 or one percent of income, whichever is greater. The penalty gradually increases until it reaches $695 or 2.5 percent of income, whichever is greater, in 2016.
3. Open enrollment for the exchange begins October 1st, 2013 Yes, it is true, the exchange is scheduled to be open on time starting this October 1st.  The federal government has not fully tested its functioning ability.  Individuals enrolling themselves on the exchange will be cross referenced by the IRS on the validity of the information they supply, especially when applying for subsidies.  There are heavy fines for those caught giving false information in order to achieve a subsidy on the exchange.
4. Model Exchange Notice Due to Employees by October 1st, 2013 Notification of Healthcare Marketplace  The Affordable Care Act requires that every employer must provide all of their part-time and full-time employees with a notice regarding the Health Insurance Marketplace by October 1, 2013. We are encouraging members to do this sooner rather than later. To be compliant with the Department of Labor, one of two notices MUST be sent. One notice is for employers that currently offer health insurance as an employee benefit, and the other notice is for employers that do not offer health insurance as an employee benefit. Going forward, new hires must receive notice with 14 days of the start date of employment. Employer Notification provided to MBPA Members At NO COST!
5. Michigan is currently a Federally Facilitated Exchange (FFE), which means the federal government is running our exchange. There will be other changes coming down the road for Michigan as it adheres to the ACA as a FFE.  Michigan is still able under the ACA to change its status and possibly become a “state-based” exchange, which would allow our state more decision making power. The political likelihood of that change is not on the horizon, but is still an option.

If you come across anything that you require further explanation, please contact our office at: 586-393-8800 or by email at: bbochniak@michbusiness.org.