This is the first in a series of five articles on employee benefits planning. We look at the impact of new legislation and the consideration factors for plan administrators.
2015 will require a continual monitoring of the changes to the Patient Protections and Affordable Care Act (PPACA). The projected changes include employer mandates for offering employee health care options, which go into full effect for companies with 100 or more employees. The program’s future is clouded with a significant amount of uncertainty. Companies are moving ahead with compliance, but still struggling with the law’s changing deadlines and vague regulations.
Major Changes for ACA in 2015
The deadline for employers to offer workers health plan options according to the federal standards was moved to 2015 for businesses with more than 100 employees and until 2016 for businesses with 50 to 99 employees. Smaller businesses are exempt from this law which fines larger businesses $2000 per worker for non-compliant health coverage.
Compliance with the ACA
According to the SMB Job Generation Outlook, less than half of the respondents said they were sure they would be able to comply with the new legislation. 45% of the respondents said they were actually ready, which was an increase from the 39% in the previous year. An additional 38% stated they were getting ready for the PPACA. However, 10% of the Outlook’s respondents said they wouldn’t do anything to get ready for the mandate.
According to the survey:
- 29% may either change their health care provider or plan and periodically review their plan
- 25% plan on increasing the amount of their employees’ contributions
- 10% are planning on enacting higher copays and higher deductibles
- 10% are planning on engaging employee wellness programs and health education
- 9% are planning on cutting back on the number of full-time employees or cutting their hours to part-time
- 6% are planning on cutting their employee’s benefits
In addition, 14% suggest they “will do nothing to absorb the costs” but 22% intend to use other strategies, such as:
- Expect congressional exemptions from PPACA
- Pass the cost onto their customers by charging more
- Cease to hire smokers
It’s important for businesses to work with insurance carriers to effectively meet the requirements of the PPACA over the next few years. Regardless of how confusing the new PPACA requirements may be, it’s important to make good-faith efforts to be in compliance with this letter of the law.
Peter Marathas is a partner in the Employee Benefits, Executive Compensation & ERISA Litigation Practice Center and heads both the Employee Benefits Practice in the Boston office and Marathas, Barrow and Weatherhead LLP's Health Care Reform Task Force. Peter is also a die-hard Red Sox fan from Boston.