Ask Tim - Got an insurance technical question on your mind? , Insurance Claims Adjuster, Member Blogs, Claims-Portal.com

Become a member and contribute content to Claims-Portal.com Add your company to the Claims-Portal.com Vendor Directory Add job openings to the Claims-Portal.com Career Center
Claims-Portal.comMember Blogs
My Claims-Portal
Sep 16, 2019    
 - Member Benefits
 - Become a Member
 - About Us
 - Advertising

this page!
Independent Adjusters
Employers/Recruiters
Claims Software

Ask Tim - Got an insurance technical question on your mind?

Blogs Home >> Ask Tim - Got an insurance technical question on your mind? >> 'Health Care Reform Primer: Employer Mandates'
Health Care Reform Primer: Employer Mandates

In addition to the requirement that individuals carry health insurance coverage, the federal Patient Protection and Affordable Care Act imposes on some employers obligations to offer coverage. The "employer mandate" is the subject of today's post. Essentially, it says to certain businesses that, if the government has to help their employees pay for health coverage, the businesses have to help the government offset the cost.

This part begins by adding two new sections to the federal Fair Labor Standards Act. An employer subject to the FLSA that has more than 200 full-time employees and that offers employees enrollment in one or more health plans must automatically enroll new full-time employees in one of the offered plans (subject to any legally-permitted waiting period) and continue enrollment of current employees in an offered plan. The employer must provide adequate notice to the employee and give him the opportunity to opt out of coverage. State requirements regarding payroll still apply, except that they cannot prohibit automatic enrollment.

Employers must also provide new hires (and, by March 1, 2013, current employees) written notice:

•Of the existence of an exchange, a description of the exchange's services, and how employees can contact the exchange for help

•When the employer plan's share of the total allowed costs of benefits is less than 60 percent, the notice must inform employees that they may qualify for premium tax credits and cost-sharing reductions if they purchase coverage through the exchange

•That if the employee buys a plan through the exchange, he will lose the employer contribution to any plan offered by the employer and that all or part of the contribution may be excludable from his taxable income.

The rest of this part changes the tax law. It applies to employers who employed an average of 50 or more full-time employees during the preceding calendar year, other than those who exceeded 50 employees because they hired seasonal workers for 120 days or less during the year. If a business is new, the criteria is the average number of employees it is reasonably expected to employ in the current year. If an employer buys another employer, the law applies to it if it would have applied to the purchased employer.

The law states that if:

•A covered employer, during any month, fails to offer full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an employer-sponsored plan, and

•At least one full-time employee has been certified as hanving enrolled for that month in a plan for which he can receive premium tax credits and/or cost-sharing reductions

Then the employer is assessed a tax penalty equal to the number of full-time employees for that month multiplied by $750 divided by 12 ($62.50.) Therefore, a business with 100 full-time employees who does not offer coverage for one month will pay a penalty of $6,250. Starting in 2015, the $750 will be indexed to inflation. Also, employers that require a waiting period of more than 60 days before employees are eligible for coverage are assessed penalties equal to $600 per affected full-time employee.

If:

•An employer offers full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an employer-sponsored plan, and

•One or more full-time employees is certified as having enrolled for that month in a plan for which he can receive premium tax credits and/or cost-sharing reductions

Then the employer is assessed a penalty equal to the number of full-time employees for the month multiplied by $3,000 divided by 12 ($250), subject to a maximum of the number of full-time employees multiplied by $62.50. Again, this amount will be indexed for inflation starting in 2015.

The Treasury Department may provide for payment of the assessments on annual, monthly, or other periodic bases. The department will issue regulations providing for reimbursement to the employer of assessments that were incorrectly made because an employee was incorrectly determined to be eligible for tax credits or reduced cost-sharing. The Labor Department is required to study and report on whether these changes have resulted in reduced wages for workers.

Employers will have to annually report to the IRS:

•A certification as to whether they offered full-time employees the opportunity to enroll in minimum essential coverage under an employer-sponsored plan

•The length of any waiting period to which employees were subject

•The months during which coverage was available

•The monthly premium for the lowest-cost option

•The employer's share of the total allowed costs of benefits provided under the plan

•The number of full-time employees for each month during the year

•Employee identification information and the months each employee and his dependents were covered.

Employers must by January 31 each year give each reported employee a written statement showing the information they reported to the IRS.

To the extent feasible, the Treasury Department must try to combine this report with the employer's other applicable tax returns. Employers who buy coverage from a health insurance carrier may arrange to have the carrier make the report for them.

Lastly, employees cannot pay for exchange-provided health plans with pre-tax dollars unless they work for an employer qualified to offer a group plan through the exchange.

That's a wrap on the mandates. The next post will start on some miscellaneous provisions; I hope to cover them all in one post, but I'll break into multiple posts if it gets too long. The good news is that these provisions are the last part of Title I, Quality, Affordable Health Care For All Americans. After scrolling through the law's table of contents, I can see some future sections that I will touch on only briefly and others that I'll discuss in detail. My hope is to have this primer complete by the end of this year. Stay tuned to see if I hit that goal.

Posted on Thursday, Nov 17, 2011 13:06:03 CST by tdodge

Start a Blog   |   Member Blogs Home  |   Subscribe To Blog
    <<     September  2019     
S M Tu W Th F S
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30          
Jump to:
 
Article Categories
Insurance
Technology
Health Care
 
  •  Announcements
  •  Claims Events
  •  Insurance News
  •  Special Offers
  •  Newsletters
  •  Blogs
  •  RSS Feeds
  •  Directory
  •  insURLinks
  •  Classifieds
  •  About Us
  •  Contact Us
  •  Advertising
  •  Member Search

  •  Registration
  •  Login
  •  E-Mail Lists
  • Home  |   Privacy Policy  |   Terms of Service  |   Site Map
    © 1998-2019 E-Claim.com, LLC