Health Care Reform Is Here to Stay – Are You Ready?

“For employers and plan sponsors that have been adopting a ‘wait and see’ approach before focusing on compliance with the Patient Protection and Affordable Care Act (PPACA), the time to wait is over. PPACA’s insurance mandates, market reforms, and employer requirements generally will move ahead as scheduled, with most of PPACA becoming fully effective just a short year from now, in 2014.” (Proskauer)

President Obama’s re-election earlier this month virtually guarantees that health care reform is here to stay (even top Republican lawmaker John Boehner agrees).

That doesn’t mean pending (and future) challenges to the law are going away, of course. But employers no longer can afford to put off compliance with the law. What should be on your radar screen right now?

1. SBC disclosure:

“This new disclosure requirement takes effect for open enrollment periods beginning on or after September 23, 2012 (or plan years beginning on or after that date). In a nutshell, insurers must now provide four-page summaries of benefits and coverage (‘SBCs’) to group health plans within 7 days after a plan applies for coverage with the insurer.” (McNees Wallace & Nurick)

2. Medicare tax increase:

“The 2010 Health Care Act increases the employee portion of the HI tax after 2012 by an additional tax of 0.9 percent on wages received in excess of the applicable “threshold amount” to 3.8 percent. This added HI tax applies to net earnings from self-employment and wages in excess of $250,000 (per year) for taxpayers filing a joint return, $125,000 for married individuals filing separate returns and more than $200,000 for other taxpayers.” (Fox Rothschild)

3. W-2 reporting requirement:

“The Affordable Care Act will require employers to provide information about the aggregate cost of employer-sponsored coverage on the W-2 Form for the 2012 tax year. 26 U.S.C. § 6051(a)(14). This new requirement does not apply to amounts contributed to any health savings account, salary reduction contributions to flexible spending accounts or Archer MSAs.” (Spilman Thomas & Battle)

4. Patient centered outcome research fee:

“Beginning in 2012 and through 2018, a new fee will be imposed on employers that sponsor self-funded group health plans and on the insurers of fully-insured group health plans. The amount of the fee is $1 per covered individual for the first plan year ending on or after September 30, 2012; $2 per covered individual for the following plan year; and an amount increased for inflation thereafter. For self-funded plans, employers will need to pay the fee using IRS Form 720 by the July 31 coinciding with or next following the end of each plan year.” (Bradley Arant Boult Cummings)

5. Flexible spending account cap:

“Effective for plan years beginning in 2013, employees’ contributions to Flexible Spending Accounts (FSAs) will be limited to $2,500 per tax year with annual inflation increases. There is no limit on employer contributions.” (FordHarrison)

The updates:

Additional reading:

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