Maintenance of the status quo in Washington, D.C. (the re-election of Barack Obama, with a Republican majority in the House of Representatives and a Democratic majority in the Senate) means that implementation of the Patient Protection and Affordable Care Act (PPACA) likely will move forward largely as the law was passed in 2010.
Some have speculated that pressure to reduce the federal deficit may result in reduced funding for parts of the law, such as the premium credits available to individuals with lower incomes, but it is far too soon to tell how this factor may play out.
PPACA drafters left the task of working out many of the details to the the U.S. Department of Labor, the Internal Revenue Service and the U.S. Department of Health and Human Services (HHS).
Because PPACA leaves so many questions unanswered, employers and their benefits advisors can expect that an enormous number of regulations and other types of guidance will be issued between now and the end of 2013.
Of greatest interest to many employers is the employer shared responsibility (“play or pay”) requirement.
As of Jan. 1, 2014 employers who have 50 or more full-time or full-time equivalent employees must offer “minimum essential” (basic) medical coverage for their full-time (30 or more hours per week) employees or pay a penalty of $2,000 per full-time employee, excluding the first 30 employees.
Employers who offer coverage deemed not “affordable,” or who fail to provide “minimum value” must pay a penalty of $3,000 for each employee who receives a premium credit. (Coverage is not “affordable” if the employee’s cost of single coverage is more than 9.5 percent of income. Coverage does not provide minimum value if it is expected to pay less than 60 percent of anticipated claims.)
The health insurance exchanges are also scheduled to begin operation in January 2014. (While PPACA is a federal law, the health insurance exchanges were designed to be operated by the states.)
A number of states have delayed work on the exchanges pending the outcome of this election, while a few have affirmatively decided not to create a state exchange. If a state is unable or chooses not to create an exchange, the federal government will run the exchange on the state’s behalf.