Smart Benefits: Obamacare Delay Helps Employers Prepare
Monday, July 08, 2013
While this means employers won't have to pay fines in 2014, other provisions of the law, like the individual mandate requirements and the opening of the state healthcare Exchanges for January 1, 2014, are still expected to move forward on the administration’s current timeline.
A Relief for Employers
For more than a year, employers have been preparing for the “Pay or Play" mandate, which requires employers with more than 50 employees to provide health insurance (play) or pay steep fines. But under the law, even if employers provide coverage, they still pay a per employee fine if it doesn’t meet certain conditions.
To determine if they meet the law’s requirement of affordability and minimum plan value – and calculate what the overall cost will be if they don’t - employers have been investing a lot of effort. And they shared widespread concern about the shortage of time to make any necessary plan design changes and communicate what they mean to employees.
Time to Calculate
Not only does the mandate delay give employers more time to make and share changes, it also gives them longer to understand the implications of healthcare reform's new definition of full-time employee, which changes to 30 or more hours.
This definition means employers need to start capturing and measuring hours for all part-time, variable employees, such as seasonal, temp, intern, co-op and per diem employees, to determine if they would be newly eligible for benefit coverage.
In many regards, the PPACA law is vague in these areas, so employers are left to make “reasonable assumptions” with some of their recording requirements. And, they’ve been told to track and document hours to prepare for 2015, without knowing the specifics of the reporting requirements. Now, with the Obama administration delaying the rollout of the mandate, employers will have more time to count employees and hopefully get more definitive instruction.
Alleviating Exchange Angst
Prior to last week's decision, employers were worried about preparing for all these changes amidst the rollout of the Exchanges at the same time, especially in the middle of what is the busiest open enrollment time of year, January 1st.
Now, the Exchanges will roll out first, giving employers up to a full year to understand them and educate employees.
The Delay Doesn't Stall All Reform Impacts
The one year delay doesn’t mean employers should ease up in their preparations for the mandate, or other healthcare reform provisions, particularly since the remaining aspects of the law will still roll out in 2014.
Employers need to keep planning for these changes and implementing new plans and policies as needed. This week’s announcement just gives them more time to do so.
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