Compliance June 17, 2013

Federal and Mass. Health Reform May Conflict

June 17, 2013 (PLANSPONSOR.com) – Differences between the Patient Protection and Affordable Care Act (PPACA) and the Massachusetts health care law may affect employers with Massachusetts employees.
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A bulletin from Towers Watson said the individual mandate under the Massachusetts health care law will apparently remain in effect in 2014. So, Massachusetts residents must ensure they meet both the minimum essential coverage (MEC) requirement imposed by the PPACA and the minimum creditable coverage (MCC) requirement imposed by the Massachusetts law in order to avoid penalties under those laws.

Differences between the PPACA and Massachusetts requirements may require employers to obtain a certification (waiver) from the Massachusetts Health Connector (the Connector) to ensure their employees do not face penalties under the state health care reform law. The Massachusetts employer mandate also remains in effect for 2014, barring any last-minute action by Massachusetts state legislators.

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Towers Watson determined that some key action items for employers include:

  • Reviewing their plans to determine whether the coverage meets the Massachusetts MCC requirements;
  • If coverage does not meet the MCC requirements, employers ensuring they have a certification from the Connector. Employers that do not have a certification should file for one; and
  • Those with employees in Massachusetts may want to communicate that such employees will be subject to both the federal and state requirements, and let them know whether their health coverage meets the state standards.

Massachusetts Governor Deval Patrick has proposed updating the state’s universal health care regulations in anticipation of provisions of the PPACA (see “Mass.Governor Proposes Changes to State Health Law”).

More information is here.

Benefits June 17, 2013

Companies to Continue Health Care Coverage

June 17, 2013 (PLANSPONSOR.com) – When the play-or-pay provision of the Affordable Care Act (ACA) takes effect next year, most companies are opting to play.
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Law firm Warner Norcross & Judd recently surveyed human resource professionals and found 97% of the 131 respondents will continue offering health care coverage to employees. In addition, 58% of the companies that will continue with coverage said their insurance plans will not change significantly.

Many HR professionals said their benefits packages make them more desirable employers. Eliminating the benefits packages would affect employee morale and employee wellness.

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The survey results showed more than half of respondents (56%) will continue offering coverage with no significant changes to their plans, and 41% will continue offering coverage but with modifications to their plans. In addition, 1% will continue to offer coverage for now but will drop coverage if their competitors do so, and 2% will discontinue coverage for employees and pay the penalties.

The ACA calls for companies with 50 or more full-time-equivalent employees to offer health care coverage or pay a fine that will support subsidies offered through the health insurance marketplace where uninsured people can buy their own coverage. The penalty for failure to offer coverage is $2,000 per full-time employee, though employers may subtract 30 from the total number of employees. Unlike expenses for providing health care coverage to employees, the penalty is nondeductible.

“The bottom line is that employers will continue offering coverage because that’s what they need to do to compete in the labor market,” said Norbert Kugele, a Norcross attorney specializing in health and welfare benefits. “Health care coverage is a good tool for attracting and retaining workers. The ACA doesn’t change that. And employers benefit from this as well, because healthy workers are more productive than unhealthy workers.”

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