S ince the U.S. Supreme Court upheld the Affordable Care Act (ACA) last June, the amount of ACA-related federal regulations and guidance has greatly increased as January 1, 2014 (the date the most significant provisions of the ACA take effect) draws closer. Most recently, on December 28, the IRS released long awaited proposed regulations implementing the Employer Shared Responsibility provisions of the ACA (those that require large employers to offer health care coverage that is both "affordable" and meets "minimum standards" to all of their "full-time" employees or face potentially significant financial penalties). Other provisions of the ACA and its implementing regulations will impose potentially significant new fees on employer health plans and health insurers that will fund other ACA initiatives. In order to comply with these new mandates by the January 1, 2014 effective date institutions should be planning, making decisions and taking action now.

+ Employer Shared Responsibility Requirements ("Play or Pay") and Penalties

Employers failing to offer "affordable" coverage meeting "minimum standards" to 95% of their "full-time" employees and, beginning in 2015, their "dependents" (all terms defined in the ACA and its implementing regulations and guidance), will be required to pay financial penalties if at least one of their full-time employees subsequently obtains coverage through one of the state health insurance exchanges established pursuant to the ACA and receives a premium tax credit or cost sharing reduction. The failure of an employer to offer coverage to at least 95% of its "full-time" employees (and their "dependents") can result in a yearly penalty of up to $2,000 per each full-time employee (including all those who were in fact offered coverage). If an employer offers coverage to at least 95% of its "full-time" employees (and their "dependents") but that coverage nonetheless does not meet the affordability or minimum value standards, the yearly penalty could be up to $3,000 for every full-time employee receiving a premium tax credit or cost sharing reduction as a result of purchasing coverage via a state exchange.

To assess the potential impact of these penalties, institutions must identify their "full-time" employees (defined by the ACA as any employee working on average at least 30 hours per week). In particular, institutions must determine whether their adjunct faculty and other variable hour employees should be counted as "full-time" and therefore offered health care coverage, or whether adjustments should be made to their employment policies so that these employees will not be considered "full-time." A safe harbor included in the regulations for these variable hour employees uses a "look-back" period, so any adjustments will need to be made well before January 1, 2014. Institutions must also ensure that the coverage they offer is both "affordable" and meets "minimum standards." The Act and its implementing regulations also provide certain safe harbors for these compliance obligations.

+ New Employer ACA Fees

In addition, institutions need to plan and prepare for two new fees: the Patient-Centered Outcomes Research Institute fee, which will be due on July 31, 2013 for plan years ending between October 1 and December 31, 2012; and on July 31 of subsequent years (for seven years) for plan years ending in the previous 12 months. The fee is $1 multiplied by the number of "covered lives" for year one and increases gradually in subsequent years. Institutions also need to be ready for the Transitional Reinsurance Program fee. HHS proposes to assess this fee on December 31 of each year from 2014 through 2016. HHS has proposed that this fee be $63 multiplied by the number of "covered lives." Both fees apply to both fully-insured and self-insured plans.

This program will cover these and other important ACA employer compliance requirements and institutional options in detail, including:

  • •  Preparing for the employer "Play or Pay" requirement
  • •  Understanding the role of state insurance exchanges in the "Play or Pay" requirement
  • •  Institutional responsibilities and the scope of the potential penalties
  • •  How to determine who is a “full-time” employee
  • •  Understanding college or university options with respect to the "Play or Pay" requirement
  • •  Understanding the Patient-Centered Outcomes Research Institute and the Transitional Reinsurance Program fees
  • •  Other ACA issues and obligations on the horizon

The program will conclude with a look at issues and next steps for student health insurance plans, and the current status of challenges to the ACA by religious institutions as well as other pending challenges. Please join our panel of experienced counsel for a review of these important and fast approaching ACA compliance obligations for your institutions.Register today!

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