In a move that was not entirely unanticipated, and which was generally applauded by employers, the Obama administration announced last week that it would delay implementation of the employer health coverage mandate under PPACA until January 1, 2015. The so called “play-or-pay” mandate requires employers with at least 50 full-time-equivalent employees to offer affordable health coverage to employees work at least 30 hours a week. It was scheduled to go into effect on January 1, 2014, but it is now postponed. The good news is that this gives employers another year to prepare. The bad news is that it remains unclear what compliance still means for employers.
While the employer mandate is suspended, a variety of key provisions that go into effect on January 1, 2014, remain in play. Subject to any future adjustments, plans are still obligated to comply with a number of specific changes. These include:
- Waiting periods cannot exceed 90 days
- Caps on annual out-of-pocket maximums and elimination of lifetime and annual limits
- revised Summary of Benefits and Coverage notices and a required notice of availability of exchanges
- Excise taxes and fees, such as the PCORI fee and the reinsurance program fee
While we are awaiting further guidance, and possible additional changes, plan sponsors should continue to take necessary steps to make sure their plans are in compliance. Even though the employer pay-or-play mandate is suspended, plan sponsors could still be found to have non-compliant plans and face penalties for not complying with PPACA. So while you might be able to postpone changes to relating to eligibility and affordability, you still have to revise your plan to make sure it complies. This delay only effects who you might have to offer coverage to, not the nature of the coverage that will ultimately be offered.
So employers as plan sponsors should take this delay as an opportunity to focus on making their plans 100% compliant. Consider 2014 a “measurement” year where you can implement those employment structures you might have already discussed to make sure your part-time and full-time employees are clearly defined. Consider this a brief reprieve and not an excuse to ignore PPACA completely. Employers might have been given some breathing room on the final due date, but the project still has to be completed.