The newly enacted federal Patient Protection and Affordable Care Act (the \”Act\”) Makes significant changes to the health and other benefits that employers offer to their employees. Additionally, there are administrative requirements required in the act with which an employer will need to comply. It is imperative that employers have a detailed understanding of what changes are on the immediate horizon, as well as what changes will be required in the future, so that they may adequately plan and account for the administrative and financial impact of these changes to their business and on their workforce. While we continue to analyze the hundreds of provisions in the over 2,000 pages of new federal law, the purpose of this paper is to provide employers with a preliminary summary and explanation of the changes, and to alert employers to ambiguous areas in the act that will need to be clarified by regulations yet to be issued by federal agencies such as Health and Human Services and the IRS.
Timing of new requirements; details continue to be defined. It is important to note that most of the provisions that will have a major impact on the health insurance marketplace – such as the new framework for health insurance products and the employer mandate to offer coverage – are not scheduled to go into effect until 2014. However, some of the provisions that have been less publicized in the media have effective dates in 2010 or are even retroactive to the beginning of 2010. Many of the deadlines discussed in this blog are calculated from the date of the act´s enactment,
March 23, 2010. For example, most of the effective dates in 2010 apply to plan years beginning on or after six months after the date of enactment (or September 23, 2010).
It is also important to note that many of the provisions in the act instruct federal agencies such as Health and Human Services and the IRS to define details, issue implementation guidelines or regulations, and resolve ambiguities. Such a process is typical with enacted legislation, and while a few guidelines have been issued, many of the provisions with near-term implementation dates have yet to be defined.
Where interpretation of the law is unclear, employers should consult their legal counsel for guidance. Health plan auto-enrollment effective date is unclear. The act will require employers with more than 200 full-time employees to automatically enroll new full-time employees in health coverage, although employees have the ability to opt out of coverage. The effective date for this requirement is unclear, but because the act states that the enrollment must be in accordance with regulations to be issued, it is possible that this requirement is not effective until those regulations are issued.
Changes required in 2012
Issue 1099s for corporate service providers. One important change made by the act unrelated to health benefits requires employers beginning in 2012 to provide an IRS Form 1099 to all corporate service providers receiving more than $600 per year for services or property. Currently, 1099s need only be generated for non-corporate service providers and only on services.