Since the Supreme Court upheld “pay or play” mandates of the Affordable Care Act (ACA) last June, businesses and employment-based group health plans have accepted the need to prepare for health care reform changes taking effect in 2014.
Unfortunately, delays in the release of regulatory guidance have made it difficult for many businesses to understand their obligations, options, and their associated costs.
However, the impending January 1, 2014 deadline for compliance doesn’t allow most businesses the luxury for waiting for clarification. Businesses unfortunately must decide the direction they plan to take and start working to implement their choice while managing their existing health benefit programs and costs through 2013.
Health Care Reform Coping Steps
1. Know Your Workforce & Proper Worker Classifications
ACA decides what rules apply to which businesses or health plans based on the number of employees a business is considered to employ, their hours worked, their seasonal or other status, and other relevant classification. Rules vary in the relevant number of employees that trigger applicability of the rule and how businesses must count workers to decide when a particular rule applies.
2. Make Rough Cost Projection To Decide Whether To “Pay” or “Play”
Under ACA, each business can decide not to offer any health coverage for any employee provided the business can tolerate the resulting consequences. That involves a “shared responsibility” payment. Most businesses should project the cost of paying the shared responsibility payment against the cost of providing coverage to decide if it makes sense to even consider continuing to offer health coverage.
3. If Offering Health Coverage After 2013, Decide on Your Plan Design
What will be your coverage and terms? Any health coverage offered generally must be designed so the business prudently can afford to pay benefit and administration costs of the plan.
4. Understand The Cast Of Characters & What Hat(s) They Wear
Any party that exercises discretion or control over health plan administration, funds or certain other matters is considered a plan “fiduciary,” with responsibility for prudently and appropriately administering their health plan under current law.
5. Know What Rules Apply To Your Plan & How They Impact You & Your Health Plan
ACA adds to an already extensive list of complicated federal rules about health plans and their administration. These ever-expanding requirements impose civil or criminal sanctions or other liability on plan administrators for failing to meet certain regulations.
6. Update Health Plan Documents To Meet Requirements & Manage Exposures
Along with knowing what rules apply, timely updating written plan documents has never been more critical. ACA and other laws also require that employers comply with record keeping, reporting and other requirements.
7. Clean Up Claims and Appeals To Enhance Defensibility
Proper health plan claims documentation is critical to manage claims denial liabilities and defense costs.
8. Consistency Matters: Build Good Plan, Then Follow It
Adopt strong, legally compliant plan terms. They can do much to enhance the defensibility of the plan and minimize other risks and costs.
9. Ensure the Correct Party Carries Out the Plan in a Timely, Prudent, Provable Manner
Ideally, the party appointed to act as the named fiduciary should conduct all plan communications regarding that function in terms that makes clear its role and negates responsibility or authority of others.
10. Clean Up Data Collection, Protection & Reporting
While employers historically have collected and retained the names, place of residence, family relationships, social security number, and other information about employees, these requirements will continue to expand dramatically.
11. Provide Relevant Input to Regulators About Implementing the Affordable Care Act
Although the Supreme Court ruled the ACA to be Constitutional, there are still many opportunities to affect its mandates. Businesses should provide meaningful input to Congress and regulators concerning the rules.
12. Help Employees Build Their Health Care Self-Management Skills
Whether your company plans to provide health coverage after 2014 or not, providing employees with the ability to manage their health care needs can pay big dividends. For instance, wellness programs can help reduce lost time while helping employees get the most out of their health care costs.
13. Plan Your Defense & Exit Strategies
Develop your exit strategies to soften the landing in case your health plan experiences a legal or operational disaster.
Get Moving Now
Many compliance deadlines already have passed and impending deadlines allow limited time to finish arrangements, businesses need to get moving immediately to update their health plans to meet compliance and risk management risks under ACA.
Cynthia Stamer is a board certified labor & employment law attorney based in Plano. She specializes in employee benefit, HR and health care matters. http://www.cynthiastamer.com/
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