WSJ: Pricing Glitch Afflicts Rollout of Online Health Exchanges

http://online.wsj.com/article/SB10001424127887324807704579085472970959370.html?mod=WSJ_hps_LEFTTopStories

Balancing the Affordable Care Act and ERISA

http://www.jdsupra.com/legalnews/balancing-the-affordable-care-act-and-er-82099/#!

Will You Qualify for an Obamacare Subsidy?

http://www.pbs.org/newshour/rundown/2013/09/will-you-qualify-for-an-obamacare-subsidy.html

Washington Post: Obamacare’s many definitions of small business breed confusion, challenges

http://www.washingtonpost.com/business/on-small-business/obamacares-many-definitions-of-small-business-breed-confusion-challenges/2013/08/23/0a2c946e-0b40-11e3-9941-6711ed662e71_story.html

WSJ: Will the Health-Care Law Help Small Businesses?

http://online.wsj.com/article/SB10001424127887323899704578587980558664600.html?mod=WSJ_hps_MIDDLENexttoWhatsNewsThird

WSJ: Health-Law Delays Starting to Pile Up

http://online.wsj.com/article/SB10001424127887323446404579011153329228052.html?mod=WSJ_hps_MIDDLENexttoWhatsNewsTop

IRS Issues Guidance on Delay of Employer Mandate

Last week, the IRS issued guidance on the one-year delay of Obamacare's employer shared responsibility (i.e., "Pay or Play") mandate.  The guidance confirmed that the new effective date for both the employer reporting requirements and penalty provisions will be January 1, 2015.   This gives  "large employers" (i.e., those with 50 or more full-time employees or equivalents) an additional year to plan for the employer mandate.

Many business owners are asking how they should proceed in light of the delay.  Here are my initial thoughts:

• One option is to take advantage of the additional year to plan for implementation and better ensure compliance in 2015.  
• Large employers could begin putting in place systems to identify and count their full-time employees and full-time equivalents under the rather complex proposed regulations issued by the IRS earlier this year.  The IRS guidance encourages large employers to voluntarily begin reporting information in 2014 as a kind of of real-world testing of the mandatory reporting requirements that will begin in 2015.  Employers could use 2014 as a kind of trial run to get ready for 2015.
• Closely-held businesses with overlapping ownership might use the extra time to determine whether their employees will be aggregated together for purposes of the employer mandate under the "controlled group" rules.  If so, such businesses now have additional time to consider various options to limit Obamacare liability, including business restructuring, business succession plans, and estate planning.

• A second option that some large employers may want to consider is simply "wait and see."  
• Although the Obama Administration steadfastly maintains that the one-year delay will not affect the ultimate implementation of the employer mandate, it seems clear that the delay has clouded the employer mandate in uncertainty as to whether it will ever be implemented in its current form.  Business lobbies, for instance have pressed Congress to change the ACA's definition of full-time employee (currently those working at least 30 hours per week).  Even in the current dysfunctional Congress, there is some possibility that bipartisan support could emerge to amend the employer mandate before 2015.
• Further, the IRS still has not issued final rules on the employer mandate.  The IRS previously suggested that the final rules would not differ much from the proposed rules.  However, in light of the delay, it would not be surprising to see some significant changes.

Employers of all sizes should also keep in mind that the delay in the "Pay or Play" mandate does not affect other Obamacare provisions that are set to take effect this year.  For instance, employers must still issue notices to employees about the availability of health care exchanges by October 1, 2013. The individual mandate is still in effect, so employers who do not offer minimum health coverage should bear in mind that any otherwise uninsured employees will be required to obtain minimum health insurance or else face a possible tax penalty.

This article is intended to provide information about current legal developments of general interest and consists of the opinions of the author.  It should not be construed as legal advice, and readers should not act upon the information contained herein without consulting professional counsel.

The Affordable Care Act’s Patient-Centered Outcomes Fee Deadline is Approaching - Many Employers with Self-Insured Plans Must Report and Pay PCORI Fees by July 31

http://www.jdsupra.com/legalnews/the-affordable-care-acts-patient-center-46843/?utm_source=LU_Emails

WSJ:Health-Insurance Exchanges Are Falling Behind Schedule

http://online.wsj.com/article/SB10001424127887324520904578553871314315986.html?mod=WSJ_hps_LEFTTopStories

WSJ: Employers Eye Bare-Bones Health Plans Under New Law

An interesting story in the Wall Street Journal discusses how larger employers are looking to comply with the Affordable Care Act by offering bare-bones coverage that does not even cover hospitalization, surgery, X-rays, or maternity care.  Insurance brokers are now marketing these stripped-down products, particularly to employers in low-wage industries.

As Prof. Timothy Jost and others have pointed out, large-group plans (i.e., those for employers with more than 100  employees) and self-insured plans are exempt from one of the most important provisions in the ACA--the requirement to cover a package of "essential health-benefits" including ambulatory and emergency services, mental health care, and maternity and newborn care.  Large-group and self-insured plans are only required to cover preventive health services, such as immunizations, well-child visits, and various screenings.  By contrast, small-group plans (i.e., those for employers with 100 or fewer employees) must cover the full package of essential health benefits.

This is a major loophole in the ACA that has at least two negative consequences.  First, it puts small- and medium-sized businesses at a competitive disadvantage against larger businesses that can offer stripped-down coverage and still avoid penalties under the ACA.  Smaller business, meanwhile, must either offer more expensive plans with generous benefits or pay potentially hefty penalties.

This flaw in the ACA also hits low-wage employees of those large employers who decide to offer only the kind of bare-bones plans described by the Wall Street Journal.   Employees in this situation likely would be better off if the employer had offered no coverage at all.  If an employee chooses to accept the bare-bones coverage, he and his family would not really have what we think of as health insurance.  If the employee is seriously injured in an auto accident, the low-benefit insurance would not cover the ambulance ride, would not cover the surgery, would not cover the hospital stay, and would not cover the rehabilitation.  The employee could be left holding a bill on the order of tens of thousands of dollars.

On the other hand, the employee could decline the employer-sponsored coverage and go out and purchase coverage on one of the new Health Insurance Exchanges (or Marketplaces).  However, assuming the bare-bones coverage offered by the employer was affordable and offered minimum value (as set forth in the ACA), the employee would not be eligible for a premium tax credit when he buys insurance on an exchange.  For low-wage workers, the premium tax credit would otherwise cover a large percentage of the cost of premiums.  But for the unlucky worker whose employer offers bare-bones coverage, he will have to pay the full sticker price if wants to buy health insurance with real benefits.

I welcome your comments on this issue, which appears to be a major structural problem with the ACA.

Obamacare Tax Aimed At 'Cadillac Plans' Will Hurt Ordinary Workers: Report

http://www.huffingtonpost.com/2013/05/08/obamacare-tax-cadillac-plans_n_3239488.html?utm_hp_ref=business

WSJ: Employers Push Back on Health Law's Insurance Trigger

This story by WSJ discusses lobbying by the National Restaurant Association and others to raise the threshold (now 30 hours per week) for the definition of full-time employees under the ACA.  A couple corrections/clarifications: It states that "Under the Affordable Care Act, employers must provide health insurance to employees working an average of 30 hours a week or more. If they don't, the employer faces fees starting at $2,000 per worker annually."  But it should also note that this requirement only kicks in for "large" employers with 50 or more full-time employees or full-time equivalents, and even those businesses are not subject to a penalty for their first 30 full-time employees.  I also have a nit-picky correction: large employers do not actually have to "provide" insurance to full-time employees, they only have to "offer" coverage to those employees to comply.

New IRS Proposed Rules on Affordability and Minimum Value

On April 30, 2013, the IRS released new proposed rules addressing certain questions about when employer-sponsored coverage is "affordable" and when it provides "minimum value."

This Health Affairs Blog post provides an excellent summary.  Among other things, it discusses various safe harbors that the IRS has proposed to establish that a plan has minimum value.  For instance, minimum value would be established for a plan with "a $3,500 medical deductible, $0 drug deductible, 60 percent medical cost sharing, a $10/$20/$50 copay tiered drug plan, and a 75 percent coinsurance for specialty drugs."

Government Releases Form Individuals Will Use to Apply for Exchange Coverage

http://money.cnn.com/2013/05/01/news/economy/obamacare-application/

Bloomberg Businessweek: Advice for Small Employers Confused by Obamacare

http://www.businessweek.com/articles/2013-04-22/advice-for-small-employers-confused-by-obamacare-part-2

WSJ: Some Small Businesses Opt for the Health-Care Penalty

http://online.wsj.com/article/SB10001424127887323916304578401413507987532.html?mod=ITP_marketplace_0

Financial Times: Perry Under Pressure to Accept Obamacare (subscription required)

http://www.ft.com/intl/cms/s/0/564bdba2-99f3-11e2-83ca-00144feabdc0.html#axzz2PDuDrRN0

FT: Employers Seek Help over Obamacare Costs

A report in the Financial Times says that the U.S. Chamber of Commerce has petitioned the Obama administration to exempt employers in states that have rejected Medicaid expansion (such as Texas) from tax penalties for failing to provide coverage to employees would would have been covered by Medicaid.  The Chamber points to the administration's decision to exempt low-income workers in states rejecting Medicaid expansion from the individual mandate's tax penalties. 

http://www.ft.com/intl/cms/s/0/1ae394e6-9558-11e2-a151-00144feabdc0.html#axzz2OmrqLhKO

Bloomberg Businessweek: Small Employers are Clueless about Obamacare

Recent survey finds that many small business owners incorrectly believe that they will be subject to the employer mandate.

http://www.businessweek.com/articles/2013-03-21/small-employers-are-clueless-about-obamacare

WSJ: Health Insurers Warn on Premiums

Insurers say premiums for some individual and small-group plans could jump by as much as 116%.

http://online.wsj.com/article/SB10001424127887324557804578374761054496682.html?mod=WSJ_hpp_LEFTTopStories