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Mercer

While the IRS has not yet published official 2017 dollar amounts for ACA “play or pay” assessments, Mercer has projected them, using the medical premium inflation factor in the HHS regulations. The following table shows the annual amounts, though employers incur assessments on a monthly basis.

ACA pay-or-play assessments (Section 4980H) Projected 2017 2016 2015
Not offering coverage (4980H(a)) $2,260 $2,160 $2,080
Offering coverage lacking minimum value or affordability (4980H(b)) 3,390 3,240 3,120

 

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From the earliest days of the Affordable Care Act, our survey found that large employers overwhelmingly remained committed to providing health coverage. This was not the case with small employers. Concerned about coverage mandates and increasing costs, many small employers thought it was likely that they would drop their plans within five years. But over the past few years there has been a dramatic decrease in the numbers of small employers (those with 50-499 employees) threatening to eliminate coverage and send employees to the public exchanges – from 21% in 2013, to 15% last year, to just 7% today. In his recent Forbes article covering the latest results of Mercer’s National Survey of Employer-Sponsored Health Plans, Bruce Japsen asked me to weigh in on this trend and small employers’ motivations for continuing to offer health benefits – which of course I was happy to do.

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The IRS released draft forms for the employer ACA reporting requirements late yesterday. I know those of you hoping for another delay of the employer shared responsibility requirements beyond 2015 aren’t happy to see the forms because it makes another delay less of a reality. Now that we have the draft forms, there are two big issues for employers (1) the instructions — hopefully to be released sometime in August — are a critical missing piece of the puzzle, and (2) data tracking needs to begin in January 2015 for reporting in early 2016. The challenge for many is that the data must be aggregated from multiple systems and this creates a huge strain on IT resources that typically have limited short-term capacity.

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While some provisions of the Affordable Care Act (ACA) went into effect in 2014, other significant changes are yet to come. Mercer’s latest Health Care Reform Survey — the seventh conducted since 2008 — shows that US employers are actively planning for the employer shared responsibility provisions that take effect in 2015. The survey includes responses from 767 US employers.

 

“While many employers are in compliance with the shared responsibility requirements of the Affordable Care Act, a substantial portion chose to wait until 2015 to expand eligibility,” said Beth Umland, Director of Employer Research for Health and Benefits at Mercer. “Not surprisingly, many of those waiting to extend coverage to employees who work 30 or more hours per week are organizations that will be the most affected. But there are ways to mitigate the impact, and organizations still have time to make changes for 2015 that could make a big difference in the cost of compliance.”

 

Learn about the issues US employers are facing as reform measures take effect, and how they are responding.

 

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Even if you think you understand ACA requirements and are providing the necessary access to health care to avoid the $2,000 per-employee assessment, if your company can’t unequivocally sign off on its offer of coverage to “substantially all” full-time employees (relaxed to 70% for 2015, but climbing to 95% by 2016), and isn’t able to properly track and report detailed, employee-specific data about its offer, you — and many other employers — may have a great deal more to do than you realize.

 

Here are four areas where we see employers getting tripped up on the dizzying criteria and complex technical requirements that are part and parcel of compliance with the employer mandate.

 

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Since this site was inspired by health care reform, it seems only fitting that we spent Monday — the day it actually launched! — inside the Beltway. First, Beth Umland, Mercer’s Director of Health & Benefits Research (and a contributor to this site), and I gave a briefing on Capitol Hill for congressional staffers, where we shared Mercer’s latest survey findings on trends in employer-sponsored coverage and employers’ response to health care reform. That afternoon, we invited some of the top health policy experts from Washington, DC, think tanks to sit around a table, flip through Mercer’s survey results, and talk about what might happen in the future as we continue down the ACA implementation path. It’s always interesting for us to see which survey results our Washington audiences find the most significant — or the most surprising. And it’s useful to hear what questions they wished we’d asked. Here are some highlights from our discussions.

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This article dives into questions regarding federal subsidies for health insurance in the public marketplace that may have been set incorrectly. Why should employers be interested? For anyone receiving advanced premium tax credits in the public marketplace, the public exchange is required to send a notice to their employer. The notice will identify all employees who have qualified and received approval for premium tax credits. While employers are not at risk for shared responsibility penalties for 2014, there are several reasons employers should pay attention to the notices.

 

 

 

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The question of whether to discourage or prohibit employees' spouses who have other coverage available from enrolling is worth considering, and it's certainly getting a lot of attention. It's important to note, however, that while many employers are thinking about it, relatively few have acted. This article cites a survey finding that 45% of about 600 employers surveyed were "planning" to exclude spouses in 2014. But a Mercer survey taken this January found that fewer than half that number had actually done so — and they were more likely to require a surcharge than to exclude spouses entirely (learn more). This article, which quotes our own Tracy Watts, looks at pros and cons and presents an interesting take on what would happen if all employers excluded working spouses: "For every spouse you lose, and employee you gain, you end up losing more because you subsidize employee coverage more than you subsidize spousal coverage,” says Paul Fronstin, EBRI’s director of health research and author of a report discussed in this article.

 

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When we asked employers in a recent survey about their response to the ACA's shared responsibility requirements, about one in ten told us they would have fewer employees working 30 or more hours per week by 2015. The authors of this article - both involved in litigation law - caution that "to achieve the dual goals of managing health-care costs and avoiding ERISA liability, a company must enact any changes in its workforce management in thoughtful and measured steps."  They provide helpful advice for employers considering this strategy.

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This article recounts the chronology of delays we have experienced to date in the implementation of the ACA.  If the past is any predictor of the future, we will likely see more delays.

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Hospitality organizations like restaurants and hotels, which typically rely on part-time, low-wage employees, have been the hardest hit by ACA rules requiring a minimum plan value and affordable contributions. Extending coverage to all employees working 30+ hours will be especially challenging.  Some have chosen to "go Dutch" with their customers.

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The Obama Administration released final rules that will either delay or relax the provisions of the ACA employer mandate in 2015. Employers with 50-99 full-time equivalent employees will have another year to comply. Those with 100 or more full-time equivalent employees will be able to avoid the $2,000 (indexed) non-offering payment if they provide coverage to at least 70% of their full-time employees. However, some employers have already taken steps to comply in 2015 and the relief has come too late.

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