The Obama administration's announcement Wednesday to delay by one year the shared responsibility requirement of the Affordable Healthcare Act (ACA) has come as a shock – and major source of relief – to many business owners. If you have been following our series of blogs on the Act, or attended our recent seminar, you know that, prior to this week's announcement, large employers (50 or more workers) would have been required on January 1, 2014 to provide full-time workers with affordable health coverage. That, or pay steep fines, if even one of its workers ended up getting government-subsidized insurance. That so-called "Pay or Play" requirement has been a real source of concern for business owners. Large businesses, most of whom already provide insurance, find the compliance and reporting aspects of the Act too laborious. Small business owners have been reluctant to expand because of it. Both are breathing a little easier this week. But the delay of this requirement should not be taken lightly or with too much excitement; the demands of the ACA are still in place and this extra time should be used to plan for its eventual implementation.
Most importantly, employers must inform their employees on October 1st about available health coverage on the Health Insurance Exchange, the government-run marketplace where employees may purchase insurance. Employers must also implement ACA design rules, including no annual dollar limits on essential health benefits, no pre-existing condition exclusions, no excessive waiting periods, and limits on cost sharing/deductibles. Treasury has indicated that it will soon provide more formal guidance on ACA implementation and any transition relief that will be available, and we will continue to update you as changes occur.
Unfortunately, the most certain thing we know about the future of the ACA is that it is still very uncertain! For now, our advice to businesses is to continue to review available health plans and assesses the options. Regardless of what happens, all employers need to secure a sound health insurance strategy.