Key ACA Penalties Delayed Until 2015

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For many of us, the last year has been consumed with trying to absorb all of the requirements and regulations of the Affordable Care Act (ACA) in order to avoid the heavy tax penalties for non-compliance set to go into effect on January 1, 2014.  In a late-breaking announcement right before the Independence Day holiday, the government recognized the strain that the reporting requirements were placing on most employers, and extended – for one year – the deadline for reporting health coverage information.  Without the coverage information, tax penalties cannot be calculated, so they were also deferred to 2015.

While this certainly gave us more reason to celebrate on July 4, what does it mean for what we need to do now? None of the other provisions of ACA have changed, so there are still plenty of things on your plate: Covered California, the health benefits exchange, will still have an open enrollment from October 2013 through March 2014, and employers are still required to send notices to all employees by October 1, 2013 informing them about the availability of exchange coverage. Employers will still need to let employees and the exchange know that the health plan offered to employees meets the requirements for affordability and coverage. Plan design mandates will still go into effect on schedule. And Patient Centered Outcomes Research Institute (PCORI) fees are still due by July 31, 2013.

However, an extension of any deadline gives us extra time to improve processes and develop strategy. As Keenan has begun to work with employers on Work Force Analysis Studies, gathering the data to do compliance testing has revealed deficiencies in reporting systems and confusion in job classifications. While many employers use multiple ways of classifying benefit-eligible employees, ACA recognizes only two classifications: Full Time Employee (works at least 30 hours per work or 130 hours per month) and Not Full Time Employee (works less than 30 per week or 130 hours per month.) This means that tracking actual hours worked becomes more important than job classifications, and most employers’ eligibility systems are not set up this way.

The gift of time means that our clients have the opportunity to approach compliance testing and tracking work hours with less administrative burden by reviewing job classifications, eligibility criteria and benefit philosophy based on the result of a preliminary Work Force Analysis Study. Any needed changes can then be made in an orderly way rather than in a rush, and compliance can be confirmed by a second study with verified data at a lower cost. For a discussion of the data requirements and process for completion of a Work Force Analysis Study, please contact your Keenan Representative.


Additional Information

Treasury Department Release