The Affordable Care Act “pay or play” penalty under §4980 now, after a delay, takes effect for large companies in January 2015 and for smaller companies (with at least 50 employees) a year later. There is a great deal for all employers to do now to get ready.
Here are the 13 steps you should take now:
1. Know Your Workforce and 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.
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.
2. Make Rough Cost Projections 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 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 2015, 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 and 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 and How They Affect You
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 and Manage Exposures
Along with knowing what rules apply, updating written plan documents in timely fashion 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 a 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 make clear its role and negates responsibility or authority of others.
10. Clean Up Data Collection, Protection and Reporting
11. Provide Relevant Input to Regulators About Implementing the ACA
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 2015 or not, providing employees with the ability to manage their healthcare needs can pay big dividends.
13. Plan Your Defense and 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.
