Benefits buzz from Warren G. Bender Co.
 Sept. 26, 2013

While the employer mandate provision has been delayed until 2015, time is ticking away as the deadline for notices required by the Patient Protection and Affordable Care Act (PPACA) is fast approaching.

Covered California Notification The Treasury Department announced in July 2013 that enforcement of the employer shared responsibility payments of the PPACA would be delayed by one year (until 2015), but employers are still required to comply with several aspects of the law by notifying employees about the exchange, also known as Covered California, regardless of an employer’s insurance offerings.

Before October 1, 2013 all employers covered by the Fair Labor Standards Act (FLSA) are required to provide current employees with notices regarding new health insurance marketplace coverage options, including keeping a record of their notification.

This provision of the PPACA creates a new section (18B) of the FLSA that requires employers to notify employees in writing about the exchange and federal subsidies to buy private health plans through the exchange. The notices also must inform employees if they opt to buy coverage through the exchange (instead of an employer-sponsored plan) that they could lose their employer’s contribution (if any) to employer-sponsored coverage.

Also starting October 1, 2013 employers must provide the notices to each new hire within 14 days of the employee starting work.

Additionally, the notice must explain that health plans bought on the exchange don’t have the same tax benefits as employer sponsored coverage.

Note: The U.S. Department of Labor (DOL) has created two model notices—one for employers that do not offer a health plan and another for employers that do offer a health plan to some or all employees.

The model notices (OMB No. 1210-0149) can be found at www.dol.gov/ebsa/healthreform or by contacting us at rguillen@wgbender.com.

It’s also important that employers be aware of changes to the required Waiting Period Maximums and Summary of Benefits and Coverage notices.

Waiting Period Maximums California Assembly Bill 1083 (chaptered September 30, 2012) changes the maximum waiting period to 60 days for all renewals on or after January 1, 2014.

Leaving employers with three Waiting Period options in 2014:

  • First of the month following date of hire.
  • First of the month following 30-day waiting period.
  • New: Sixty days following date of hire (partial months to be prorated).

If an employer’s waiting period exceeds the maximum period, insurance carriers will be forcing employers to reduce their waiting periods accordingly at renewal.

Summary of Benefits and Coverage
The Department of Labor requires health insurance issuers and group health plans to provide participants and enrollees with a summary of benefits and coverage (SBC) describing the health plan’s covered benefits, cost-sharing provisions, coverage limitations and exceptions, and other key features (required for all renewals on and after 10/1/2012).

Looking Ahead to 2015
Employers cannot afford to wait until next year to start their planning to be compliant with the PPACA. Although the penalties under the employer mandate have been delayed until 2015, employers will still face compliance hurdles in 2014 in implementing the other provisions of the PPACA. In addition, many of the transition rules have not yet been delayed and planning for 2015 should start sooner than employers expect.

The following resources will help you stay up to date on the PPACA.

Warren G. Bender Co. is one of the largest independently owned brokerages in the Sacramento area and we are proud to provide innovative solutions to our clients in the Western States. Our market position enhances our influence and strategies on behalf of our clients and customers, allowing them to concentrate their time and energy on running successful businesses and leading more fulfilling lives. Our Mission: Provide protection, superior service and education to those who matter most, Our Customers.

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