Healthcare Regulations Suggest New Costs for Employers

Following the recent release of new regulations  (opens in a new tab) under the Patient Protection and Affordable Care Act (ACA), many employers are wondering how the new rules will affect them. Some of the new requirements will change what employers, including associations, will pay to provide insurance coverage to workers.  Here are three to be aware of.

Per-employee fee: In what’s come as something of a surprise, beginning in 2014, employers, including associations, will be hit with a $63-per-employee fee  (opens in a new tab) to help health insurance companies cover the difficult-to-predict costs of insuring individuals with preexisting conditions.

The fee, part of a three-year program, will scale down each year. It’s expected to raise $25 billion, most of which will go into a fund administered by the U.S. Department of Health and Human Services, the AP reports  (opens in a new tab).

Essential health benefits: Beginning January 1, 2014, all non-grandfathered individual and small-group health plans will be required to cover certain essential health benefits  (opens in a new tab) (EHBs), such as maternity and mental health services. Each state will determine EHB requirements for its residents.

Adding EHBs to the market is likely to bring big changes. For example, HHS estimates that 62 percent of current healthcare enrollees do not have access to maternity care, and 18 percent do not have access to mental health services.

The new regulation does not determine how the costs of covering EHBs will be shared between consumers and insurance companies.

Part-time employee coverage: Employers of part-time or seasonal workers will need to look closely at IRS guidelines  (opens in a new tab) differentiating between full-time and part-time employment statuses.

Starting January 1, 2014, employers will be fined if they fail to provide full-time employees (including part-time employees who classify as full-time) with health insurance coverage.

During a November conference call hosted by the American Bar Association’s Joint Committee on Employee Benefits  (opens in a new tab), attorney Henry Talavera recommended that employers begin assessing the status of their employees now, as they can have up to a 12-month look-back period for assessing who qualifies as a full-time employee.

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