The new year did not render health care reform as just a bad dream.
We still must comply – more than ever – with reform. Many of the Patient Protection and Affordable Care Act’s key reforms will become effective in 2014 or at the end of the year, such as:
• Health plan design changes.
• Increased wellness program guidelines.
• New reinsurance fees.
• Employer “pay or play” mandate (Jan. 1, 2015).
• Reporting of coverage.
In addition to these key reforms for employers, the signature provision of the Affordable Care Act requires most individuals and their dependents to have health insurance in 2014 or pay a penalty for noncompliance in 2015 (when they file their 2014 taxes).
The most recent number of enrollees to this individual marketplace is 2.2 million Americans, currently comprised of a large population of the older, sick population (50 percent over age 45) with not enough young, healthy people to smooth out the risk (only 24 percent ages 18-35).
The marketplace is poised to become a runaway government program with massive spiraling costs. If this enrollment continues, which seems likely because penalty costs are cheaper than coverage, the government will need to get the funding from somewhere ... which most likely will be employers. That is why this is important to businesses and companies.
The government could consider getting more aggressive with enforcement of existing laws regarding the Employee Retirement Income Security Act, the Health Insurance Portability and Accountability Act and health care reform guidelines.
As we know, taxes are unpopular, which leaves us with penalties for noncompliance. For example:
• $2,000 per employee penalty for not providing affordable insurance (employers over 50 employees).
• Fines for not having proper summary plan description and/or not providing to employees upon request can quickly approach $50,000.
• Fines for not administrating your Health Reimbursement Account properly.
• HIPAA fines for not accurately protecting employee information.
(A) Civil penalties for breach of HIPAA are $25,000 per year, per person, per standard.
(B) Thus, if two standards are violated with respect to one person, the potential penalties could amount to as much as $50,000.
Above all, you should not fear these penalties but instead use practical steps to ensure compliance with all existing laws and regulations. The best strategy is to have a strategy:
(1) Prepare and plan:
To prepare for this next phase of ACA reforms, employers should review upcoming requirements and make sure they have a compliance strategy in place.
(2) Consult your experts:
Utilize the experts already on your payroll; employee benefit consultants/brokers, carriers and tax advisers. They should each have a part in ensuring your 2014 compliance strategy is accurately executed and updated to stay current with ever-changing laws.
(3) Protection and security:
Source a company or employee benefits broker that can create a compliance binder for your company to ensure you are 100 percent ERISA and HIPAA compliant. They are your experts for a reason.
It may take time to gather internal data, wrap documents for compliance regulations and implement best practices, but it can save you and your company massive fines in the long run.
It may be a new year, but your approach to health care reform can change. Be proactive, use your experts and start creating your successful action plan today.