Professional Service Agreement

ACA Employer Mandate Delayed until 2015

July 03, 2013

The Affordable Care Act (ACA) requirement that large employers (businesses with 50 or more full-time equivalent employees) must offer health insurance to full time employees beginning January 1, 2014, or face a fine, has been delayed one (1) year until January 1, 2015.

While formal guidance has yet to be issued on the recent delay, SESCO believes that the delay will not affect other requirements of health care reform which include:

1) Individuals who DO NOT have insurance must purchase individual credible coverage by 2014 or face a penalty in the form of a tax.

2) Employers must still comply with various reporting requirements such as the W-2 employee benefits values and the Summary of Benefits and Coverage.

3) Employers will need to distribute the Notice of the Exchanges to employees by October 1, 2013.

4) Employers must ensure group health coverage complies with the various benefit requirements that have already taken effect (i.e., no cost preventive care, out of network emergency care, no lifetime limits on essential health benefits) and that will take effect in 2014 (i.e., no annual limits on essential health benefits, no pre-existing condition exclusions).

5) Employers with self-funded plans must report and pay PCORI and Transitional Reinsurance Fees to the IRS by July 31, 2013.

6) Employers will still need to reduce their plan's waiting periods to 90 days, which could drive up costs for employers with high employee turnover levels who previously implemented six (6) to twelve (12) month waiting periods

SESCO suggests that employers of all sizes:

1) Provide the facts of the ACA to all employees including the individual mandate requirements. There is a void of facts and communication and we suggest employers fill this void. SESCO can provide suggested communications or provide a consultant to assist.

2) Provide customized employee benefit statements to all employees so they know and appreciate the dollar value of their employer sponsored benefits. SESCO provides this critical service for many clients.

SESCO will continue to monitor any and all changes to the Affordable Care Act (ACA) and notify you as soon as possible. In the meantime, if you have any question or if SESCO can be of assistance with helping determine compliance with the ACA requirements, please contact us at (423) 764-4127 or