Q: What health care reform mandates go into effect in 2013?
A: Employers must be aware of key mandates going into effect this year:
- Effective January 1, 2013, employees’ pre-tax contributions to a Health Flexible Spending Account (FSA) must be limited to $2,500.
- Insured and self-insured plans must provide a Summary of Benefits Coverage (SBC) of medical coverage to all eligible employees for open enrollment periods that began after September 23, 2012.
- Non-grandfathered health plans must cover specific preventative care services for women without cost-sharing requirements.
- Health insurers and self-funded plans must pay $1 per covered employee per year to support the Patient Centered Research Institute.
- Employers must report to employees on Form W-2 the cost of their employer-provided group health plan coverage that was paid in 2012.
- A 0.9% increase in the Medicare tax rate for high-income individuals earning over $200,000 annually.
- As of March 1, 2013, employers must provide all new hires and current employees with a written notice about Exchanges.
Q: How can my organization prepare this year for the provisions that will go into effect in 2014?
A: In 2014, the “Pay or Play” mandate will go into effect. Essentially, employers will be required to offer qualified health coverage to all employees working 30 or more hours per week or pay a penalty. In 2013, employers should begin strategic planning to understand and address any potential employer penalties. To help you evaluate your options, The Graham Company invested in a Health Care Reform Pay or Pay Calculator, a comprehensive modeling tool that can tell you if your organization’s current coverage is considered affordable or if it provides minimum value and the amount of potential penalties that may be triggered. Using the tool, we can determine how much you could be required to pay in penalty taxes as well as model changes that may protect you from being assessed fines.