Employer Coverage Requirements

One goal of the Affordable Care Act (ACA) is to reduce the number of uninsured people in the U.S. and promote employer-sponsored health care benefits. ACA uses several techniques to achieve this objective.

Beginning in 2014, larger employers (50 or more full-time employees) face penalties (generally $2,000 per employee) if they do not offer minimum essential coverage to their employees and dependents and any of their employees receive a subsidy to obtain coverage through a health care exchange. These employers also face penalties if the coverage they offer is considered unaffordable as specified by the law.

The ACA originally required employers that offer coverage and pay a part of the cost of coverage to offer free choice vouchers to certain low-income employees beginning in 2014. The vouchers, equal to the employer contribution for coverage, would allow these employees to purchase coverage through a health care exchange. This provision was repealed in 2011 as a part of the Appropriations Act.

Government Resources
 Analysis

Government Resources 

On June 16, the International Foundation submitted a letter to the IRS regarding Notice 2011-36, explaining some situations forthcoming regulations should address in order to enable a smoother implementation for groups participating in a multiemployer health and welfare plan.

The Treasury and the IRS have issued Notice 2012-31, which provides information and requests public comment on an approach to determining whether an eligible employer-sponsored health plan provides minimum value. Starting in 2014, whether such a plan provides minimum value will be relevant to eligibility for the premium tax credit and application of the employer shared responsibility payment. Comments may be submitted in writing on or before June 11, 2012. 4/26/12 (New) 

The Treasury and the IRS have issued Notices 2012-32 and 2012-33, which invite comments to help inform the development of guidance on annual information reporting related to health insurance coverage. The information reporting is to be provided by health insurance issuers, certain employers that sponsor self-insured plans, government agencies and certain other parties that provide health insurance coverage. Comments are due on or before June 11, 2012. 4/26/12 (New) 

HHS has issued a bulletin to request comment from the public on a proposed interim strategy and potential regulatory approach for verification of an applicant’s access to qualifying coverage in an employer-sponsored plan under section 1411 of the Affordable Care Act. 4/26/12 (New) 

HHS has released a bulletin, Actuarial Value and Cost-Sharing Reductions Bulletin, to provide information and solicit comments (until on the regulatory approach that the HHS plans to propose to define actuarial value (AV) for qualified health plans (QHPs) and other non-grandfathered coverage in the individual and small group markets under section 1302(d)(2) of the Affordable Care Act as well as to implement cost-sharing reductions under section 1402 of the Affordable Care Act. 2/24/12

The IRS has released a proposed affordability safe harbor for employers under the shared responsibility provisions included in the Affordable Care Act that will apply to certain employers starting in 2014. Notice 2011-73 solicits public input and comment on a proposed safe harbor, designed to make it easier for employers to determine whether the health coverage they offer is affordable. To that end, Treasury and IRS expect to propose a safe harbor permitting employers that offer coverage to their employees to measure the affordability of that coverage by using wages that the employer paid to an employee, instead of the employee’s household income. This contemplated safe harbor would only apply for purposes of the employer shared responsibility provision, and would not affect employees’ eligibility for health insurance premium tax credits. Public comments may be submitted on or before December 13, 2011.   

 
The IRS released a notice requesting public comment on issues related to the employer responsibility to provide health coverage under ACA starting 2014. Specifically, the notice outlines possible approaches employers could use to determine who is a full-time employee and issues related to the 90-day limit for waiting periods. The deadline for public comments is June 17, 2011. 


Analysis