NEW YORK—The Affordable Care Act (ACA) has been in effect for almost five years now with no expectation of significant changes to the law. Pieces of the law will continue to be rolled out through 2020, so there still are several important issues for employers to consider going forward. These include complying with the employer mandate, reporting requirements and the upcoming “Cadillac tax.”

The employer mandate requires large employers to offer minimum essential coverage to full-time employees or risk penalties. It became effective in 2015 for employers with 100 or more employees. And beginning in 2016, employers with 50 or more employees will have to comply with the mandate.

Among the questions for employers to consider regarding the employer mandate are the following:

• Are you a large employer for purposes of the employer mandate?
• How are you tracking employee status?
• Are you at risk of any penalties?
• Do you need (or want) to take any action to eliminate or reduce penalties?
• Are you making any changes to your work force (such as eliminating workers), and are there potential legal ramifications for doing so?

Beginning in 2016, employers will face new reporting requirements under the ACA and be penalized if they fail to comply. Two types of reporting will be required: Section 6055 reporting and Section 6056 reporting.

The reports will contain coverage information from 2015. Any employer (small or large) that offers employee coverage will be required to report under Section 6055 about who is covered under the plan. Large employers, including those that do not offer coverage, will be required to report under Section 6056 about who was offered coverage and other information about coverage and costs.

In addition to the questions noted above, employers should consider the following questions regarding the upcoming reporting requirements:

• Are you subject to any reporting requirements?
• Are you familiar with the reporting forms and instructions?
• Are you (and how are you) tracking data that needs to be reported?
• Who will do the reporting? Will you outsource that function?

While it is a few years into the future, starting in 2018, employers that provide high-cost health plans will be subject to the ACA’s so called Cadillac tax, a substantial 40 percent excise tax on health coverage benefits exceeding an estimated $10,200 for single coverage and an estimated $27,500 for family coverage. With this in mind, it is recommended that employers should consider the following questions:

• If the Cadillac tax were in effect today, would our company be subject to an excise tax?
• Does our company want to change our employee contribution structures, such as contribution tiers?
• Do we want to consider increasing out-of-pocket costs to employees to reduce the value of coverage?
• Are we going to eliminate or change flexible savings account, health reimbursement arrangement or health savings account contributions or other benefits?

We hope that this information, and information that will be forthcoming in Vision Monday, will continue to keep you abreast of ACA questions and prospective actions you can take to ensure full compliance with the law. As always, do continue to have an ongoing dialogue with your insurance carrier and your insurance broker.

Hedley Lawson, Contributing Editor
Managing Partner
Aligned Growth Partners, LLC
(707) 217-0979
hlawson@alignedgrowth.com
www.alignedgrowth.com