Health care reform: new guidance issued

The Departments of Health and Human Services (HHS), Treasury (IRS) and Labor (DOL) have jointly issued new guidance on a variety of topics under the federal Patient Protection and Affordable Care Act (PPACA) (IRS Notice 2012-17 and 77 Fed Reg 8668). Key points include:

• Automatic enrollment: DOL has concluded that it will not be able to issue guidance on PPACA’s automatic enrollment provision by 2014 as previously anticipated, and it reaffirmed its previous position that employers need not comply with automatic enrollment until guidance is issued. 
• Affordability of coverage: IRS confirms that it plans to permit employers to use employees’ Form W-2 wages as a safe harbor in determining the affordability of employer coverage for purposes of the employer “shared responsibility” penalties that go into effect in 2014.
• 90-Day waiting period limitation: IRS plans to issue guidance to address the intersection of the 90-day maximum waiting period limitation (effective 2014) and the employer shared responsibility penalties by providing that employers will not incur a penalty for employees who are uncovered during their up-to 90-day waiting period.
• Definition of full-time employee: IRS will issue guidance on how to determine whether a newly-hired employee is a full-time employee for purposes of the employer shared responsibility penalties. Under certain circumstances, IRS expects to give employers up to six months to determine the full-time status of newly hired employees.
• Summary of Benefits and Coverage (SBC): HHS/IRS/DOL issued a final rule containing the content and distribution requirements for the four-page SBC, which must be provided by carriers and plan administrators. The SBC must first be distributed to participants on the first day of the first open enrollment period that begins on or after September 23, 2012. The final rules also contain a sample SBC template and instructions and illustrations of how to properly complete the SBC. 

Vigilant will update its members as further guidance is issued. If you have questions about health care reform and how it affects your business, contact Kristine Bingman at Vigilant (1-800-733-8621).