With apologies to David Letterman, here are the top 10 Affordable Care Act compliance tasks for employers in 2013:
1. Continue tracking for purposes of reporting the value of health plan coverage provided during 2013 on Form W-2 issued in January 2014 (for employers who issue more than 250 Forms W-2).
2. The maximum reimbursement from a health flexible spending account for plan years beginning on or after January 1, 2013 is $2,500. Make sure employees are aware of any reduction from prior years.
3. An additional Medicare tax of 0.9% must be withheld from the wages of employees making more than $200,000 beginning in 2013.
4. The summary of benefits and coverage ("SBC") must be distributed to eligible employees during the open enrollment period. Any changes to the SBC must generally be distributed at least 60 days before the effective date.
5. The first payment of the Patient-Centered Outcomes Research Institute fee (the "PCORI" fee or the "comparative effectiveness" fee) is due July 31, 2013, regardless of the plan year of the health plan. This fee is $1.00 per covered member (including employees and dependents) for the first year and is reported to the IRS on Form 720. Health insurers will file the form and pay the fee for insured plans; a plan sponsor of a self-insured plan is responsible for filing and payment with respect to any self-insured plan.
6. A notice of availability of the Health Insurance Marketplace (formerly called the Exchange) must be given to current employees on or before October 1, 2013 and to all employees hired on or after October 1, 2013. Model notices are available on the DOL website.
7. The DOL has also published new COBRA model notices. It is unclear when the updated notices must be issued, but it appears to be no earlier than October 1, 2013, as the new COBRA notices refer to the availability of the Health Insurance Marketplace as an alternative to COBRA coverage.
8. Establish the measurement period, administrative period, and stability period for purposes of determining whether employees are "full-time" for purposes of eligibility for the health plan and for purposes of the "pay or play" penalty. For current employees, these periods will start in 2013 for purposes of 2014 eligibility determinations. Determine how and when you will communicate the rules – in the SPD? During open enrollment? As part of the employee handbook?
9. If you are not sure whether your business is a large employer, count the number of full-time employees and full-time equivalents for at least a 6-month period in 2013 to determine if the business has more than 50 full-time/full-time equivalent employees as of January 1, 2014.
10. If you are a large employer and you wish to avoid "pay or play" penalties in 2014, evaluate plan design and employee contributions to determine if the lowest cost option provides minimum value and is affordable. Make sure waiting periods are not longer than 90 days.
Last word of advice: stay on top of continuing developments and be prepared for questions from employees. It is a time of great change and uncertainty for employees as well as employers.