What do all of these acronyms stand for and why do employers
and human resource professionals care? These acronyms stand for statutory
requirements which apply to employer-provided health plans and stiff penalties
can apply for failure to comply with a multitude of coverage, administration,
reporting and disclosure requirements. Employers could be faced with a penalty
of $100 per individual per day for refusing to offer mid-year elections for
HIPAA special enrollment events or for violating comparable contribution
requirements to Health Savings Accounts (HSAs). For example, although COBRA has
been around for almost three decades and excise taxes have always applied to
COBRA violations, employers are now required to self-report COBRA violations on
new IRS Form 8928 and pay the associated excise taxes. The excise tax for
failure to offer COBRA coverage to eligible individuals can be as much as $100
per day per individual during the noncompliance period.
The Affordable Care Act (ACA), commonly referred to as
Obamacare, also carries with it a whole host of penalties for non-compliance.
Although the federal government postponed until 2015 the mandate which requires
large employers (employers with more than 50 employees) to offer affordable
coverage to full-time employees and their dependents, many requirements are
effective NOW. And these requirements apply to all employers, not just
large employers. Failure to comply with the following current requirements
can trigger an excise tax of $100 per individual per day:
- Maximum 90-day waiting
period
- No pre-existing condition
exclusions
- No annual or lifetime
limits on essential health benefits
- Coverage for dependents up
to age 26
- No cost-sharing or deductibles
for preventive care
- Maximum out of pocket
limits
- Summary of Benefits and
Coverage (SBC)
- Claims and appeals
procedures
With so many rules and regulations, employers and their human resource professionals should be busy developing and monitoring procedures to ensure compliance and to avoid violations. Government agencies are also busy issuing clarifying guidance, new regulations and IRS reporting forms. More guidance is expected regarding ACA compliance, especially reporting requirements and nondiscrimination rules. One thing is certain: There will be increased enforcement in the coming years by government agencies such as the IRS and the Department of Labor to target compliance failures and to collect applicable penalties and excise taxes.
