Delays, delays, and more delays. That seems to be the trend this year as concerns mount about how to implement components of the Affordable Care Act (ACA), commonly called Obamacare or the Health Care Act. The White House has reacted to what’s being touted as a series of “operational challenges” by extending deadlines for coverage and offering simplified reporting requirements.
One of the first concerns involves the Small Business Health Insurance Exchange (SHOP). Under the old rules, SHOP exchanges were to be in place by January 1, 2014, with small employers offering open enrollment on October 1, 2013. Small employers are defined under the rules as those with up to 100 employees; states will eventually be able to make changes to the eligibility criteria including limiting participation to businesses with 50 or fewer employees in 2014 and 2015. Individuals and the self-employed are also able to participate in the exchanges.
The exchange, as initially conceived, would offer individual options based on the level of benefits. The idea is that more options and more choice would equal more affordable coverage. To further encourage participation in the exchanges, federal tax credits may be available for small businesses with fewer than 25 employees who buy health care coverage through the exchanges.
Despite the push, not all states have signed on to the idea of exchanges. The lack of enthusiasm has been exacerbated by a lack of choice. For now, there is only one plan option available under the exchanges and the complete price of that option is still unknown. What that means, realistically, is that many small businesses will likely continue offering their current plan options for an additional year – or not offer coverage at all. Finding affordable health care coverage for employees has become more of a challenge as costs have skyrocketed. Not surprisingly, those pushing for the delay in the choice option include insurers like Aetna, who now claim, three years after the bill was passed that “employee choice models are extremely cumbersome to establish and operate.”
With that controversy still fresh, the White House today announced another delay in the Health Care Act, this one affecting large businesses – those with more than 50 employees. This delay, however, is definitely more favorable to the employer: large businesses won’t have to offer proof of coverage for 2014. In simple terms, reporting requirements – many of which have been criticized as far too burdensome for employers – for health care benefits have been suspended for 2014. Those reporting requirements included employee and benefits information to be reported to the Internal Revenue Service (including the cost of health care benefits provided to employees noted on your form W-2). Since reporting has been suspended, that necessarily means that related employer penalties will not apply for 2014.
These two delays, while offering a bit of relief for employers concerned about how to comply with new reporting requirements and health care mandates, are concerning for proponents of ACA. Delays in implementation of ACA and complaints from businesses about the complexity of the new law have plagued the administration since the health care was signed into law in 2010. Most recently, Congress and the public have expressed reservations about the IRS’ ability – in the midst of a number of scandals – to administer the provisions of the law. Even those who initially supported the law have expressed concerns, with Sen. Max Baucus (D-MT), one of the authors of the original Health Care Act, referring to it this spring as a “train wreck.”
