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The Affordable Care Act: What Should You Be Doing Now?

Posted 3:20 PM by

Unless you've been living under a rock, you should have at least heard reference to the Patient Protection and Affordable Care Act (PPACA), also sometimes simply referred to as the Affordable Care Act (ACA). The ACA was signed into law in March of 2010 with the intent to decrease the number of uninsured individuals, reduce the cost of health care and create an overall healthier population. Although the entire law is very extensive including thousands of pages of text, there are a few important requirements of employers that began in 2013 that should be noted.  

1. Patient-Centered Research Outcome Institute (PCORI) fees are due July 31, 2013 for plan years that ended on or after 10/1/12.

2.  Reinsurance is a temporary three year fee beginning in 2014 (first payment being due January 2015).

3.  Employers need to determine if their business is a Qualified Small Employer or a Large Employer.

A per capita fee required of insurers and plan sponsors will fund the PCORI. This PCORI fee is charged on plan years ending on or after 10/1/12 and will be $1 per covered life during the fiscal year 2013 and $2 thereafter through 2019. The PCORI fee is due on July 31 of the calendar year following the end of the plan year and will be paid on the IRS Form 720. At this time, Form 720 is not yet updated to report the PCORI fee, but is supposed to be updated in time for the filing deadline.

Proceeds from the reinsurance fees will go to commerical insurers to stabilize premiums in the individual market during the first three years that the state-based exchanges are in effect. This fee will also be a per capita fee for both fully insured and self-funded members. The goal for the temporary three-year fee (2014 - 2016) is to raise $25 billion. It is currently estimated that the fee will range from $60 to $80 per covered life per year.

To know what health insurance requirements there are of an employer, it is imperative that employers know if they are a small employer (fewer than 50 full-time employees) or a large employer (50 or more full-time employees). Large employers are required to offer 95 percent of full-time employees (and their dependents) the opportunity to enroll in health coverage that is "affordable" and provides "minimum value" or will otherwise be subject to penalties. Small employers do not have to provide health insurance to their employees. There are specific considerations that must be given to part-time and seasonal employees when calculating the number of FTEs a company has. 

For more information on the FTE calculation and further definitions of "affordable" coverage and "minimum value" download the presentation

Lisa Curry and Amber Moore of Katz, Sapper & Miller Present the Patient Protection and Affordable Care Act

About the Author
Lisa Curry is a partner in Katz, Sapper & Miller’s Healthcare Resources Group. Lisa works closely with her healthcare clientele to devise and implement tax and accounting strategies to help them minimize tax liability and thoughtfully plan for the future. Connect with her on LinkedIn.

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