Complexities of the Affordable Care Act: impacts of healthcare reform on employers.

• Author: McCurry, Ron
• Position: INSURANCE

The Patient Protection and Affordable Care Act (PPACA), often referred to as Obamacare, was signed into law on March 23, 2010. The law's intention is to overhaul the US healthcare system and affects nearly all taxpayers and employers.

The legislation contains a host of tax changes, many of which are both complex and novel. The law will significantly change the way health insurance is sold, purchased, and delivered in the United States. The primary goal of the law is to help millions of Americans obtain health insurance coverage. It is supposed to provide new coverage options, give consumers the tools they need to make informed decisions about their health care coverage, and put in place strong consumer protection.

At its core PPACA is broad and complex legislation, and has not been well communicated to employers or individuals who will be impacted. Confusion seems to reign supreme. Employers and individuals would be well advised to seek out advisors and consultants who are well versed in the requirements of the Act.

Although PPACA was signed into law in 2010, only some of the requirements are in place. Other requirements will take effect between 2014 and 2018. The requirements seem to he subject to change and I will predicate what I say with "as we know it today."

Already in Place

As we approach 2014 there are some things employers and individuals should already be doing.

For employers:

* Group plans should have been amended to reflect that dependent children can be covered on their parent's plan up to the age of twenty-six.

* There can be no pre-existing conditions applied to individuals nineteen and younger.

* Employers should be distributing the required Summary of Benefits and Coverage (SBC) during annual enrollment and to new hires.

* Reporting health coverage value on the Form W2.

* Managing any required distribution of Medical Loss Ratio refunds (this applies only to fully insured plans).

* Employers should have changed their Section 125 Flexible Spending Accounts to reflect new limits ($2,500 maximum per family).

* For the tax years beginning after December 31, 2012, employers need to be withholding a 0.9 percent hospital insurance tax, a new component of FICA/Medicare payroll tax. This requirement applies to high-earning workers and self-employed taxpayers making in excess of $250,000 for joint returns, $125,000 for married taxpayers filing separate returns, and $200,000 in all other cases. The additional 0.9 percent HI tax applies...