It’s been some time since we shared the latest updates on the Affordable Care Act (ACA), which seems to change every week! Here are a few of the most important updates:
1- First and foremost, the implementation of the 40% excise tax has been delayed until 2020.
Some people call the excise tax the “Cadillac tax” so it sounds like it’s a tax solely on super rich benefits, but actually it’s a tax on working peoples’ “Chevrolet” health plans. This change means collective bargaining does not have to consist of cutting benefits and raising employee contributions because of unnecessary fear-mongering about this tax on premiums over $10,200 annually for an individual and $27,500 for a family. Everyone can breathe a sigh of relief, get on with the hard work of maintaining good benefits while reducing costs, without being in panic mode. We should note that kicking the can down the road this way is the death knell for this tax—it may be Congress’ way of preventing implementation of this cap on the cost of health benefits.
2- The regulations of new pilot “wrap around” plans are being implemented across the land.
These regulations allow employers to use pre-tax dollars to provide supplemental benefits, like dental and vision benefits, for workers who are getting health benefits at Exchanges/Marketplaces. Employers can use those pre-tax dollars for part-timers, temporaries, seasonal workers, variable employees, and others even though these workers are getting tax credits at the Exchanges/Marketplaces.
3- New regulations have issued concerning the use of Health Reimbursement Accounts (HRAs).
We will not detail the new regulations here because they are complex and specific. If you use, or are contemplating using, HRAs with a High Deductible Health Plan (HDHP), you should consult with experts so it is done right.
4- Weinberg Roger & Rosenfeld brings groundbreaking lawsuit.
Now, having saved the best part for last, what journalists call “burying the lead story,” our office has filed a suit in Federal Court in Colorado. This lawsuit claims that an employer who consistently terminates employees before they reach their 90th day of employment to avoid providing ACA-mandated health benefits is violating ERISA Section 510, which says an employer cannot discriminate against an employee as a way to deny them benefits. Stay tuned. We will bring you a full description and update on this groundbreaking case soon—it seems to be the first of its kind in the nation, in an area in which we really need judicial action.
By Bill Sokol | January 20, 2016