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New FAQ's from DOL for You

It wasn’t all about the Summary of Coverage documents last Thursday. The Departments of Labor, HHS and Treasury also issued new guidance on frequently asked questions by employers and health plans concerning the auto-enrollment, employer requirements and waiting periods in PPACA. The agencies have asked for comments on the new guidance, which is due by April 9. NAHU plans to submit a letter on behalf of the whole association, and we also anticipate that our Employers for Flexibility In Health Care coalition will submit detailed comments as well.

For those of you who like who prefer the Cliff Notes version rather than reading the seven detailed questions and their answers, here is a run down of some of the key points made in the document.

  • Don’t worry about auto-enrollment any time soon

”The Department of Labor has concluded that its automatic enrollment guidance will not be ready to take effect by 2014.”

  • What do employers have to do to determining if their coverage is “affordable” or not (a.k.a. whether or not the employee is allowed to drop employer coverage and go seek individual subsidized coverage through a state exchange)?

The document states that “Treasury and the IRS intend to issue proposed regulations or other guidance permitting employers to use an employee’s Form W-2 wages (as reported in Box 1) as a safe harbor in determining the affordability of employer coverage.”

  • What about a look-back/stability period safe harbor for employers?

“It is anticipated that the guidance will allow look-back and stability periods not exceeding 12 months.”

  • If you were wondering how and when you are supposed to decide if an employee is full-time or not

“Treasury and the IRS intend to propose an approach under which the period of time that an employer will have to determine whether a newly-hired employee is a full-time employee (within the meaning of section 4980H) will depend upon whether, based on the facts and circumstances, (a) the employee is reasonably expected as of the time of hire to work an average of 30 or more hours per week on an annual basis and (b) the employee’s first three months of employment are reasonably viewed, as of the end of that period, as representative of the average hours the employee is expected to work on an annual basis.”

  • Employers are not required to offer coverage to part-time employees.
  • When does the benefit waiting period clock begin to tick?

“The 90-day waiting period begins when an employee is otherwise eligible for coverage under the terms of the group health plan.”

  • What is the interaction between 90-day wait periods and employer penalties?

“The upcoming guidance is expected to provide that, at least for the first three months following an employee’s date of hire, an employer that sponsors a group health plan will not, by reason of failing to offer coverage to the employee under its plan during that three-month period, be subject to the employer responsibility payment under Code section 4980H

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