Post­ed by Danielle Capilla

ChangesAheadBegin­ning in 2015, under the Patient Pro­tec­tion and Afford­able Care Act (ACA), large employ­ers must offer afford­able, min­i­mum val­ue cov­er­age to their full-time employ­ees or poten­tial­ly pay a penal­ty. Some com­pa­nies have or had been mar­ket­ing a plan that they state sat­is­fies the min­i­mum val­ue require­ment (an actu­ar­i­al val­ue of 60 per­cent), based upon a cal­cu­la­tor pro­vid­ed by the Depart­ment of Health and Human Ser­vices (HHS), even though the plan does not cov­er inpa­tient hos­pi­tal charges. New infor­ma­tion pro­vid­ed by the IRS and HHS in 2014 and recent­ly in 2015 should be con­sid­ered as employ­ers review their ben­e­fit offerings.

What’s the prac­ti­cal impact? Employ­ers that are sub­ject to play or pay require­ments of pro­vid­ing min­i­mum essen­tial and afford­able, min­i­mum val­ue cov­er­age should ensure that the plans they are offer­ing pro­vide sub­stan­tial cov­er­age of inpa­tient hos­pi­tal­iza­tion and physi­cian ser­vices. If they do not, their employ­ees will be eli­gi­ble for a pre­mi­um tax cred­it to sub­si­dize the cost of health insurance.

An employ­ee who was offered an employ­er plan that was min­i­mum essen­tial, afford­able cov­er­age, and offered (in addi­tion to meet­ing actu­ar­i­al val­ue stan­dards) sub­stan­tial inpa­tient and physi­cian ser­vices, would not be eli­gi­ble for the pre­mi­um tax cred­it if the accept­able employ­er cov­er­age began on or after Novem­ber 3, 2014.

Employ­ers who offer afford­able, min­i­mum essen­tial cov­er­age that meets actu­ar­i­al val­ue but does not offer sub­stan­tial inpa­tient and physi­cian ser­vices will be sub­ject to the play or pay penal­ty for plan years begin­ning on or after March 1, 2015, unless they meet the excep­tion require­ments relat­ing to the inpa­tient and physi­cian services.

For a com­plete review of the changes, includ­ing when the excep­tion can be used and the most recent 2015 changes, down­load UBA’s ACA Advi­sor, “IRS Pro­pos­es Min­i­mum Val­ue Rule Change to Mesh IRS and HHS Rules”.

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