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Health Care Reform 102

Jason Lacey, a Foulston Siefkin LLP partner who advises employers in the area of employee benefits, presented a seminar titled “Health Care Reform 102” to HR professionals and business managers on August 18 and August 23 in Wichita.  The workshop explored in detail two of the more-troubling aspects of health care reform law for employers:  (1) the new rules prohibiting discrimination in insured health plans, and (2) the new play-or-pay penalties that will impact many employers beginning in 2014. 

The nondiscrimination rules prohibit employers with insured health plans from discriminating in favor of highly compensated employees as to either eligibility or benefits.  These rules require employers that offer an insured health plan to make it broadly available to employees and to provide all covered employees with the same benefits.  “Every organization will have at least one highly compensated employee for purposes of these rules,” Lacey said, "so employers cannot assume they are exempt from the rules just because they are small or do not have highly paid employees."  The rules are technically effective now, although the IRS is not enforcing the requirements until further guidance is provided.  That guidance could be issued any time and is expected no later than 2014.  Once enforcement begins, employers that fail to comply will risk exposure to a steep penalty of $100 per day for each individual who is discriminated against.
The play-or-pay penalties that begin in 2014 are the primary mechanism in the health care reform law that prod employers to either offer broad-based, affordable health insurance coverage to their full-time employees or pay a penalty.  (Beginning in 2014, employees who are not offered broad-based, affordable coverage through their employers will have the option of purchasing that coverage through a state insurance exchange and perhaps qualifying for a tax credit that will offset much of the premium cost.)  The employer penalty regime applies only to “applicable large employers,” meaning employers with an average of 50 or more full-time employees. 
In addition to the nondiscrimination and penalty rules, the workshop addressed some nuances under the rules regarding coverage of dependent children to age 26.  Lacey also touched on recent guidance regarding the uniform summary of benefits and coverage that must be distributed to employees beginning in 2012 and the expanded standards on preventive care services for women that will require plans to cover women’s contraception without cost beginning in 2013.
If you have questions or need assistance regarding the provision of employee benefits, you can contact Jason Lacey at jlacey@foulston.com or (316) 291-9756. 

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Don Berner, the Labor Law, OSHA, & Immigration Law Guy
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Boyd Byers, the General Employment Law Guy
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Jason Lacey, the Employee Benefits Guy
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