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April 20, 2013

Healthcare Law Deadlines in Place, Coming Up — and Delayed

By now, most people have heard about the provision in the Affordable Care Act (ACA) that may impose a penalty on employers who don’t provide health insurance to their employees, beginning January 1, 2014. But the ACA has numerous other health plan provisions and deadlines that employers must be concerned about. Below are just three, along with the deadlines attached to them.

Kicked in January 1, 2013:  New $2,500 Cap on Healthcare FSA Contributions

Before 2013, there was no tax-law limit on salary-reduction contributions to an employer healthcare FSA (although many plans imposed their own annual limits).

Starting in 2013, the maximum annual FSA contribution by an employee is capped at $2,500. After that, the cap will be indexed for inflation.

Coming January 1, 2014:  Group Health Plan Waiting Period Cannot Be More than 90 Days

Under the ACA, beginning January 1, 2014, a group health plan or health insurance issuer offering group health coverage cannot apply any waiting period that exceeds 90 days. A waiting period is defined as the period that must pass before an individual is eligible to be covered for benefits under the plan. The U.S. Health and Human Services Department, the IRS and the Employee Benefits Security Administration recently published proposed guidance on how to administer the rules.

The guidance states that all calendar days are counted beginning on the enrollment date, including weekends and holidays. If the 91st day is a weekend or holiday, the plan or issuer may choose to permit coverage to become effective earlier than the 91st day, for administrative convenience.

An example from the guidance: A group health plan provides that full-time employees are eligible for coverage under the plan. An individual begins work as a full-time employee on January 19. In this case, any waiting period for the employee would begin on January 19 and could not exceed 90 days. Coverage under the plan must become effective no later than April 19 (assuming February lasts 28 days).

Delayed until January 1, 2015:  The Small Business Health Options Program

The Small Business Health Options Program, (SHOP) was originally scheduled to provide small employers (defined as fewer than 100 employees) with a marketplace that offers them a variety of health plans beginning on January 1, 2014. Now, the U.S. Department of Health and Human Resources has stated the program will be delayed until 2015. During 2014, employers in most states will be limited to one plan.

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