The health reform law has been in place long enough for employers’ compliance efforts to lose some steam. But complacency is leaving many firms wide open to problems.
Some of the health plan strategies employers have been using will hurt their ability to comply with the Affordable Care Act (ACA) moving forward.
The Kaiser Family Foundation recently listed some of the top ACA-compliance problems that can sneak up on employers.
The top three:
1. Grandfathered status loss
As HR pros are well aware, grandfathered health plans are exempt from more than a dozen of the major health reform rules, including the prohibition on annual and lifetime dollar limits on coverage, as well as the essential health benefits rules.
But here’s the problem: It’s very easy for previously grandfathered plans to have changed enough to comprise their grandfathered status.
In fact, the Kaiser research found that just 37% of companies still have a grandfathered health plan. That’s a significant decline from the 72% of employers that had at least one grandfathered plan back in 2011.
(Note: If you want to see if your plan is in danger of losing its grandfathered status, check out this eight-factor list.)
2. Extended waiting periods
As of 2014, non-grandfathered health plans are prohibited from making eligible employees wait longer than 90 days for insurance coverage.
However, the report found that more than a quarter (27%) of covered employees face a waiting period of three months or longer. And 4% of workers have a waiting period of four months or longer. That is unacceptable unless coupled with a bona fide “orientation period.”
There has been some confusion about waiting period calculations.
Remember: Employers must count all days — including weekends and holidays — when it comes to calculating the 90 days.
3. Wellness carrots (or sticks)
Another area where employers’ healthcare strategies can get them in trouble: wellness.
According to Kaiser’s research, 19% of employers offer lower premiums, reduced cost sharing or higher health reimbursement account or health savings account contributions to wellness plan participants.
But when employers roll out overly generous incentives (or harsh penalties) they could find themselves in trouble.
The maximum premium reduction/penalty under the ACA is 30% of the value of single-employee coverage — except for non-smoker incentives, which max out at 50%.