Doctrine of No Surprise

I think everyone knows what is on top of most of our plan sponsors’ minds, and it is the Affordable Care Act (ACA). People are trying to distill down the important parts of the Affordable Care Act and how it is going to affect their organizations and their plans so that they can make wise decisions in terms of cost containment as well as take advantage of opportunities and avoiding the pitfalls that are part of each organization’s assessment of the Affordable Care Act. Plan sponsors need to know the right questions they should be asking. It is important for plan sponsors to ask the right questions because the answers are going to impact their organization at a corporate level. These answers are also going to affect employees as well. It is critical that people ask the right questions and get the right information so that there are no surprises relative to the Affordable Care Act going forward for their companies.

Relative to the Affordable Care Act, plan sponsors should ask at least three major questions.

  • The first question is, “What is the makeup of our workforce?” It is really important to understand the makeup of employees who work part-time, variable hours and seasonally. It is also important to keep outside labor or contractors in mind. Plan sponsors should take a look at current labor situations under a magnifying glass.
  • Plan sponsors should also ask, “Are our plan documents compliant with ACA in terms of eligibility provisions? Do we meet the 90-day requirement in terms of covering people? Do we have the numbers of hours correct in terms of meeting the 30-hour a week minimum? It is crucial for sponsors to look at the plan documents to see if there are any discrepancies between their current documents and what ACA requires.
  • Lastly, it is called The Affordable Care Act for a reason. Employees need to assess, “Are our plans affordable in terms of meeting the 9 ½ percent of contribution requirement?” There are some safe harbor rules with regard to the contribution requirement, but it is important to meet at least one of those safe harbors. Larger employers need to ensure plans are of minimum value, and small employers must offer the essential health benefit.