Health care reform brings new reporting and notification requirements

Beginning in 2015, the Affordable Care Act (ACA) requires employers that offer group health plans to abide by certain notification and reporting requirements. Notification and reporting requirements ask employers to simplify health care information, and requires employers to provide reports and notification to employees for the following health care essentials:

Health care reporting essentials: summary of benefits and coverage

The Summary of Benefits and Coverage is meant to provide a unique summary of the offered benefits plan. The purpose is to simplify the language of the benefits offering, so employees can make sense of the costs and coverage associated with the employer-sponsored plan and easily compare the costs when shopping for other health plans. A summary of benefits and coverage should include a benefit summary, coverage examples, and a glossary with definitions of common medical and insurance terms. This health care reporting and notification requirement should be provided when employees enroll for the first time and at the beginning of each new plan year. Therefore, making it an ongoing process.

This Sample Summary from Healthcare.gov may provide you with a little more insight on what a summary looks like and what information is included in the summary.

Modification of coverage

Employers making changes to their employees’ health plans must notify employees at least 60 days prior to the changes taking effect.

Notice of health insurance marketplace

Employers must notify their employees of the existence of federal and state health insurance exchanges and of their right to purchase insurance through the exchanges. Additionally, employers must offer them information on how to navigate the marketplace. Below are model notices provided by HealthCare.gov:

W-2 Tax Form

Employers must document the cost of group health coverage on each employee’s W-2 tax forms. Employers that file 250 or more W-2s per year are required to report the value of employer-sponsored health coverage. Specifically, Box 12 on the W-2 indicates whether certain health coverages were offered such as medical, dental, or FSAs.

Losing Coverage

Employers must notify employees that if they buy a plan on the exchange, they will lose their employer-sponsored health coverage.

Eligibility for tax credit

If an employer-sponsored health plan does not cover the minimum 60% of health costs, employees must be informed that they may be eligible for a premium tax credit or cost-sharing reduction (if they plan to purchase a different plan on the exchange).

Grandfathered health plans

Employers with eligible grandfathered health plans must include a Statement of Grandfathered Status on all benefits communications so employees are aware that (1) they have a grandfathered plan and (2) that certain provisions of the ACA do not apply to their plan.