Affordable Care Act – New Requirements in the New Year

Happy New Year from all of us at Resourceful HR!

As with any new year, changes will abound. One of which is the Affordable Care Act (ACA), and we are encouraging our clients to plan for these changes now. A number of the ACA’s provisions have already gone into effect, and these provisions will stay in effect as a result of the Supreme Court’s decision in June 2012. For example, the law already requires that plans offer extended coverage for adult children up to age 26; prohibits pre-existing condition limitations on coverage for plan participants under the age of 19; and prohibits retroactive rescission of coverage and lifetime dollar limits for essential health benefits.

Many additional rules and requirements are scheduled to go into effect over the course of the next few years so you will want to continue to stay up to date. As part of our commitment to you and our clients we will be sharing resources and information on our blog so you can learn more. We recently had the opportunity to talk with Lauren Burgon at Equinox Business Law Group and she shared that while definitions of affordable and qualified care continue to fluctuate and requirements are impacted accordingly, employers will want to take into consideration the following:

  1. Increased Medicare Tax Withholding for Employees Earning Over $200,000. Starting on January 1, 2013, employers must withhold an additional 0.9% of the wages of individuals who earn more than $200,000 per year. This will increase the total Medicare tax withholding for those employees from 1.45% to 2.35%. Employers should promptly inform payroll staff about the upcoming changes, and coordinate with any third-party payroll processors, to ensure that withholding is properly adjusted for affected employees starting on January 1, 2013.
  2. W-2 Reporting: Employers need to report on employees’ 2012 W-2 forms – to be issued in January 2013 – the aggregate cost of their employer-sponsored coverage. Employers, however, may have chosen to report earlier on employees’ 2011 W-2 forms issued in January 2012. Employers who filed fewer than 250 W-2s in 2011 are exempt from reporting health care costs on W-2s.
  3. Health FSA payroll deductions will be limited to $2,500 starting January 1, 2013. However, this new requirement does not limit the amount an organization can contribute to an employee’s health FSA through a matching or contribution program.
  4. Employers will need to monitor the roll out of the WA State exchange, which is being created to facilitate employees’ ability to monitor their plan and personal costs. Learn more about the exchange here.
  5. Starting on Jan. 1, 2014, employers with more than 50 full-time equivalent employees must either provide health care coverage for their full-time workers or pay a penalty.
  6. As we continue to add helpful HR tips, content and information to our email blasts, blog and website, we hope to hear from you! Let us know what you would like to see more of, what you would like to see less of and most importantly how we can help you be successful when it comes to HR. In 2012 we had the opportunity to roll out our new line of business – HR Temp Staffing. We also have been working closely with organizations to help with their HR outsourcing and recruiting needs. You will hear more from us on these topics and look forward to serving your needs in 2013!

    All our best for a successful New Year!

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"My professional passion stems from a fascination with how the individual needs of employees, managers, and the business converge to produce an outcome. I’m driven by a desire to help leaders and employees find the balance between competing needs so they can work together to address the challenges they face."