The White House
Administration announced on July 2, 2013, that they would be delaying the
Employer Mandate portion of Healthcare Reform legislation until 2015. The
Employer Mandate requires employers with 50 or more full-time or full-time
equivalent employees to offer a health insurance plan to employees that is
affordable and meets the minimum actuarial value established by the Federal
government. Employers that do not comply with this regulation will be
subject to fines and penalties. A key component of the regulation is
additional reporting requirements to the government by employers. The
government has acknowledged the complexity of these reporting requirements for
employers and has decided to delay the implementation for one year. The government
hopes to provide employers with further guidance sometime this summer. This
announcement leaves unchanged other provisions of the law such as the
individual mandate which requires most Americans to carry health
insurance. Employees will still be allowed to buy their own health
insurance through a state exchange; with the only change being that their
employers won't be penalized next year if they do so.
Another important ruling was
handed down by the U.S. Supreme Court on June 26, 2013. This ruling identifies
Section 3 of the Defense of Marriage Act to be unconstitutional. Section
3 did not permit the marriage between two individuals of the same gender.
Same-sex marriages were recognized as legal
by 12 states and the District of Columbia at the
time of the ruling. The decision does not force same-sex marriage on the
states, which choose not to recognize same-sex marriage. The
impact of the ruling on employee benefit plans is significant.
For employer’s who operate in
a state that currently allows or acknowledges same sex marriage, the following
rules will apply.
- Employers who offer a
benefits program must not discriminate between spouses of the same sex or
spouses of the opposite sex in regards to the benefits that are
offered. Spouses of the same sex are now entitled to the same
benefits.
- Employees and their
spouse who participate in their company’s Section 125 plan are now
eligible to receive their spouse’s contribution on a pre-tax basis.
- Employers will now be
responsible to offer continuation of coverage (COBRA) to an eligible
spouse.
- The same sex spouse will
also now be entitled to their partner’s 401(k) benefit if he or she should
happen to pass away.
- Employees must be
permitted to take family and medical leave to care for an ill
same-sex spouse.
The healthcare and benefits
industry will be constantly changing over the next several months. To
make sure your company is up to date with the latest rulings and regulations,
please visit our Best Bottom Line
articles for the most up to date information. Please feel free to contact
our office as well with any questions regarding these two significant
announcements.
Thank you.
