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On July 3, 2013, the Obama administration announced a one-year delay in the Patient Protection and Affordable Care Act's (PPACA) employer mandate to provide health coverage to employees or pay a penalty/fee (a.k.a., play or pay).
This delay is designed to meet two goals. First, it will allow time to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.
Further information regarding this delay was issued on July 9, providing guidance on which mandates are being delayed and which are still in effect for Jan. 1, 2014. During this 2014 transition period, the Obama administration is strongly encouraging employers to maintain or expand health coverage.
Budget Impacts of Health Care Reform
As you prepare your budgets, don’t forget that, as employers, cities are going to have additional expenditures in 2014 due to federal health care reform regulations.
HEALTH CARE REFORM TOOLS
Model exchange notice
The health care reform law is requiring employers to deliver an exchange notice to all employees by Oct. 1, 2013. For employees hired after Oct. 1, 2013, the employer must provide the notice within 14 days of the employee’s start date. The notice provides information about the new insurance marketplaces, also known as exchanges. Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan, but who are not employees. If employees have regular access to email (not solely through a kiosk or centralized location), the notice may be distributed electronically. The notice may also be sent via U.S. mail to employees' home addresses, addressed to the attention of the employee (not dependents, or family, etc.).
The federal Department of Health and Human Services (HHS) has model notices for employers who offer coverage and for those who don't.
—View the HHS model notice for employers who offer coverage (pdf)
—View the HHS model notice for employers who do not offer coverage (pdf)
Phone consultation with Gallagher Benefits–deadline extended!
In partnership with Gallagher Benefits, the League is offering and subsidizing a half-hour phone consultation for a limited number of member cities with a Gallagher consultant who specializes in employee benefits and health care reform. Because the employer mandate to provide health coverage to employees has been delayed, this offer has been extended to Jan. 1, 2015, the new effective date of the mandate. This service will be especially helpful for cities that are on the borderline between being a large and small employer. This service is limited to 100 cities. If you would like to take advantage of this free consultation, please contact HR Manager Donyelle Mikacevich at email@example.com or (651) 281-1202. Act fast as this service is limited.
Additional consulting services
The League has also negotiated a reduced rate for cities who may be interested in contracting with Gallagher on an individual basis. In this service, Gallagher will provide answers to individual questions and offer suggestions to cities on how best to comply with Health Care Reform and provide access to Gallagher’s compliance and health care reform newsletters, bulletins, webinars and seminars. The rate for this service is based on population. For cities under 10,000 population, the retainer is $500 a month for a minimum of a three-month commitment or $300 a month for a six-month commitment. For cities over 10,000 population (likely to meet the 100 FTE mark), the rate is $500 a month for a minimum of a six-month commitment.
Gallagher has also developed a financial modeler that will allow cities to calculate the potential cost of health care reform and has the potential to be a helpful tool with workforce planning. This tool is available for purchase by cities who are not currently clients of Gallagher, at a cost of $2,500 which includes a phone consultation to discuss the results. If additional consultation is desired, additional fees may apply.
“MNsure”–New Minnesota Insurance Marketplace
Under federal health care reform, states are required to either create a state “health insurance exchange” or use one supported by the federal Department of Health and Human Services. Minnesota has chosen to create its own exchange, and legislation was signed by Gov. Dayton on March 20, 2013, creating “MNsure,” the new Minnesota Insurance Marketplace.
Read more about MNsure (pdf)
Employer Shared Responsibility Requirements
One of the biggest issues facing cities is determining if they are a large or small employer for purposes of health care reform and how seasonal employees affect that determination. This new document created by Gallagher Benefit Services explains how to account for full-time, part-time and seasonal employees.
View the document (pdf)
Health care reform and the small employer
While most health care reform provisions apply to employers uniformly, regardless of size, there are a few provisions that may benefit small employers. A new document created for the League by Gallagher Benefit Services explains those provisions.
View Health Care Reform Provisions Unique to Small Employers (pdf)
LMC webinar: Preparing and Budgeting for Changes Associated with Federal Health Care Reform
This webinar covers how federal health care reform will impact cities' group health benefits.
Access the presentation slides and recording for this webinar
Health care reform timeline
This timeline, created by Gallagher Benefit Services, shows key changes for employers taking effect over the next few years.
Access the timeline
Health Care Reform FAQs
This is an extensive list of frequently asked questions and answers about health care reform, prepared by Gallagher Benefit Services.
View the FAQs (pdf)
Following are links to additional resources:
Contact Donyelle Mikacevich
(651) 281-1202 or (800) 925-1122
The League has partnered with Gallagher Benefit Services (GBS) to provide cities with timely updates on health care reform. League staff is available for questions related to health care reform compliance (see above).
Contact GBS directly for information about GBS resources, fee structure, and services.
Contact Yvonne Johnson
GBS Area Vice President, Employee Benefits