Impacts of the Affordable Care Act on local governments

The Patient Protection Affordable Care Act is requiring significant changes to health coverage provided to employees by local governments and other employers.

Many local government officials and small business owners have asked how the Patient Protection Affordable Care Act effects their local government or business, and the health care coverage they provide for their employees. Brian Cote, of the CIC Benefit Consulting Group, recently spoke to county commissioners at the Michigan Northern Counties Association (MNCA), about this issue. MNCA is a group of 30 counties in northern Lower Michigan that meet monthly for educational programs coordinated by Michigan State University Extension.

The short answer is many changes have taken place. Those who provide health care coverage to employees should learn about the changes, either through independent study, or by consulting their health coverage provider.

Cote pointed out that some of the changes already in effect include: requirements to provide a summary of benefits and coverage before enrollment in a health plan and 60 days before material modifications are made to an existing plan; limits on annual contributions to health flexible spending accounts; reporting of the cost of employer sponsored health coverage by employers issuing 250 or more W-2s; and an increase on the Medicare tax rate of 0.9 percent on earnings over $200,000 for individuals and $250,000 for married couples filing joint returns.

Cote continued by explaining that rules to implement the new law are still being written, and are constantly subject to change. One example is a requirement that employers provide all employees with a written notice about the Health Benefit Exchange and some of the consequences of employees choosing to purchase coverage through the Exchange rather than employer-sponsored coverage. When Cote spoke in early February 2013, this was due to go into effect March 1, 2013 but has now been moved to an effective date later in fall 2013.

Cote also touched on several changes coming in 2014 regarding topics like annual limits, reporting of health insurance coverage to the IRS, employer and individual mandates, waiting period requirements, guaranteed renewability and availability and wellness programs.

Local government boards and other employers need to work with staff and/or consultants to ensure compliance with the many changes occurring to implement the Patient Protection Affordable Care Act. Cote has addressed several local government groups, and will be a keynote speaker at this year’s Michigan Association of Counties legislative conference in March 2013.