Terms for 'ACA coverage rules for employers'?

Question:

Coming at this cold; not sure what to make of all the ACA information I’m finding.

Our insurance company talks about “shared responsibility provisions.” Our ERISA lawyer talks about “4980H rules.” Vendors talk about “play or pay.” My predecessor’s hand-off notes talk about “the employer mandate.”

I know this is a big law. What am I missing?

Answer:

You’re not missing anything if you remember that every one of these terms refers to the same thing:

  • Coverage rules about how an employer subject to the ACA can be compliant.

declunkifying-terms-for-aca-compliance_acainsights.org“Shared responsibility provisions” is the IRS’s umbrella term for ACA coverage requirements, both for employers and individuals. “Employer shared responsibility provisions” appears in the IRS code; “individual shared responsibility provision” appears in the instructions for Line 61 on a 1040 form.

4980H” is the section in the IRS code where the coverage rules for employers sit.

“Play or pay” is the business world’s commonly used phrase for the ACA’s if-then compliance options. For employers, “play” means direct compliance with the spirit of the law – offering health benefits as required, thereby avoiding an IRS fine. And “pay”means indirect compliance with the spirit of the law – accepting an IRS fine for not offering health benefits as required.

“ACA employer mandate” is not, as many fear, an IRS term.

  • It’s the business world’s term for the federal government saying that employers of a certain size can either offer health coverage of a certain standard to full-time employees or pay into a public fund that helps subsidize coverage for those who enroll through an exchange and are found in need of assistance.

 

This Q&A was first published by ACA Insights' Helen Karakoudas on September 28, 2016 in a LinkedIn Pulse article titled "In the world of ACA compliance, every day should be Ask a Stupid Question Day."