IRS closes key ACA loophole—One of 3 things you need to know this week in employee benefits

IRS change to ACA minimum value standard clears way for more employees to qualify for exchange subsidies

The Internal Revenue Service recently announced that employer health benefit plans that don’t cover inpatient hospitalization won’t meet the minimum value threshold set by the Affordable Care Act.

The agency, in collaboration with the Treasury and Health and Human Services Departments, aims to finalize rules to that effect next year, according to the latest notice. With the announcement, the IRS closes a loophole that allowed insurers to use a faulty HHS calculator to meet the minimum value standard—calculated at 60% actuarial value—without covering inpatient hospitalization.

Employer plans that don’t provide benefits for inpatient care still can meet the minimum essential coverage threshold under ACA. However, because the plans will fall below the minimum value threshold, employees under such plans now will qualify to receive ACA subsidies to purchase health plans through a public exchange.

According to the notice, the IRS will waive employer mandate penalties for companies that have enrolled or are enrolling employees in plans without inpatient coverage. Also, those employers must not “state or imply” that employees may not receive an exchange subsidy, the magazine reports. The penalty waiver applies to plans with enrollment as of November 3, 2014, for plan years beginning on or before March 1, 2015.

EEOC targets employers in string of lawsuits over wellness programs

The Equal Employment Opportunities Commission (EEOC) has sued four employers in as many months, alleging that the companies’ wellness programs are discriminatory, unlawfully coercive, and/or violate federal employment laws—including Health Insurance Portability and Accountability Act, Americans with Disabilities Act, Genetic Information Nondisclosure Act, and Civil Rights Act.

Clearly, there is a disconnect within the federal government: While the White House and Health Department are pushing employers to take advantage of expanded wellness program incentives under the Affordable Care Act, the EEOC is suing employers over said incentives/disincentives in these programs.

According to the National Business Group on Health, 95% of employers sponsor a wellness program, and many of those feature a health risk assessment, biometric screening or both. However, it’s those program elements—biometric screenings in particular—that have proved troublesome for employers when it comes to avoiding the EEOC’s wrath.

In its lawsuit against Honeywell, the EEOC went so far as to petition a U.S. District Court to for a temporary restraining order to block the company’s surcharges for non-participation in wellness activities. Although the request was denied, it illustrates the agency’s commitment to fighting against required screenings.

Read more about the legal action, and tips to guard your wellness program against it in editorial director Kelley Butler’s column in the January 2015 edition of Workforce magazine.

This week’s hidden gem: Employees fear the retirement reaper

A new survey from Wells Fargo shows a quarter of all middle-class Americans say they “get depressed” when thinking about their financial life in retirement, and 22% would rather “die early” than not have enough money to live comfortably in retirement.

To avoid an early grave, however, a third say they’ll need to work until they are at least 80 to make up for their lack of retirement savings.

Still, despite their morbid preference, nearly one in five (19%) admit they have nothing at all saved for retirement. The survey polled 1,0001 Americans ages 25–75 with a median household income of $63,000.

Bonus: Download the 2014 Inside Benefits Communication Survey report

Following a successful wide release at last week’s National Business Coalition on Health annual conference in Washington, D.C., we invite you to download, read and share the 2014 Inside Benefits Communication Survey report, Insights for Improvement, along with accompanying infographics and breakout reports.

Click here to access full survey data and materials. Then, send your feedback to ibcsurvey@benzcommunications.com. We’ll begin planning the 2015 survey early next year.