Our Managing Principal, Brian Driscoll has done a great job in prior OneDigital posts defining how the Patient Protection and Affordable Care Act (PPACA) will impact workforces here in the United States; however one lingering question for multinational employers is how this law will impact their employees who are working in other countries around the globe.
Generally, for locations outside of the US, who employ non-US, local citizens, there is no impact as a result of PPACA. However, if your organization offers benefits to expatriate employees (employees who are working in a country other than their home country), and their insurance is being provided by a U.S. insurer, these plans will be subject to the PPACA rules, including the fees and taxes.
In a March 8, 2013 release, the Departments of Labor, Health and Human Services and Treasury issued a Frequently Asked Question (FAQ) announcing that compliance with most PPACA provisions is being delayed until 2015 for expatriate plans, as long as they meet the following definition:
Insured group health plans with plan years ending on or before December 31, 2015, in which enrollment is limited to individuals residing outside of their home country for at least six months of the plan year and any covered dependents.
Until 2015, expatriate coverage will be exempt from the Reinsurance Assessment, and these plans will qualify as minimum essential coverage for purposes of the individual mandate. Participants will not be subject to penalties during the delay period. Since expatriate plans are unique in nature, this delay will allow the departments more time to gather information on the impact and application of the law.
Although most of the provisions will not apply until 2015, the Health Insurer Fee, which is a fee being assessed to all US insurers proportionately based on their premium revenue, will still go into effect on January 1st 2014, and will likely have an impact on premium thereafter.
Questions about PPACA and your global workforce? Email me at firstname.lastname@example.org.