Denise M. Blommel 2014-04-01 00:26:22
Obamacare: An Employer’s Checklist for 2014 The Patient Protection and Affordable Care Act of 2010 (PPACA) aka Obamacare created a sea change in healthcare insurance. While the national focus has been on the rocky rollout of healthcare.gov and the Congressional bickering that shut down the government in 2013, the following are essential parts of PPACA that employers and their human resource departments need to know about now. New Hire Notice Beginning in October 2013, every employer covered by the federal Fair Labor Standards Act (FLSA) must give a notice to new hires within 14 days as to whether they are covered by the employer’s group health insurance. Notice forms are available at http://www.dol.gov/ebsa/healthreform/regulations/coverageoptionsnotice.html. Nursing Mom’s Break For the first time, federal law requires a work break. Employers covered by the FLSA must give nonexempt employees an unpaid break to express milk within one year after the birth of their babies. See: http://www.dol.gov/whd/regs/compliance/whdfs73.pdf. Full-Time Employees PPACA defines full-time employment as 30 hours per week or 130 hours per month. Overtime is due after 40 hours worked in a workweek under the FLSA. In the past, group health insurance carriers arranged the definition of full-time employee as X hours per week with their employer clients. With the advent of PPACA, most carriers will probably mandate that full time for group health purposes is 30 hours per week. Individual Mandate As of Jan. 1, 2014, every man, woman and child in the United States must be covered by health insurance (including Medicare, AHCCCS and VA). There are several exceptions such as for Native Americans, undocumented persons, incarcerated persons, and those who can prove that they cannot afford the most basic coverage. The penalties for noncompliance appear nominal. However, they will increase over time and can be heavy depending upon the individual’s income level. See: http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-Home. Affordable and Accessible The employer cannot charge any more than 9.5 percent of an employee’s family income for a group health care premium. The IRS uses a safe harbor calculation here of 9.5 percent of the employee’s W-2. Many employers require employees to wait until the first of the month after they have been employed for 90 days to become covered by group health care insurance. PPACA requires that any coverage occur within 90 days of hire. See: http://www.dol.gov/ebsa/healthreform/index.html. Play or Pay Employer Mandate The administration postponed the requirements for large employers to cover their full-time employees with health care insurance, the Play or Pay Employer Mandate, until 2015 for 100 or more employees and 2016 for 50 or more employees. Now is the time for employers of 50 or more to calculate whether they meet PPACA’s large employer definition. Now is also the time for employers to ascertain whether it makes more sense to pay the penalties for noncompliance or to purchase group health care insurance for the full-time staff. The penalties only apply if a full-time employee receives a tax credit (subsidy) for purchasing insurance through the government. If a large employer fails to offer coverage, the penalty is $2,000 times the number of full-time employees less 30. If a large employer offers coverage but that coverage fails any of the following requirements: 90-day limit, offer to x% of full-time workforce (different rules in 2015 and 2016), minimum essential coverage or it is unaffordable, then the penalty is the lesser of $2,000 times the number of full-time employees less 30 or the number of full-time employees receiving the tax credit times $3,000. See: http://www.irs.gov/uac/Newsroom/Questions-and-Answerson-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act. Preexisting Conditions and SHOP Beginning January 2014, group health insurance carriers cannot underwrite for pre-existing conditions. This feature should make more citizens, including business owners, eligible for health insurance. The Small Business Healthcare Options Program (SHOP) is available to certain Arizona businesses in 2015 with employees earning at certain levels. Tax credits may be available to qualifying small business owners who provide group health insurance. See: https://www.healthcare.gov/small-businesses/. No Retaliation PPACA amended the FLSA to provide for whistleblower protection for employees who reasonably believe that their rights under PPACA are being violated. The Occupational Safety and Health Administration is the enforcement agency and employees have 180 days from the date of an adverse action to file their complaint of retaliation with OSHA. See www.whistleblowers.gov. An employee who has insurance coverage and then has his hours cut to 29 hours per week, so that the employer can avoid continuing to cover him may have a claim under Section 510 of the Employee Retirement Income Security Act (ERISA). This law prohibits interference with the “attainment” of a participant’s rights to which he “may become entitled.” Group health coverage is governed by ERISA. That same statute prohibits retaliation. Employers are urged to consult as soon as possible with their insurance brokers, attorneys and accountants concerning compliance with this complex and controversial law. Denise M. Blommel is a solo private practice attorney in Scottsdale. She represents employers and employees in employment and labor matters. Denise is first vice chair of Girl Scouts – Arizona Cactus-Pine Council. She is a member of the State Bar of Arizona, Scottsdale Area Chamber of Commerce, Scottsdale Bar Association and the Arizona Employment Lawyers Association. Denise is a frequent presenter for government, business, educational and community groups. For more information, visit www.azlaborlaw.com or call (480) 425-7272. Her mailing address is 7150 E. Camelback, Suite 415, Scottsdale, AZ 85251. Her email address is firstname.lastname@example.org.
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