Posted on January 8, 2013 by smithamundsen
Contributed by Rebecca Dobbs Bush
With the ringing in of the New Year, we are now officially on the eve of the employer mandate provisions within Health Care Reform. The employer mandate provisions require those employers with 50 or more “full-time equivalent” employees to offer “minimum value” coverage to employees that work 30 or more hours per week. Where two or more companies have a common owner, or are otherwise related, they are combined for purposes of determining whether they employ enough employees. The coverage offered by the company must be “affordable” for employees. Where an employer does not do this, and at least one full-time employee receives a premium tax credit to help pay for coverage on an Exchange, the employer will be subject to penalties or a “tax” of $2,000 per full-time employee – with the first 30 full-time employees “free.”
The employer mandate provisions are now also being referred to as the “shared responsibility” provisions. The IRS has issued multiple Notices attempting to clarify the confusion over implementation and application. Most recently, the IRS issued proposed regulations and FAQ’s on December 28, 2012. The attempted clarification of the shared responsibility provisions have only served to confirm the confusing and complicated nature of the provisions.
What is imperative for every employer to understand is that the basis for determining how and whether the shared responsibility provisions apply to your business on January 1, 2014 depends upon the make-up and structure of your workforce during 2013. Accordingly, employers need to act now to understand whether and how the shared responsibility provisions of Health Care Reform will affect them come January 1, 2014.
Filed under: Employee Benefits, Healthcare | Tagged: Health care reform, Health insurance mandate, Internal Revenue Service, Patient Protection and Affordable Care Act | Comments Off
Posted on June 28, 2012 by smithamundsen
Contributed by Rebecca Dobbs
On June 28, 2012, the Supreme Court issued its highly anticipated and long-awaited ruling on Health Care Reform. Primarily, the court was reviewing two provisions in the Act: 1) the individual mandate and 2) Medicaid expansion. Because the ruling with regard to the Medicaid expansion provision does not directly impact employers, this article will focus only on the ruling with regard to the individual mandate.
Justice Roberts wrote the decision for the majority. In it, he acknowledged the individual mandate was a “penalty” for purposes of jurisdictional issues which allowed the court to render a ruling. But, for purposes of determining Congress’ power to issue the mandate, the court held that the mandate was a “tax.” For those of you who aren’t aware, Congress’ power to tax is much, much broader than the power granted to them under the commerce clause of the Constitution. This reasoning allowed the court to uphold the individual mandate while determining at the same time that the individual mandate was outside Congress’ authority under the commerce clause.
We have reiterated before that the employer mandates within Health Care Reform were not directly an issue before the court – a common misconception. The employer mandates would have been indirectly affected had the court ruled the individual mandates were unconstitutional and then also went on to hold that they rendered the entire act unconstitutional because they could not be severed from the rest of the provisions within the act.
What does this mean for employers? If you were within the category of employers that had been preparing for upcoming compliance requirements without regard to the outcome of today’s decision, your preparation efforts were not wasted activities. If you were within the category of employers that was disregarding upcoming compliance requirements in the hope that the Supreme Court would save you from them, you need to immediately redesign your current strategy.
Filed under: News & Tips | Tagged: Commerce Clause, Health care reform, Individual mandate, Medicaid, Patient Protection and Affordable Care Act | Comments Off
Posted on March 16, 2012 by smithamundsen
Contributed by Rebecca Dobbs
The Patient Protection and Affordable Care Act (ACA) requires all large employers (with more than 200 employees) to automatically enroll full-time employees in a health plan, if they offer one. This provision was scheduled to take effect in 2014. Interestingly, it was done as an amendment to the Fair Labor Standards Act (FLSA)–a law that allows plaintiffs, i.e. employees, greater remedies than the Employment Retirement Income Security Act (ERISA) currently does.
The automatic enrollment provision of the ACA will most likely cause employers to feel an immediate cost impact. Increasing enrollment in a sponsored health plan will instantaneously increase the monthly invoice an employer receives from its insurance carrier.
Pursuant to the automatic enrollment provisions, employers are required to notify employees that they will be automatically enrolled in a health plan and give them an opportunity to opt out—not much else is known outside of that.
On February 9, 2012, the Department of Labor (DOL) issued a Technical Release which, among a few other things, announced that guidance on automatic enrollment will not be ready by 2014. The DOL made clear that until such final regulations are published, employers will not be required to comply.
The DOL has indicated that this delay is necessary “[i]n view of the need for coordinated guidance and a smooth implementation process….” While this applies to just about every provision of Health Care Reform, we’ll take any additional time to seek any clarity that we can get.
Filed under: Employee Benefits, News & Tips | Tagged: Fair Labor Standard Act, Health care reform, Health policy, Insurance, Patient Protection and Affordable Care Act | Comments Off