What’s new for employers with the Affordable Care Act
Insurance benefits analyst Donald Poulin said what most people associate with the Affordable Care Act are the well publicized aspects such as coverage for minors until they are 26 and free birth control for women — but employers need to know a lot more about the legislation.
Here’s a basic breakdown of the changes coming with the Affordable Care Act, compared to the Massachusetts health care reform.
Massachusetts health care reform
∎ Regulations apply to employers with 21 or more full-time employees.
∎ Those employers must offer insurance to anyone who works at least 35 hours per week.
∎ The mandate only applies to employees who work regular schedules, making exceptions for per-diem workers.
∎ Employers need to prove they are making a “fair and reasonable” contribution to employees’ insurance by contributing at least 33 percent of the cost of the plan or by showing that a minimum number of employees have enrolled.
∎ The penalty for not offering insurance to a full-time worker is $295 per employee.
Federal health care reform
∎ Regulations apply to employers with more 50 or more full-time employees, or the equivalent in part-time workers.
∎ Those employers must offer insurance to anyone who works over 30 hours per week.
∎ That applies also to workers who work per diem — meaning they do not have a set schedule — and part-timers who take on extra shifts and therefore average over 30 hours per week. This requires employers to track the hours of employees who do not work a regular schedule, and then provide them health insurance if they average over 30 hours a week.
∎ The regulations allow employers to set up a “measurement period” of between three and 12 months to come up with those workers’ average hours, but they have to use the same period for each employee.
∎ Insurance plans must be deemed affordable by passing two tests: The employee cannot be required to pay for, on average, more than 40 percent of the costs of all covered benefits, and the insurance plan cannot cost so much that a single person has to spend more than 9.5 percent of his or her household income on health coverage.
∎ Employers will face a fine of $2,000 per full-time employee who is not offered insurance, minus the first 30 employees.
∎ Employers will pay a $3,000 penalty per employee if the insurance offered is not deemed affordable.
— Rebecca Everett