By: Caitlin Esposito
Jill Bergman, Vice President of Compliance, Chernoff Diamond
Steven Friedman, Shareholder and Co-Chair, Employee Benefits Practice Group, Littler
If employers have over fifty full-time employees, they must provide all of their full-time employees with healthcare coverage that meets the government’s standards. An employee is considered full-time if he/she works a minimum of thirty hours a week. Employers must offer the opportunity to enroll in a minimum essential coverage plan to at least 95% of their full-time employees. If employers do not comply with these governmental standards, they must pay a tax of $2,000 per full-time employee. However, most employer plans satisfy this minimum standard. Mandatory reporting requirements have been delayed one year until January 1, 2015. Ultimately, employers have one year to decide if they are going to pay-or-play.
Marketplaces, also known as exchanges, offer qualified health plans. There are different levels of coverage (bronze, silver, gold, and platinum). Marketplaces help individuals who go to purchase coverage by determining if they are qualified for lower premium costs.
Individuals can enroll to help determine eligibility for other government programs, such as Medicaid, CHIP, QHP, or other federal assistance.
Small group marketplaces offer coverage to all full-time employees in a QHP based on either the employer’s primary place business address or primary worksite. In New York, small businesses are considered employers with at least 50 employees. Employers have a number of benefit and contribution options, they can choose a single plan or offer a variety of plans to employees.
A recent poll of small business employers reveals that a majority of employers (48%) believe that the ACA is going to be bad for their business. Almost a quarter of the employers polled are going to consider dropping health insurance as a result of the ACA. About 20% of employers are considering reducing the hours of employers from full-time to part-time as a result of the ACA. These results show that small businesses are taking a close look at regulations and thinking of taking action.
Employers need to determine if they are in compliance with current and upcoming requirements. Employers should start counting employees’ hours to determine who is a full-time employee to see who falls in the plan. Employers should keep on planning and weigh the cost of paying-or-playing.