Patient Protection and the Affordable Care Act (PPACA)

With the passing of the 2012 federal elections we now have a clearer picture of what will likely happen over the next year with the Affordable Care Act.  Barring any last minute surprises from the Supreme Court (see article on this topic dated 11/26/2012) we should expect that the most significant provision of the Affordable Care Act, the health insurance mandate, will be implemented on schedule by 2014. The individual and employer mandates in the Affordable Care Act are fairly complicated. 

The initial questions most employers have are, how will the employer mandate of Affordable Care Act affect me as well as will I owe a tax/penalty in 2014? To determine if you will need to offer coverage or likely owe a tax, three scenarios have been laid out. Start by counting all of your employees, including part time employees, and review the three categories.

50 or Fewer Employees

Employers with fewer than 50 employees- you will not be face a tax/penalty for failure to provide health insurance coverage. Please note that if you have fewer than 25 employees you may be eligible for a tax credit if you do offer health insurance (see article on this topic dated 12/05/12).

Close to 50 Employees

Employers that are close to 50 employees can compute their actual employee count in the following manner.  Count your full time employees, those working over 30 hours a week for at least 120 days in a year, to obtain your full time employee count . Next add up all part time employee hours.  Take the total part time employee hours per month and divide by 120.  That number is added to your full time employee count. The sum of the two counts is called the full time equivalent employees. (Please contact Cardinal for employees’ total hours over the last year if you wish to estimate it based on the last 12 months.)  If you are close to 50 full time equivalents, 2013 is the time to reflect on how many employees you need in 2014.  Regardless of how many employees you expect to have in 2014 a well thought out contingency plan is prudent if business suddenly increases or decreases.

Over 50 Employees

Employers that will have over 50 full time employees (or the combination of full and part time employees that puts you over the 50 full time equivalents) need to plan now for either providing some type of basic health insurance coverage, paying the tax/penalty or using one of several strategies to mitigate your exposure that fit with your business model.

Over the next year I will be updating you on possible strategies to review like your ability to pass costs on to customers, what your competitors will be doing, talent retention as well as the likely cost of these options

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If you have any questions please feel free to call me directly at 541.726.8060 extension 2205.