Health Care Reform - Is Your Business Exempt from Coverage Requirements and Penalties? How Do Part-time and Seasonal Workers Fit into the Mix? Do You Qualify for Tax Credits in 2010?
The Patient Protection and Affordable Care Act (H.R. 3590), which was signed into law by President Obama, includes provisions that require employers with more than 50 full-time employees to provide qualified health insurance or pay a penalty for each full-time employee. The Reconciliation bill passed by the House and sent to the Senate includes a provision that requires application of a formula that also factors in the hours worked by part-time employees, which will count toward the 50 employee threshold. Employers with more than 200 full time employees (FTE’s) are required to automatically enroll employees in a qualified health insurance plan. These provisions take effect in 2014.
The healthcare reform law defines a "large employer" as an employer with an average of at least 50 full-time employees during a calendar year. The law also defines a "full-time employee" as an employee who is employed on average at least 30 hours of service per week.
Employer Mandates and Fees for Not Providing Coverage
Employers with more than 50 full time employees will pay fines or penalties for not providing “affordable”, minimum coverage. If just one employee requires the premium assistance tax credit, the fines or fees will apply. If the coverage provided by the employer is unaffordable or does not cover 60 percent of the total costs, the employer will pay $3,000 for each employee receiving a credit or $2,000 for each full-time employee, which is ever the lesser amount. In 2014 employers with more than 200 employees must automatically enroll new full-time employees in coverage. Seasonal employees are exempted, but not for employers with more 50 or more full-time workers.
Confused? This is straight from the attorney reading the bill. Since the policy coverage will be determined by the Secretary of Health and Human Services, what will constitute “affordable” coverage will be determined once those required policies are prescribed by the agency.
Exemptions for Seasonal Employees
Employers are exempted if 1) their workforce is less than 50 full-time employees for 120 days or fewer during the calendar year; and 2) those employees in excess of 50 during the 120-day period were seasonal workers. (This provision will probably precludes most outfitters from being caught in the coverage requirements, depending on the definition of seasonal worker. Companies with 50 or more full-time employees are going to be under the mandates regardless of the status of part-time workers.)
The seasonal worker exemption does not apply to "larger employers", those with more than 50 full time employees for more than 120 days per year. The healthcare reform law defines "seasonal worker" as a worker who performs labor or services on a seasonal basis as defined by section 500.20(s)(1) of title 29, Code of Federal Regulations and retail workers employed exclusively during holiday seasons. That section of U.S. Code defines "seasonal basis" as "Labor is performed on a seasonal basis where, ordinarily, the employment pertains to or is of the kind exclusively performed at certain seasons or periods of the year and which, from its nature, may not be continuous or carried on throughout the year. A worker, who moves from one seasonal activity to another, while employed in agriculture or performing agricultural labor, is employed on a seasonal basis even though he may continue to be employed during a major portion of the year."
The law also defines a "full-time employee" as an employee who is employed on average at least 30 hours of service per week.
Inclusion of part-time workers is in the Senate Reconciliation bill
The House-passed reconciliation bill, which is under consideration in the Senate, allows employers that do not offer insurance and have more than 50 full-time employees to subtract the first 30 full-time employees from the fee (penalty) calculation. To view the Reconciliation Act of 2010 go to http://www.opencongress.org/house_reconciliation The reconciliation bill has technical errors and will have to be returned to House of Representatives for corrections.
The House-passed reconciliation bill also requires employers to track the number of full-time equivalent (FTE’s) employees by calculating the total number hours worked in month by part-time employees (working less than 30 hours per week) and divide those hours by 120. Each 30 hour FTE is added to the number of full-time employees to determine the employer’s coverage status.
Under the title Promoting Individual Responsibility almost everyone (meaning your employees) will be required to buy insurance by 2014 or pay a penalty: $95 for 2014, $495 for 2015, $750 for 2016 (or, up to two percent of income in 2016), up to a cap of the national average bronze plan premium. Families will pay half the amount for children, up to a cap of $2,250 in penalty per family. After 2016, dollar amounts are indexed. If affordable coverage is not available to an individual, they will not be penalized.
Some businesses will qualify for tax breaks for providing coverage beginning this year.
In 2010 the first phase of the small business tax credit for qualified small employers for contributions to purchase health insurance for employees. Businesses with fewer than 50 employees will get tax credits covering 35 percent of their health care premiums, increasing to 50 percent by 2014.
States Sue over Constitutionality of Health Care Bill
Two separate suits filed in Federal Courts by 14 states are challenging the constitutionality of the law. Virginia filed suit on the grounds that the federal government commerce clause cannot compel individuals to buy health insurance. Florida was joined by Alabama, Colorado, Idaho, Louisiana, Michigan, Nebraska, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington in a suit challenging the law under the 10th Amendment of the Constitution. The 10th Amendment states: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. States are concerned about adding hundreds of thousands of people to the Medicaid rolls as mandated by the bill.
United Airlines Magazine to Feature Adventure Travel Article
Hemispheres, the magazine onboard United Airlines, will feature a 10 page article on adventure travel in the May issue. The editors have traveled the world to find unique locations for once in a lifetime adventure vacations. The article will have many pictures to entice the Hemispheres reader’s curiosity to explore further. Some of the adventures covered include: jungle trek, scuba diving, trout fishing, whitewater rafting, river boat cruise in the Amazon, volcano hiking in Peru and stock car racing in the Poconos. For additional information, contact Catherine Hanson 678.553.8086. Catherine Hanson [Catherine.Hanson@ink-publishing.com]