“The overall turnout and high-level of questions being asked by California operators shows that the industry is making strides in modifying their business structures to accommodate for the requirements of health care reform,” CRA President + CEO Jot Condie said. “Though many questions remain unanswered, we continue to work to be a valuable resource for operators who are navigating this process.”
Beginning each session, Spicer presented a list of eight points operators needed to know about the Affordable Care Act (ACA):
- Employers are not required to provide health insurance to employees. The law establishes that employers with 50 or more full-time employee equivalents either offer affordable coverage to full-time employees or pay tax penalties.
- There is an individual mandate, as well as and employer mandate for coverage.
- Health Exchanges must be established through which individuals and small employers can purchase health insurance. In California, this is Covered California, as well as its Small Business Health Options Program.
- Federal premium tax credits and subsidies will be made available to low- and moderate-income individuals who don’t have access to affordable employer-sponsored health insurance.
- Some definitions:
- A full-time employee is one who works an average of 30 hours per week.
- Full-time equivalent employees is an aggregate of the number of hours worked by non-full-time employees divided by 120 hours.
- A large employer is an employer with 50 or more full-time and/or full-time equivalent employees.
- Seasonal employees are any who work less than 120 days per year under existing Department of Labor regulations.
- Control group: Employers must aggregate the total number of employees of all corporations, partnerships or proprietorships under common control.
- Common control is considered by the IRS as five or fewer entities with 80 percent or more common ownership or control.
- Large employers who do not offer coverage to their full-time employees will be subject to an annual tax of $2,000 per employee if at least one full-time employee receives a premium assistance tax credit through Covered California. There is an exemption for the first 30 full-time employees. If a large employer offers qualified coverage but the employee’s share of the premium exceeds 9.5 percent of household income, employers face an annual tax of $3,000 per full-time employee eligible for and receiving tax credits through the exchange.
ACA’s expansion of non-discrimination rules prohibit employers from discriminating in favor of highly compensated employees. In 2011, the IRS deferred enforcement of this provision until further guidance is issued.
- The measurement or stability safe harbor period allows employers to have a look-back period to determine whether a certain category of employees should be considered full-time.
- In October 2013, employers must be prepared as open enrollment begins in Covered California. Employer health benefit plans must be compliant by Jan. 1, 2014.
In the following days and weeks, the CRA will publish video questions and answers from the Sacramento Health Care 201 session April 10. Interested in attending a future Health Care 201 session?Fill out a form to let the CRA know. Or, ask a health care question now and the CRA will contact you with an answer or referrals to appropriate resources.