New Affordable Care Act laws to impact employers
Updated On: Jun 12 2013 04:02:38 PM CDT
The new Affordable Care Act will start to take effect soon, and the deadline for employers to start formulating healthcare insurance plans for their employees is nearing.
More than 50 employers from across southeast Idaho gathered into one of the Portneuf Medical Center's conference rooms today to learn what they need to do when it comes to providing proper healthcare for employees.
Tom Mortell was one of the conference speakers and acts as head of the health law practice at the Hawley Troxell law firm.
"For the first time they (employers) are required to provide health insurance for their employees or face penalties levied by the IRS," Mortell said.
By the Affordable Care Act's new laws, the definition of a big business is constituted as a business with 50 or more employees who work there. Now, employers have to worry about what are called 'shared responsibilities' under the Act.
"These employers with over 50 employees are now going to have to decide whether they want to provide health coverage or whether they want to pay the penalties," Mortell said.
If an employer does not provide the proper health coverage through the healthcare act, the employee may seek coverage through the Idaho Health Insurance Exchange program. However, this could cost employers up to $40,000 as a penalty.
Now, these employers are facing some tough decisions.
Chairman of the Idaho Health Insurance Exchange Board Stephen Weeg said some of these employers are just barely considered large businesses, and yet they are still struggling to afford providing this insurance for their employees.
"It is that group between 50 and large enough to feel comfortable in knowing you have to provide to your employees," Weeg said. "Those are the folks that are caught in this decision."
Weeg also said larger businesses such as the PMC will not feel the impacts of the new regulations as heavily since they already have healthcare insurance plans in place for their expansive numbers of employees.
"For those employees over 50 that have not offered health insurance, they are going to have to make some really hard decisions. For the employers under 50, they have more degrees of freedom. For the larger employees in our community, they are already offering health insurance," Weeg noted.
Hawley Troxell legal counsel Kara Heikkila said one of the most important rules employers need to pay attention to is defining what a full-time employee is.
"Right off the bat, you want to identify who your full-time employees are," Heikkila. "If the federal government sees an employer not providing the proper health insurance for a misclassified employee, they see it more as them missing out on tax revenue, so that can pose as a liability for the employer."
According to Heikkila, many employees hire private contractors and if the line is not defined between that private contractor and one of their full-time employees, this is where the lawsuits and hefty penalties come into play.
She said there really is no clear line between these two. However, there are a series of tests employers and legal experts conduct to draw this line. The most important test falls under the amount of control an employer has over an employee.
Weeg said these companies who cannot afford to provide the proper insurance will most likely have to cut spending in other areas. Quite possibly, this could mean sacrificing employee bonuses for healthcare coverage.
However, Mortell said this new Act will provide coverage for many Idahoans who fall under the 400% poverty line. This means, a family of four whose household income is less than $94,200 will qualify to gain some degree of government subsidies to help pay for their insurance. Weeg said nearly 80% of Idahoans fall under this poverty line.
For more information on these new laws for employers, Weeg said insurance agents and even the Chamber of Commerce will be able to offer guidance.
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