Time for Employers to Start Planning for ObamacareHealthcare Training Resource
February 24, 2014 — 925 views
The health coverage requirements outlined in the Patient Protection and Affordable Care Act will only come into force next year but it is not too early for employers to start thinking seriously about it. The Act will typically apply over organizations with more than 50 people on the rolls which means that a substantial number of businesses across the United States will be impacted by the new requirements. For those who meet the threshold requirements, taking a look at the Employer Mandate should be on the list of priority items.
Avoiding Penalties for Non-Conformation
The Act will come into force by the 1st of January 2015 and those employers who meet the criteria outlined but fail to comply with the requirements could be facing some heavy penalties. To avoid this, it is important for all employers to understand clearly whether or not their business matches the criteria and if they are required to adopt the mandate. All employers covered by this Act will need to provide the pre-specified medical coverage to employees. Failure to do so will result in fines being imposed on the employer.
The focal point of the health coverage is that employers should make affordable healthcare available to employees who work full time for the business. This affordable care coverage should be such that it covers minimum requirements of the employee. Penalties may apply on even those employers offering health coverage if it is deemed inadequate under the Affordable Care Act. For instance, if a single full time employee of the business is entitled to a subsidy on individual coverage purchased via federal/ state health care exchange, his employer may be penalized.
Pay or Play
Employers need to make up their minds about whether they will offer the Affordable Care Act coverage or face financial penalties, or in other words, pay or play, as the mandate is being called. The final regulations outlined by the Treasury Department indicate that a reprieve of sorts is now being offered to employers of less than 100 employees. The deadline for complying with the ACA’s employer shared responsibility health coverage has been extended to January 1st 2016 for these businesses. To qualify for the extension, employers will have to establish that no employees have been removed from the rolls to ensure that the business falls within the less- than- 100- employees category. However, the business will still be entitled to the extended deadline if the workforce has been cut down owing to bona- fide reasons.