Healthcare Reform For Dummies

Understanding The Affordable Care Act (AFA) as we get closer to healthcare reform has become a hot topic for business owners. One of the main components of the (AFA), is the requirement that large employers provide minimum essential health insurance to full-time employees. It sounds straightforward, but how to stay compliant with it is much less so.

According to the mandate, a large employer by definition, is a company that employs 50 or more full-time employees. The basic defintion of a full-time employee is someone who is employed a minimum of 30 hours per week. As a large employer, you will be required to provide group health coverage to full-time employees and their dependents or pay a penalty of up to $2000 per full-time employee. What does providing health coverage mean? According to the (AFA), by definition, providing health coverage shall mean that the coverage must be classified as both affordable and sufficient. Failure to meet the definition of affordable and sufficient health coverage, will come with a penalty of $3000 per full-time employee.

On the surface, the definition of a full-time employee would seem to be straightforward. However, there have been a number of temporary regulations that have made the definition less clear. In fact, at this point, these temporary regulations have made the full-time employee status definition, undefinable. This uncertainty has created a situation where making a decision regarding health coverage in order to be compliant with the (AFA), has turned into a strategic planning exercise. Unfortunately, health coverage is only one component of the Patient Protection and Affordable Health Care Acts.

As the deadline approaches to investigate and implement a plan to comply with the legislation, most businesses are still operating in the land of the unknown. The risks are several, uncertain employees can quickly become dissatisfied employees, what is the cost to maintain compliancy, what will be the cost to interpret and integrate new regulatory changes, and  finally, the financial penalties imposed for non-compliance.

My recommendation would be to spend the money to bring in an insurance professional who is both knowledgable and affordable to help you review coverage options and implement compliant coverage. As the deadline is approaching, there will undoubtedly be more regulatory changes, so get professional  advice sooner than later.

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