While the current political landscape suggests changes may be looming for the Affordable Care Act, it is important to ensure you are aware of the law in its current state and what penalty risks you may face.
The most complicated component of the ACA for most companies is the Shared Responsibility requirement. It requires people to secure a minimum level of health care protection and they also require companies with more than 50 full-time employees to offer their workers budget friendly health insurance options.
Companies who presently fail to offer coverage considered acceptable under the ACA can face fines of $2,000 per full-time worker.
Companies with high labor costs and minimal profit margins are typically the most exposed to potential ACA penalties. This includes businesses involved in logistics, hospitality, and retail spaces. (Due to rule changes, many formerly part-time employees were reclassified as full-time in 2014.)
Because these industries tend to offer lower wages, an employer’s group health plan may be considered “unaffordable” which would then trigger ACA penalties for the employer should the workers receive additional subsidies to buy protection via the public health care exchange.
If you meet the trigger size and are required to offer minimum, affordable coverage… but at least one worker purchases through a public exchange instead… you can be penalized.
Likewise, if you offer minimum required coverage to all workers but it isn’t economical, making it so the worker can’t afford the cost of protection… you can be penalized if only one staff member purchases through a public exchange.
The key to managing the impact of ACA penalties is to change your plan designs and premium choices to maximize worker participation in the plans.
Naturally understanding the in’s & outs of these complexities is reason enough to rely on the help of someone with health plan benefits experience to ensure you’re crafting the right plan for the right outcome.
And as the law evolves, having someone familiar with the changing landscape will help you maximize the benefits you offer to your employees while helping you mitigate any exposer you might have to fees & penalties.
If you are concerned about changes to the law, your risk exposure, or simply making certain you are offering the right plan for your team, be sure to reach out to your benefits specialist right away.