Since 2010, when the Patient Protection & Affordable Care Act was passed, a gazillion news stories, articles and seminars have talked about what the act means and requires.
For a time, many of us thought some or the entire act would be struck down by the U.S. Supreme Court. Then, after the high court issued its opinion in June, we were forced to realize that this giant compliance burden is here to stay. So, now what?
One of the many issues that everyone has been talking about is whether employers should play or pay – that is continue to offer health coverage to all full-time employees or get out of health care altogether and instead pay the $2,000-per-employee penalty.
It is certainly tempting to say to heck with this, and just pay the penalty. But it seems more likely that most employers will play and continue to offer health coverage – not just to avoid the penalty, but also because employees have come to expect the benefit.
If you are an employer who has decided to play, you need to be proactive now – not next month, not next year – to make sure you will, in fact, offer coverage to all of your full-time employees in 2014, when the penalty kicks in.
First, a full-time employee is an employee who is employed on average at least 30 hours per week. About a month ago, the IRS issued guidance to help employers determine who is a full-time employee. The guidance is detailed, but in general the hours that an employee works in 2013 will determine whether they are a full-time employee in 2014. Now, you need to make sure you are properly structuring your employee hours and classifications so that you are ready for 2014.
Second, many employers have long classified individuals as independent contractors who may, in fact, be employees. Now especially, you need to look at your independent contractors and make sure that they are, in fact, independent contractors. If you have even one so-called independent contractor who is really a full-time employee, and who is later reclassified by the IRS as an employee, you could be hit with the potentially massive penalty if the individual enrolls in subsidized coverage through the exchange.
There are plenty of other issues that employers need to be looking at – now – but these two are a good start.