The Numbers Behind the Affordable Care Act

The Affordable Care Act is coming. Is your company ready? It is vital that your organization prepares now for the Patient Protection and Affordable Care Act that goes into effect in 2014. Requirements for employers and eligibility for employees will both be based on data from 2013. While sorting through all the information may be confusing, there are key numbers that can help make sense of it all.

As part of the affordable care mandate, all employers must determine their Applicable Large Employer Status. Recall that large employer status is based on the number of full-time and full-time equivalent employees.

50 Full Time Employees

For organizations with fewer than 50 full-time employees, employers do not have to offer health insurance. It is assumed that their employees will get coverage directly from private exchanges. Experts describe private exchanges as “online portals populated with a variety of easily comparable health-plan options. In essence, they are like shopping malls.” Fritz Teutsch, President of BASIC, commented, “BASIC is committed to our agent and broker partners to bring a private exchange to support a health benefits revolution.”

30 Hours per Week / 130 Hours of Monthly Service

Employees who work more than 30 hours per week or 130 hours per month must be provided access to employer-sponsored health care benefits (if at a company with 50 or more full-time employees). If employers are not compliant they will face a per employee penalty if at least one full-time employee receives coverage through an exchange.

9.5 Percent of an Employee’s Income

Employer offered health insurance is considered affordable if it does not exceed 9.5 percent of an employee’s wage income per a W-2 statement. What about the lowest paid employee? 9.5 percent still applies. This requirement applies to what it would cost an employee to cover only themselves, not the coverage her or she would potentially elect for a family plan.
These new regulations place a significant burden on employers. As industry leaders BASIC is committed to propelling into health care reform and providing integrated HR, FMLA, and Payroll solutions that come full-circle for employers nationwide.

View our previous webinar, “Determination of Full-Time Status (As it Relates to Healthcare Reform)” or select another webinar from a wide-range of pertinent topics.

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