On Thursday, May 19, I presented to the Residential Services Association of Wisconsin. As has been typical lately, I spoke about health reform, including Accountable Care Organizations and the legal challenges to the Affordable Care Act (ACA).
The audience included smaller employers who operated group homes for individuals with disabilities. Although they were intrigued by the idea of Accountable Care Organizations, what they were more concerned about was the impact of the ACA on their ability to survive as a business. I discussed Wisconsin’s Health Insurance Exchange ideas, the individual mandate and expectation that everyone have health insurance under the ACA. The audience was worried that, as small employers, they would not be able to afford to provide health insurance to their employees as the ACA requires them to do.
Because of limited time, I was not able to explore each facet of the ACA to help the audience understand its total impact on them; however, this blog might help answer some of the questions that were not addressed in full. Included in this blog is a summary from the Congressional Research Service
regarding employer penalties under the ACA. According to Page 1 of the summary, which references §§ 1513 and 10106 of the ACA, only “large employers” are subject to the penalty. A large employer is defined as having “at least 50 full-time employees during the preceding calendar year.” “Full-time employees” are defined as those working 30 or more hours per week.
Also included is a PowerPoint presentation
I gave in January 2011 to the Society of Human Resource Managers. This presentation
provides examples on how an employer might calculate the penalty for not offering health insurance to its employees.
As one can see on slides 45-48, the employer does not pay a penalty for the first 30 employees who do not receive health coverage through their employer. The penalty is calculated after the employer exceeds the 30 employee threshold.
As a result, small employers (those with fewer than 50 employees) would not be subject to a penalty if they failed to offer “minimum essential benefits” to their employees. In 2014, those employees could obtain health insurance through the Insurance Exchange. As one can also see from the attached slides, it is not clear what Wisconsin’s Insurance Exchange will look like in 2014.