bake - October 2013 - 15

labor front

In some cases, employees might be better off getting
their coverage through the state exchange and receiving
subsidies to offset the cost of the insurance.
coverage is not taxable to employees, there’s been some

of health insurance premiums is no more than 9.5% of total

speculation that Congress may want to impose income taxes

income), employees won’t be eligible for subsidies. On the

on such benefits in the future. As a result, employers who

other hand, if your plan won’t be “affordable”, employees who

issue fewer than 250 W-2 forms have the option of reporting

participate in your plan may be eligible for such subsidies,

the healthcare coverage costs — and may be required to do

but then they can’t take advantage of your contribution to

so in the future.)

the plan (they’ll have to pay 100% of the premiums, but this
amount is supposed to be reduced by the subsidies).

Are you a large or small employer?
If you have fewer than 50 employees, you probably fall into

The presence of the subsidies will make the decision about

the “small employer group” and don’t have to worry about the

whether to offer (or continue to offer) a group health plan

requirements to provide health insurance that will be imposed

more complicated. For example, in some cases, employees

on larger employers. However, the definition of your group for

might be better off getting their coverage through the state

purposes of the ACA depends on your total “full-time equiva-

exchange and receiving subsidies to offset the cost of the

lent” (FTE) employees. A “full-time” employee is one who

insurance. On the other hand, critics have raised concerns

works at least 30 hours a week; employees who work under

about privacy and potential identity theft due to consumer

30 hours are considered “part-time” employees. Seasonal

confusion and the down-to-the-wire work still being done

or temporary employees who work less than 120 days a year

on the state exchanges. Buying health insurance through an

don’t count toward the total number of employees.

employer’s group plan would avoid these potential problems.

However, the hours the part-time employees work is pro-rated,

Although insurance companies can offer a number of different

so your part-timers count towards a FTE total. To arrive at this

plans with different deductibles and co-pays, they must offer

number, the total hours worked by your part-timers is divided

plans that meet the “essential health benefits” requirement

by 120 to arrive at their FTE number. As long as your FTE is

(these plans must offer coverage in 10 mandated categories,

under 50, you and your employees can qualify for small

including dental and vision insurance for children).

group coverage.
The plans will be represented by metals to make it easier for
What’s on the “exchange” website?

individuals to compare the coverage levels of the various

If you thought providing health insurance was already compli-

plans. Each insurance company must offer a “bronze” plan,

cated, the ACA promises to have you reaching for the aspirin

which offers coverage of at least 60% of expenses after the

bottle even more often. Even though 13 states will be running

deductible is met. For 2014, deductibles can be no more

a web-only healthcare exchange (with participation from

than $2,000 per person or $4,000 per family, and out-of-

the federal government), it’s possible that some exchanges

pocket costs may not exceed $6,350 per person or $12,700

won’t be ready to go live on Oct. 1, 2013, when employees are

per family. (These amounts will go up in future years.) These

supposed to be able to comparison shop healthcare plans.

deductible limits apply only to plans covering fewer than 50
FTE employees; larger employers can purchase plans with

The health insurance exchange website portal will collect

larger deductibles and out-of-pocket expenses.

information on an individual’s situation — including income
levels — then offer a selection of healthcare plans from which

Plans that offer more generous coverage also can be offered;

to choose. It’s also supposed to let individuals know if they’ll

the “silver” plan will pay 70% of expenses after the deductible

qualify for subsidies to offset the cost of healthcare premiums.

is met, while the “gold” and “platinum” plans will pay 80% and

If the plan you offer is “affordable” (in other words, their share

90% after the deductible, respectively.
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bake - October 2013

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