A Health Care Reform Seminar hosted by the Greater Mount Airy Chamber of Commerce was attended by a room full of local business owners yesterday morning.
The seminar was conducted for business representatives from the area who had concern and confusion about the Affordable Care Act, which requires all businesses which have 50 full-time or full-time-equivalent employees to offer “reasonable health care coverage” beginning in 2014, or pay a penalty.
Of concern to area employees were the multiple questions posed by business representatives and owners about how to save as much money as possible, which included cutting some employee’s hours to less than 30 per week, since the act requires businesses to offer health insurance to employees who have 30 or more hours per week.
After an introduction and welcome by Betty Ann Collins, chamber president, the seminar’s sponsors, the Surry County Economic Development Partnership and BB&T Blue Ridge Burke Insurance, were recognized.
The guest speaker for the seminar was Jason Cogdill from Winston-Salem, a corporate counsel and benefits attorney with ProBenefits Inc., as well as a compliance adviser for employers and advisers regarding health and welfare benefit plans. Cogdill mentioned that he felt close to the area because his wife is originally from Surry County.
Cogdill said much of the confusion about the Affordable Care Act results from the length of the bill. According to Cogdill, it is more than 20,000 pages long, “if you consider subsequent laws and related topics,” in addition to the actual text of the bill.
“Employer Mandate Worksheets” were placed on each table and Cogdill instructed employers to fill out the worksheet during the seminar, in order to find out if the “50 or more full-time employee” mandate applied to their business.
The worksheet also included information about how to implement an “attack plan” and had categories for when the mandate will apply in 2014, how to calculate how many employees will be offered health insurance coverage, and a way to mathematically estimate the “potential penalties for not offering coverage to all full-time employees” as well as a section for “potential penalties for offering coverage that is not ‘affordable’ to full-time employees.”
According to Cogdill, the goal for the seminar was to help businesses “create a plan that is practical, helpful, and responsive.”
The specific mandate addressed during the seminar was of concern to businesses with 50 or more full-time employees, or full-time equivalent, in 2013. In order to calculate this, Cogdill said the business does not need to count 1099 or temporary workers, only employees who work each week; however, that does include seasonal employees.
In order to calculate this, Cogdill directed business representatives to calculate the total hours of non full-time employees and divide it by 120 hours per month; the result is added to full-time employee number for an overall total. If this number is 50 or more, the mandate must be applied.
Cogdill emphasized that employers are not required to offer health insurance coverage to those who have less than 30 hours per week, but the part-time employees’ hours must be totaled in order to determine the number of full-time equivalent employees.
In addition, Cogdill said the mandate also applies to non-profit organizations, churches and government entities.
The penalties for non-compliance were detailed for the employers who choose not to offer coverage to all full-time employees. This may include paying a fee of $167 per employee, per month, or employers who must pay more for their employees’ health care plans, in order to make sure the plans are no more than the 9.5 percent of the employee’s taxable income.
Businesses also must establish an “administrative period,” according to Cogdill, which is a period of time between three and 12 months in which the business must track the number of hours for each employee in order to determine who qualifies for full-time and who falls under 30 hours per week. This must be tracked on a yearly basis, even for employers who do not offer coverage.
This could be a way to avoid paying for health insurance coverage for some employees, said Cogdill, if they are seasonal employees, since the employer could extend the administrative period beyond the summer months and add three or four months in which the employee would have zero hours.
“You may need to adjust the measurement period just to make sure you are keeping them under 30 hours for an average.”
Individuals who do not have health insurance will be required by law to pay higher taxes. Potentially, those individuals who do not purchase insurance through their employer will go to an “exchange” where they will be able to review different insurance options.
North Carolina will not offer a health care exchange and has elected to drop out for the first few years, which leaves North Carolina citizens to fall back to the federal health care exchange portal, which is available online.
According to Cogdill, the health care exchange portal will guarantee availability to everyone and the rates are based on age, geography, and history of smoking.
When an individual fills out the paper work for health insurance through the federal exchange portal, the IRS will receive information about the employee and their employer, which will lead the IRS to investigate why the employee was not offered health insurance and this could lead to further penalties for the employer, according to Cogdill.
Any individual who has an income within 400 percent of the poverty limit may be eligible for a subsidy for their health insurance coverage, which also could fall back on an employer who does not pay enough for the employee’s coverage.
Cogdill also said that many people will be frustrated when filling out the paperwork on the federal health care exchange portal, because it is “very long” and may be 20 or more pages, so many individuals will “not do it” because of the length.
In addition, Cogdill said that employers are not required by law to offer coverage for a spouse, but they are legally required to provide coverage for employees’ children age 26 and younger, although they are not required to pay for part of the coverage for the children.
Cogdill was accompanied by a slide-show, but he spent the most time answering questions from concerned business owners and representatives.
One of the questions posed by an area business owner: “Could we drop all insurance coverage and choose to pay the penalty instead?”
Cogdill answered that yes, because the financial impact of providing health insurance could greatly exceed the penalties, but the penalties may increase in the future for employers who do not comply for 2014.
One member of the audience recommended that area employers should consider their employees as they look toward compliance with the Affordable Care Act, because they “could risk losing good employees” if the business does not provide adequate pay, hours, and affordable coverage.
Reach Jessica Johnson at firstname.lastname@example.org or 719-1933.