ACA Questions and Answers: Part 1
Can I have different benefits for my managers/executives versus my shop/administrative staff?
One of the sets of regulations that hasn't been published yet includes the fully-insured non-discrimination regulations. Until they’re published, they aren’t being enforced (kind of goes without saying). So, if you’re fully-insured (you buy your coverage from a health insurance carrier) then yes, you can for now. If you’re self-funded (you pay your own claims, typically through a TPA), then no, you can’t – because your non-discrimination rules don’t allow for it. Those rules pre-date the ACA but haven’t been eliminated or modified yet.
I hear the final regulations changed things – so who’s a variable hour employee?
We get this one a lot, for a lot of different reasons. The answer is pretty simple: a variable hour employee is one who – at the time of hire – you can’t reasonably determine whether or not the employee will meet the required 30 hours of service average on a weekly basis. Importantly, just because you don’t know how many hours the employee will work isn’t sufficient – if you know that it will be at least 30, then they’re not a variable hour employee. If you don’t know, but it’ll be less than 30, then they’re also not a variable hour employee. They need to be in a position whose hours will truly vary in a less than predictable manner.
The new regulations say I won’t be penalized if I offer coverage to only 70% of my full-time employees – how do I determine who to offer coverage to?
This is a good question, but the answer isn’t what you may think it is. The intent of the 70% threshold – as opposed to being 95% - isn’t meant to allow employers to pick who not to offer coverage to. Instead, they’re simply giving employers a little more “wiggle room” to meet the requirement to offer a plan to employees and therefore satisfy the first requirement of the employer mandate. If you hit 70%, great – no penalty. You’re still required to offer coverage to all full-time employees in 2015 (2016 for employers with 50 – 99 full-time equivalent employees). And guess what – if you have a full-time employee go to the Exchange and get subsidized coverage, you still get hit with the $3,000 “Part B” penalty.
The release of the final regulations gave us quite a bit of clarity, but also continues to raise new questions. Those will be addressed eventually, but in the meantime employers should be taking steps now to “reasonably interpret” the gray areas and take the last steps needed to get into compliance.
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