Associations Consider Impact of ACA Employer Mandate
Plenty of change is in store under the provision of the Affordable Care Act that requires employers to provide health coverage to their workers. Associations should be preparing now for the new requirements.
After the IRS’s late-December release of new regulations under the employer “shared responsibility” provision of the Affordable Care Act, employers across the country—including associations—are studying what the rules will mean for them. Employers with 50 or more full-time employees, or full-time equivalents (FTEs), will face some significant changes.
“I think the most headline-grabbing change is that employers with 50 FTEs will have to offer full health insurance coverage to the employee and their dependents, which are now defined as children up to age 26,” said Kevin Kuhlman, manager of legislative affairs for the National Federation of Independent Business. “This is going to cause substantial change for employers that currently offer coverage to just employees.”
Organizations right around the 50-FTE threshold will need to be extra careful with their business and personnel decisions, said Kuhlman. The IRS introduced anti-abuse rules that caution employers against making major personnel moves—such as reducing workers’ hours or overusing temporary-staffing agencies or other similar services—to avoid the coverage requirement.
“I definitely think it’s going to make folks hesitate whether to expand, and maybe those just above the threshold want to shrink, while also complying with those anti-abuse rules,” he said. “But if you’re in that sweet spot between 40 and 60 employees, there’s going to be a big magnifying glass on you.”
Associations are in a unique position with the new requirements.
“They’re going to have to be both educational and be compliant at the same time,” said Kuhlman. “I think they’re going to be getting a lot of questions from their members—if they aren’t already. And association executives are going to have take inventory of their own personnel and their own benefit structure to ensure that it is affordable and offers coverage to dependents.”
While everyone is focused on 2014, when the rules become effective, employers should be preparing now, said Kuhlman.
“A lot of the inventory, planning, and determination has to occur this year,” he said. “The penalties [for noncompliance], which start in 2014, apply to an organization’s size from the year prior. So while groups need to remain focused on 2014, they also must realize that 2013 is the year of planning.”