A business owner I’ll call Mr. Brown thinks he has cracked the code. He has overthought his way to flying under the radar on Health Care Reform, PPAACA, ACA, Obamacare . . . or whatever you want to call it.
He thinks he cracked the code, but I think his idea’s cracked. Let me tell you what I mean.
Mr. Brown runs a company within the transportation industry and has nearly 75 people working for him. He offers a full benefits package to his staff, for which he pays nearly 90%.
His idea? Simply split up the company into separate, stand-alone entities, each containing fewer than the 50 Full-Time Equivalent employees the law (which takes effect 1/1/2014) mandates. With each entity employing fewer than 50 employees, the Affordable Care Act would be all but forgotten. Not so fast Mr. Brown!
First of all, there is a loophole-closer written into the plan: for affiliated or commonly owned companies, employees will be pooled for the purpose of calculating Full-Time Equivalents. So maybe Mr. Brown and every other employer out there with close to 50 full-time employees should either cut everyone’s hours to less than 30 or shut their doors?
All this ruckus and strategizing really is for naught. Mr. Brown is already doing everything he needs to do to remain in full compliance with the PPAACA. His company already offers health care to its employees and pays 90% of that care, leaving employees to pay less than $50 per month for individual coverage. His HR provider ensured that Summaries of Benefits and Coverage were distributed to his staff at renewal time, and the W-2 reporting requirements of employer-sponsored contributions were fulfilled in 2012 and will continue to be met in years to come. Sure, he may need to work the annual deductible on the plan down from $3000 to $2000, but his company is, for all intents and purposes, already compliant and has been for many years.
This is true for a vast majority of my client base.
Although certain industries—such as staffing, restaurants, and home health care—will undoubtedly be hit hard by Health Care Reform, a vast majority of businesses will simply continue to do what they have always done: provide a livable wage and benefits for employees and their families so that they can attract and retain competitive talent.
We can all argue about how rates are going to skyrocket even further and products and services are going to increase in cost to cover additional compliance expenses, but why waste time and energy in speculation?
Let’s continue to do business and generate profit. As always, we will learn to navigate in the current political and legal environment.
If you are interested in learning more about Health Care Reform, its mandates or how it applies to your specific business situation, feel free to reach out to me directly at Axiom Human Resource Solutions.