As time runs out for businesses to comply with the Affordable Care Act, which in 2014 requires employers with 50 or more workers to either offer health insurance or pay penalties, businesses are flocking to seminars to learn how to comply with the law's complex rules.
Today, the New Jersey Business & Industry Association drew 275 to the Pines Manor, in Edison, for the first of three ACA seminars it will offer this year; a webinar earlier this week sponsored by the state Chamber of Commerce drew 75 participants.
Vaughan M. Reale, executive vice president of CBIZ-ABP Benefits, answered detailed questions about the ACA, and noted the implementation “is changing weekly” as the government issues regulations. He said employers can use any six-month period in 2013 to calculate whether or not they have more than 50 employees, and thus are subject to the law.
“I have some employers who have done the test, but they don't know if they are large or small; we will test again,” Reale said. And he said it's important for employers to understand that if they own several different businesses, the employees in all must be added to determine if the employer is over 50 and subject to the ACA.
Reale explained that employers who offer health insurance can't require the employee to wait more than 90 days to join the health plan. An employer who requires employees to pay the full premium for the first year can continue with that policy — but the result may be that the coverage is not affordable as defined by the ACA, which could make the employer subject to penalties.
He noted that under the ACA, affordable coverage means that the lowest-paid full time worker in the company does not pay more than 9.5 percent of their annual wages on premiums. He said it is likely that many employers will decrease benefits to keep them under that affordability standard.
“Insurance premiums are going up,” Reale said, partially driven by the law's enhanced new coverage requirements and the new taxes it imposed.
Attorney Steve Timoni, of K&L Gates, who fielded employer questions on the New Jersey Chamber of Commerce webinar, said even though employers with fewer than 50 employers are not subject to the ACA, they are likely to be affected by it. The ACA's individual mandate requires individuals to get coverage or else pay a penalty. “I think you are going to have employees going to their small employers and saying, 'Have you thought about offering coverage? Because I have to buy it.' ” Even if the employer isn't required to offer coverage, it may become a factor in the competition for employees.
“Now you have two companies in town, one that doesn't offer the benefit and the other that does,” Timoni said. “That will create competition. The company that doesn't (offer coverage) may now find itself in a tough place hiring.”