labor lawAdivision of labor law center

According to industry experts, the healthcare reform signed into law on March 23, 2010 and amended earlier today will have wide-reaching effects on employers nationwide.

 

The greatest change for HR pros and employers under the Patient Protection and Affordable Care Act will come from penalties to employers who fail to provide group health insurance. The law technically stops short of a mandate, because it does not require that employers provide healthcare benefits to workers. However, companies that fail to offer health care coverage will have to pay a penalty of $2,000 per employee beginning January 1, 2014. The law makes an exception for small employers, as the first 30 workers do not count towards the penalty.

 

If the employer offers health care benefits, if even one employee applies for a federal subsidy to purchase individual health insurance, the employer may be fined $750 per person, under the law signed by President Barack Obama.

 

One important change involves how employees are enrolled in healthcare plans. Under the new system, employers with 200 or more employees will automatically enroll new employees in the group health insurance. Employees will have to intentionally opt out of the plan, in order to not receive healthcare.

 

The law also includes provisions to make healthcare coverage more affordable for low-income workers, according to the Society for Human Resource Management or SHRM. An employee who earns less than four times the federal poverty level will have the option of buying health insurance through a health care exchange.

 

Small business owners and employees will have the option of purchasing health insurance through an exchange, which will offer lower rates for insurance than currently available. So-called SHOP exchanges, or Small Business Health Options Programs, will be available to employers with 100 workers or less.

 

When an employee chooses to purchase healthcare through an exchange, the employer must provide a free-choice voucher. With the voucher, the employer promises to pay an amount equal to the cost of healthcare benefits to other employees. This provision is designed to promote competition in the health insurance field, resulting in better care and lower prices.

 

While a number of these provisions go into effect in 2013 or later, two parts of the bill go into effect during the next benefit year. Those include provisions that will require healthcare plans to cover pre-existing provisions, and to offer preventative care.

 

Buy 2014, individuals will be required to purchase health insurance, and middle-class workers will receive tax credits for doing so.

 

Any employee with a religious objection to healthcare coverage will have the ability to apply for a waiver. Additional waivers are available to those who cannot afford coverage. Those without coverage or a waiver would pay penalties beginning at $95 in 2014 and rising to $750 or more in 2016.

 

While the healthcare reform law provides grant to employers who offer wellness programs to all employees, it eliminates financial incentives to employees who participate in such programs.

 

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