Three Major PPACA Provisions That Will Impact BSCsBy Perry Heidecker
On June 28, 2012, the United States Supreme Court affirmed the constitutionality of the Patient Protection and Affordable Care Act (“PPACA”). The Supreme Court held that the imposition of health care regulation fell within Congress’s power to tax businesses and individuals.
Although employers are currently awaiting publication of interpretive regulations from several federal agencies, they would be well advised to become familiar with PPACA’s requirements and start planning their measures to comply.
Several provisions of the law have already gone into effect. For example, health insurance carriers can no longer exclude applicants with pre-existing medical conditions. Also, dependent children can be included under their parents’ policies up to age 26.
Several other important provisions of the law will become effective on staggered dates extending through 2014. Among the most significant of these are:
• Pay or Play. Effective January 1, 2014, “Large Employers” (those with 50 of more full-time employees or “full-time equivalents”) will be subject to penalties for failing to provide health care coverage to full time employees (those employees who work thirty or more hours per week). The penalties will be imposed if an employee obtains subsidized individual health coverage from health care insurance exchanges that will soon be created under the law. The penalty will be $2,000 per full time employee multiplied by the number of full-time employees minus 30. Businesses with fewer than with 50 of more full-time employees or full-time equivalents will not be subject to these penalties.
• Automatic Enrollment. Employers with more than 200 employees must automatically enroll their full time employees. Individual employees can opt-out of coverage under certain conditions. The effective date of this provision will be established by administrative regulation.
• W-2 Reporting. Employers will be responsible for reporting the total annual cost (including both employer and employee paid portions) of health care benefits on employee W-2 forms. Employers that issue more than 250 W-2”s must include this information on W-2 forms for calendar year 2012. Smaller employers will be required to include this information on W-2’s for calendar year 2013.
PPACA includes many, many more requirements. This brief summary just scratches the surface. Smart employers will start consulting with their insurance brokers and employment lawyers very soon to chart out their road to compliance.
For more information on how PPACA may affect building service contractors, click here.
Perry Heidecker is senior counsel for Milman Labuda Law Group PLLC, Lake Success, N.Y. The firm is a full-service Employment Law practice focused on counseling, preventive advice and training, policy and procedure design, representation before administrative agencies, litigation, and appeals.