AUGUSTA, Maine - In 2015, the Affordable Care Act's so-called "employer mandate" kicks in. Companies with 100 or more full-time equivalent workers must offer health insurance to at least 70 percent of their employees.
The following year, businesses with 50 to 99 employees must also offer insurance. Behind these mandates are complicated requirements that some businesses are struggling to comply with. And a Maine State Chamber forum in Augusta today attempted to provide some answers.
Harrison Clark is president of ServiceMaster Contract Services in Bangor. He has 60 full-time equivalent employees, which means he's got another year before he needs to comply with the employer mandate. But Clark says he'll need all the time he can get to figure out how to help his employees get health insurance and still stay competitive in the cleaning business.
"Because if I go to my customers - some of whom are in this room - and say, 'It's going to cost $3 an hour for health insurance for my employees if I buy it as the employer and make it affordable. I need you to pay me more.' They of course turn around and say, 'XYZ company will do it for less.' "
While Clark has until 2016 to decide what to do, other businesses - those with 100 or more full-time equivalent employees - must meet the employer mandate next year, in 2015. The key phrase here is "full-time equivalent," because, says the president of Cross Employee Benefits, Michael Deschaine, some employers who don't think they fall under the mandate actually do.
"So here's an example. So we have a restaurant," he says. And let's say that restaurant has 20 full-time employees - those that work 30 hours or more - like managers, owners and cooks. But they also have a lot of part-time wait staff. That restaurant needs to add all those part-timers weekly hours together and divide by 30 to see how many amount to "full-time equivalents."
"Many of these will easily fall into the applicable large employer category, at least at the over-50 level, and for some even at the over-100 level," Clark says. "So aggregating and properly identifying employees once again becomes a vital part of this whole law. And that's really one provision that's not well understood."
Employers that fall under the mandate but don' t offer insurance face fines of $2,000 per employee, excluding the first 30 employees. And if an employer does offers health insurance but it's not considered affordable, there's a $3,000 penalty for every employee that instead goes to the online marketplace and receives a subsidy.
If all these requirements make your head spin, you're not alone. "I think the number-one thing I would recommend is to have some advice," says Katie Mahoney, the executive director of the U.S. Chamber of Commerce. "Get a lawyer. Get a CPA and someone that knows this stuff and is following this stuff, because it changes day to day. And significantly changes day to day."
Mahoney says she's keeping an eye on the outcome of a pending Supreme Court case that will decide whether states with federally-facilitated marketplaces can award subsidies. Mahoney says if that provision of the law is struck down, it would eliminate the penalties for employers in states like Maine that don't have state-based exchanges.
"Recall that the penalty is triggered when a full-time employee goes to the exchange, says, 'I don't have affordable minimum value coverage through my employer and I should,' and therefore gets a premium tax credit," Mahoney says. "If there are no premium tax credits awarded, that trigger would never happen in those states."
Mahoney says it would be unfortunate for the citizens of states that didn't create state-based exchanges to pay the price and lose access to affordable health insurance.
