Health Care thoughts: PPACA Employer Mandate Part 1
Health Care thoughts: PPACA Employer Mandate Part 1
So I am trying to put together a template for evaluating the employer health insurance mandate under PPACA….
Some preliminary thoughts:
50 employees does not mean 50 employees, there as a Full Time Equivalent (FTE) calculation that is certain to confuse employers because it is different than any other FTE calculation we have ever seen.
In the process of avoiding penalties employers need to obtain information about household income and number of persons in the household, but obtaining the information could be difficult and verifying the information could be impossible. Asking for the information before hiring could be illegal (opinions vary so far). Monitoring changes will be very difficult. And how will the government gather and update this information?
Smaller employers say 40 to 200 head count (or FTE) without sophisticated HR resources are going to be really confused.
This is gonna be interesting. Any thoughts from the Bears?
Rusty
From an e-mail from guest contributor Michael Halasy:
We don’t necessarily know either. My research (Operations Research with a Workforce focus) is modeling many of these changes (stochastic, variable, simulation, etc.). I think Tom’s point is correct in that this will get interesting. We need better modeling data to determine this. A good friend is a senior fellow at Lewin, and I know he is doing a lot of this modeling now (impact of ACA on companies, physician practices)…..I think it’s simply too early right now…
Minor update, apparently it may be legal to ask current employees for household income (not the tax return) on some sort of worksheet, as some government employers do this in order to eliminare high income spouses from coverage (news to me).
Very preliminary though.
And how to verify the data – I dunno. Goingt o search for administrative regs that I may have missed.
Whats this 50 FTE limit for?
The penalties for lying better be high, because people are going to lie when asked about their family finances. (a) They will figure it’s not their boss’s business and (b) they will figure the information can be used against against them. (We’re cutting your pay, Brad, because your wife has a good job.)
A bottom limit of applicability exempts very small businesses and self-employed people from the law, thus reducing their HI liabilities. In regard to income verification, don’t know how you can do it easily except based on the employee’s allegation. If you go by declaration alone, the income estimate is accepted at face value and never verified. Anything else would be TMI for employment purposes, I think. The govt is paying the subsidy so the burden should be on it to find errors in estimates or intentional mistatements of them. Otherwise, welcome to welfare. I wrote a post about means testing a while back. It’s no way to run a program, I can tell you.
And, the govt uses 2080 hours of work as an FTE equivalent. There should be a statutory definition of FTE in the law. In any event, the federal govt. uses .5 of an FTE for part time employees. IIRC. NancyO
Right.
So employers only have to worry about this if they are trying NOT to offer coverage to their employees?
If so its not really “the process of avoiding penalties” straight up, its “the process of avoiding offering coverage or paying penalties”.
ITtappears the PPACA definition of calculating FTE is different than the IIRC definition – just to make us crazy.
I am not doing anything nearly as sophisticated as Michael, who is way smarter and more current than me (I did my operations research matrices with Basic programming on punch cards with 24 hour turnaround).
My goal is to have some sort of model so a CPA can sit down with a client and explain what is about to happen. Or a controller can explain this to his/her boss.