Companies Evaluating Ways To Comply With ACA’s Coverage Rules
Many businesses that rely on low-wage workers -- such as fast-food restaurants -- are reassessing their business models in light of the Affordable Care Act's mandate that they provide all full-time employees with affordable health insurance by 2014, or pay a penalty, the New York Times reports (Abelson/Greenhouse, New York Times, 11/30).
Under the health reform law, companies with 50 or more full-time workers beginning in 2014 will be required to offer a minimum level of health coverage or pay a penalty, starting at $2,000 per full-time employee after the first 30 hours.
If a company offers health insurance that is found to be minimal or unaffordable, the company will be required to pay a penalty of $3,000 for every worker who receives a federal subsidy to purchase health coverage on the individual market (California Healthline, 11/5).
Companies Reassessing Business Models
According to the Times, companies are examining ways to comply with the ACA's requirements and absorb the increased costs.
Some employers are trying to determine whether they should cover all their employees or pay the fines -- which some consider a more cost-effective strategy -- and risk losing employees to competitors who provide health benefits, the Times reports. Alternatively, other companies are considering layoffs or shifting their current full-time employees to part-time status.
According to a recent Kaiser Family Foundation study, just 28% of companies that employ large numbers of low-wage workers offer health benefits to all employees. In most cases, those workers have annual salaries of $24,000 or less and cannot afford the $6,000 on average that is required for an individual employee health plan, the Times reports (New York Times, 11/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.