Healthcare Reform: Employer Responsibility

As the fully implemented Healthcare Reform provisions go into effect on January 2014, employer responsibility becomes a national issue. Although there are some pieces of Healthcare Reform that have already started to change, the brunt of the law and its implications are waiting in the wings.

Large groups and their employers play a major role in the effectiveness of the law. While most large group employers do offer health insurance options, they must keep in mind that non-compliance with the law is not an option. If they do not comply, stiff penalties will result. Large group employers now carry a certain amount of employer responsibility that has never been an issue.

Additionally, employers of large groups will now have to report their health care coverage compliance to the IRS, ensure all employees are notified about health care exchanges available, and run the risk of getting into serious trouble if they completely ignore the law. Employer responsibility is no longer a choice, but a requirement that all employers of large groups must adhere to.

For more information on employer responsibility and how your large group organization must comply with the laws, contact Bernardini & Donovan Insurance Services.


Controlling the “Play or Pay Penalty” Under Healthcare Reform

When preparing to comply with the new Healthcare Reform law, large employers should recognize the implications of non-compliance as it relates to the play or pay penalty. If your organization has over fifty full-time employees and they were there in the preceding year, you must offer an adequate health care insurance option to them or pay penalties. What does this mean?

It means that if you are a large corporation, your penalties will be assessed based on the recorded number of full-time employees. The pay or play penalty can be calculated in a variety of ways. If you have a number of subsidiaries, your calculations would be different than that of a company with just one major corporation and all of the full-time employees working under that entity. This penalty applies to the corporation or entity that failed to provide “affordable” coverage, which is the main stipulation of the law. If your corporation offers this coverage, then you are in compliance and will not face these penalties.

For more detailed information on the pay to play penalties and how it could affect your organization, contact Bernardini & Donovan Insurance Services.


How the Play or Pay Penalty Works

One of the upcoming changes included in the healthcare reform bill is what is known as the Play or Pay penalty. It’s aimed at larger businesses with a certain amount of employees, and it is not exactly straightforward. An employer can offer health insurance , but, it must be “affordable”.  The idea behind the penalty is to offset the cost of insurance for each employee that uses the public health care plans.

The specifics for the Play or Pay penalty are as follows:

  • An employer that has 50 full-time or full-time equivalent employees (IE 100 part-time employees) must offer what is known as “affordable” coverage to all qualifying employees.
  • When an employer does not offer health insurance to all employees, an annual tax of $2,000 for each full-time employee if one employee gets federally-subsidized coverage.
  • In the case an employer does not offer “affordable”  coverage to full-time employees, and one employee gets coverage through the exchange, the      employer must pay an annual tax of $3,000 per subsidized employee who gets coverage through the exchange.

For all of these rules, the first 30 full-time employees are exempt from the penalties.

If you are in the Redlands area, or throughout California, contact Bernardini & Donovan Insurance Services for more information about how the penalties can affect your company.


Healthcare Reform: How does it affect large groups?

The new Healthcare Reform policies will affect everyone in different ways. Large and small business owners will definitely be affected, as well as health care organizations. As a large group employer, which is an organization that have over 50 full-time employees, you may already offer an insurance option to your employees. If you don’t, you will definitely be required to as the full policy goes into effect January 2014. What does this mean?

If you do not comply with federal regulations and provide an adequate health insurance option, you will pay stiff penalties. You have to offer it to at least ninety-five percent of your employees and prove it, even if they choose to opt out of the program.  Make sure to keep proper documentation. If you don’t currently offer an adequate health insurance plan for your employees, now is the time to start looking for one. It may save you a lot of time and money in the long run.

For more information on insurance options and the law, contact Bernardini & Donovan Insurance Services.