By Tommy Eden, Constangy, Brooks & Smith, LLP
1) Step 1: “Strategically” decide to “Go or Stay Small”
• Applicable Large Employers who have 50 FTEs must offer health coverage to all full-time employees or face fine.
• Must correctly identify the "employer group" to correctly apply the rules (i.e., "who is the Employer" - IRS controlled group rules apply)
• Go small by:
ü
contracting out distinct business functions
(SWOT analyses)
ü
use Staffing Service
ü
break-up controlled group (within IRS
Attribution Rules)
ü
reduce size of workforce
ü
sell your business
ü
sell parts of your business
ü
use part-time and variable hourly employees
(still may be Applicable Larger Employer but no fines)
ü
solicit wise counsel so what you do will truly
make a difference
2) Step 2: Count the Cost
• show NFIB online calculator
• http://www.nfib.com/advocacy/healthcare/credit-calculator
• explain with example
• what is your number?
• then evaluate whether to play or pay - nondeductible $2,000 penalty for all FTE's -30 vs. anticipated cost of providing plan (make reasonable assumptions about who will take the plan if offered and how much cost will increase -- i.e., will a significant number really take the plan if offered, or will participation stay relatively stable).
3) Step 3: Update your employee handbook
• full-time for ObamaCare mandate is 30 hours a week
• coverage not mandated for part-time, temporary, seasonal and variable hourly employees so must obtain handbook in job classification information in the new hire packets (look-back measurement periods)
• carefully review leased employee arrangements
• confirm that independent contractors are really IC's and not EE's as improper classification can lead to big problems
• providing other benefits not mandated for traditional classification of full-time but must specify such in your handbook and also benefit proration
• benefit disclaimer language critical to allow quick pivots on benefit related issues
• move benefits to separate explanation of benefits booklet and out of handbook
• sole authority to interpret benefits eligibility and “bad boy” disqualification language can be most helpful
• Plan Design Choices for Groups Under 50
o
Keep
everything “as is”. Cover issues like “grandfather rules” and notices that
still apply in ACA.
o
Purchase group insurance through the SHOP
Exchange to qualify for the company tax credit.
o
Change to a self insured group plan to avoid
taxes (can go down to 10 participants).
o
Terminate group plan but replace with a defined
contribution amount for health expenses so employees qualify for Federal
subsidies through the Federal exchange.
4) Step 4: Give your employees a 2015 HSA
• moving to consumer driven healthcare
• health savings account highly favored as best way to keep loyal employees
• Example HSABank information http://www.hsabank.com/hsabank/employers
• use Q&A materials from website
• monthly payroll contributions
• IRS has over 40 medically accepted expense categories
• use a visa charge card or pay with a check
5) Step 5: Adopt wellness plan
• start with a smoke-free campus, store or shop
• individual health risk assessments
• individualized wellness plans
• rewards can be participatory v. contingent
• Challenge goals with reasonable design
• carrot and stick approach with incentives and penalties; can be up to 30% of total cost and 50% for smokers with measurable ROI
• App-based wellness tracking www.wellworksforyou.com
• written wellness plan covering privacy and compliance
• know your alphabet: HIPAA, ADA, EEOC, GINA, DOL, IRS
6) Step 6: Contractually Protect your Business Another significant ACA issue for those who use staffing company employees, are recent ACA IRS interpretations that a Client employer must be able to prove that the staffing company employees were offered affordable health care coverage. For purposes of the pay-or-play mandate, when the client is the common law employer, an offer of coverage made by the temporary staffing firm "on behalf of" the client employer will be considered to be an offer of coverage by the client employer. For an offer of coverage to be "on behalf of" the client employer, the client employer must pay a higher fee to the temporary staffing firm for those employees who enroll in the temporary staffing firm's plan. For example, if the staffing contract provides for a flat fee per employee placement irrespective of whether the employee enrolls in the staffing company's coverage, the employer will not be considered to have made an offer of coverage. This could lead to exposure to the Client employer under the pay-or-play mandate's $2,000 per full-time employee "no coverage offered" penalty if more than 5% of its full-time employees (30% in 2015) are employed through the staffing agency.
Tommy Eden is a partner
working out of the Constangy, Brooks & Smith, LLP offices in Opelika, AL and
West Point, GA and a member of the ABA Section of Labor and Employment Law and
serves on the Board of Directors for the East Alabama SHRM Chapter. He can be
contacted at teden@constangy.com or 334-246-2901. Blog
at www.alabamaatwork.com with expanded
Common Sense Counsel and follow on twitter tommyeden3
