Employers Versus the Patient Protection and Affordable Care Act

7/20/2013 7:00 AM

M ost will know this law, passed back in 2010, as “Obamacare.” But to health care providers and employees of the U.S. Department of Health and Human Services, the U.S. Department of Labor, and the Internal Revenue Service, it is known as “PACA.”

If you are a person or an employer in the United States, you will be hearing quite a lot about the law in the coming months. “Full Implementation” kicks off Oct. 1 with the activation of the Health Care Exchanges that are now called Health Care Marketplaces.

My goal today is limited to providing a view of the law as it affects employers at the most basic level of “Does it affect me?” Don’t look for much detail, I only have space for really big picture items.

Before I can say anything a small vocabulary lesson is needed. You need to know the definition of the following:

Small employer — These are employers with fewer than 50 “full-time equivalent” employees.

Large employer — These are employers with 50 or more “full-time equivalent” employees.

Full-time employee — This is an employee that worked 30 or more hours per week.

Part-time employee — This is an employee that worked less than 30 hours per week.

Full-time equivalent employees — This is the sum of all full-time employees (that each count as 1) plus all of the hours worked by part-time employees divided by 120.

Seasonal workers — No, these are not the ag seasonal workers we all know the definition of; these are all workers in seasonal jobs (regulations/definitions are not out yet) that work less than 120 days for an employer, and they are excluded from the full-time equivalent employees calculation above.

Confused yet?

The short answer to the big question of, “Do I have to pay for health care insurance for my employees?” is complex, but it does begin with determining if you are a small employer or a large employer.

If you are a small employer, you have no responsibilities under the act.

If you are a large employer, you most likely will have responsibilities under the act.

My experience with farmers tells me that perhaps as many as 90 percent will be classified as small employers. Without doing any math or worrying about any definitions, if you do not have at least 50 employees to whom you give a W2 each year, you cannot be a large employer. Give out more than 50, and we have some math to do.

Note: Regardless of where an employer may think they fall, all employers need to have a meeting with their accountant because being wrong will be expensive. So many of the regulations have yet to be finalized that PACA is currently a “moving target.” Further, no one should conclude from anything in this article that they are not part of the mandate and this is certainly not any type of legal advice for any operation.

Editor’s Note: Michael Evanish is the manager of MSC Business Services, a member service of the Pennsylvania Farm Bureau.

For more information call 717-731- 3517.

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