Smart Benefits: Employers Need To Prepare For Health Exchanges
Monday, October 29, 2012
What will be on employers’ to-do lists? First and foremost will be notifying employees of possible opportunities to enroll in the exchange. But determining just who is covered is the bigger issue.
Eligibility for Coverage
When the exchanges are implemented, employers will need to understand how many employees will qualify to leave employer coverage and how many will stay on. But there’s a new way to calculate eligibility for full-time employee coverage that complicates the equation – and may cause employers with more than 50 employees to offer coverage to more workers than they do today.
Coverage Adds Up
Employers will now have to include within the definition of full-time employee (for benefit purposes) those who work an average of 30 hours a week in a month. This means that if an employer offers adequate coverage (as defined by PPACA) and an employee who meets this new definition of FTE is not eligible for the exchange because they’re not income eligible for the federal subsidy, the employer will have to offer them coverage.
Those employers who previously considered only those employees eligible who worked more than 30 hours a week (i.e. 32 hours or 40 hours) may now have to cover more employees -- exposing the organization to additional costs.
Who Will Feel the Impact?
Employers who have a lot of part-time and seasonal employees, and previously didn’t have to worry about offering them coverage, including industries like hospitality, tourism, social service organizations, healthcare providers, and retail, will now have an added financial burden of adding these employees. For these employers, many of whom are small, the impact will be huge.
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