Petrogram - Spring 2011 - (Page 23)
How Health Care Reform Will Affect Your Business
Ken Stevenson, Earl Bacon Agency
fter I graduated college in 1982 I had numerous job interviews trying to start a career. After returning from each one, my dad would always ask me about the benefit package the firm had. You see, back then health insurance was a benefit. It was the icing on the cake used by employers to attract the best employees. Since then, health insurance has gradually been viewed as more of an entitlement, and even a right, by many. Employees have come to expect employers to provide health insurance. On March 23, 2010, the Patient Protection and Aﬀordable Care Act was signed into law. Various provisions of the law went into eﬀect immediately. Many provisions went into eﬀect in 2010 and others become eﬀective in 2011, 2012, 2013, 2014 and 2018. PPACA conﬁrms
that health insurance for employees is no longer a beneﬁt but rather a responsibility of the employer (namely employers with more than 50 employees). Two provisions in the PPACA may already impact your business. While the PPACA was not signed into law until March 23, 2010, one of the provisions aﬀecting small business went into eﬀect retroactively to January 1, 2010. A tax credit of 50 percent of the premium is available for qualifying businesses with fewer than 25 employees. The average salary must be $50,000 or less. This credit is available retroactively to January 1, 2010. One of the most talked-about provisions of the new law is the grandfathering rules that were announced on June 17, 2010. These regulations spell out the rules for keeping your current plan and what
PPACA confirms that health insurance for employees is no longer a benefit but rather a responsibility of the employer.
provisions of the PPACA would not apply to grandfathered plans. One of the provisions of grandfathering that could have an impact on your business is the requirement to comply with the non-discrimination provisions of IRC rule 105(h), which went into eﬀect on September 23, 2010. This rule states that a plan cannot discriminate in favor of highly compensated employees or owners. There are two scenarios in which this type of discrimination happens regularly in today’s beneﬁt plans. First, some businesses oﬀer their health plan only to owners, supervisors or some other similar select group of employees. These are typically referred to as management carve-outs. Under the PPACA, if that group is comprised of employees who are predominantly owners and/or employees who are considered highly compensated, the plan will be in violation of IRC 105(h) and the business can be ﬁned $100 per day, per person for non-compliance. Secondly, if a business does oﬀer health insurance to all employees but contributes more for those in a select group, then if that group is comprised of employees who are predominantly owners and/or employees who are considered highly compensated, the plan will be in violation of IRC 105(h) as well and subject to the same non-compliance ﬁnes. New regulations are being announced each month, so make sure your business is in compliance. If you need help or want a free copy of our guide to Healthcare Reform and its Eff ects on Business, contact me at the Earl Bacon Agency at 850-878-2121 or e-mail me at firstname.lastname@example.org. ❍
Table of Contents for the Digital Edition of Petrogram - Spring 2011
Petrogram - Spring 2011
Meet Your New Executive Director
FPMA Chapter Meetings Are a Success!
FPMA Member Spotlight
You’ve Been Sued and Your Insurance Company Denied the Claim: Now What?
Out & About the Industry
How Health Care Reform Will Aff ect Your Business
Create Competitive Disruption Th rough the “8 Ps”
Index of Advertisers/Advertiser.com
FPMA Featured Advertiser Marketplace
Petrogram - Spring 2011