The Patient Protection and Affordable Care Act, signed into law on March 23, 2010, overhauls the nation’s health-care and insurance system. The employer mandate provision was delayed to a new effective date of January 1, 2015, for large companies and January 1, 2016, for companies with between 50 and 99 employees.
The ACA’s use of the 30-hour threshold for determining full time and full time equivalent employees and its complicated reporting requirements present significant challenges to our industry, which relies on short-term and variable hour employees. U.S. Representatives Todd Young (R-IN) and Dan Lipinksi (D-IL) introduced H.R. 30 in the House to would change the ACA’s definition of full-time employee to one who works 40 hours a week. U.S. Senators Susan Collins (R-ME) and Joe Donnelly (D-IN) introduced identical legislation in the Senate as S. 30. To ease the reporting requirements burden, U.S. Representatives Diane Black (R-TN) and Mike Thompson (D-CA) introduced H.R. 2072, the Common Sense Reporting Verification Act. U.S. Senators Mark Warner (D-VA) and Rob Portman (R-OH) introduced similar legislation in the Senate as S. 1996 with the same title.
This law is fundamentally changing the healthcare system as we currently know it. The following is a short summary of the employer mandate provision:
Employer Mandate: Firms with less than 50 full-time employees and full-time equivalents (FTE) (where, for example, 10 half-time employees equals five full-time employees) are not covered by the individual mandate. Large employers (with 50 or more full-time equivalents) that do not offer insurance to at least 95% of their employees will have to pay a $2,000 fine for every full-time employee in excess of 30 employees once one of their employees meets the qualifications for a federal subsidy to buy individual coverage through new health insurance exchanges that will begin operating in 2014. This is commonly referred to as the A penalty. If a large employer does offer coverage to at least 95% of employees but the cost of self-only coverage is unaffordable or fails to provide minimum value and an employee qualifies for a federal subsidy, the employer will be fined $3,000 per subsidized employee, with the fine capped at the amount the employer would pay if they simply did not offer insurance at all. This is typically referred to as the B penalty. Effective January 1, 2015.
Additional details on the ACA and the provisions that apply to convenience retailers can be found online at nacsonline.com/compliance.
NACS opposed the ACA and is working with the administration and Congress to ensure the law’s implementation will impose minimal burdens on convenience stores. NACS is working with various coalitions including the Employers for Flexibility in Health Care Coalition (E-Flex) to change the definition of full-time employee to one who works 40 hours a week and not 30 hours a week. E-Flex is a diverse group of members across a vast array of industries that tend to employ a large number of short-term and variable-hour employees. NACS and E-Flex are also working to make the reporting requirements on businesses less burdensome.
On January 8, 2015, one of the first actions of the 114th Congress was to pass H.R. 30. Unfortunately, the Senate has yet to take up the legislation. Furthermore, H.R. 2072 and S. 1996 were introduced just before the congressional recess in August 2015 and have not received legislative action.