Understanding The Affordable Care Act (ACA)
Vol. 3 No. 8
Obamacare, the Affordable Care Act (ACA), the Health Care Reform Act—heard enough yet? Confused? Join a very large club!
Politics aside, while the process may not be fully formed, the pieces not fully ready, and detailed intent fully clarified, health care changes are going to happen effective January 1, 2014. So, what do you need to know? What does your school need to do to be compliant … NOW?
To begin, 50 full-time equivalents employees (FTE) is the demarcation line for the Act. If you have 50 or more full-time employees, you must comply—or pay the penalty for not doing so.
Regardless of size, you can choose to comply or ignore the ACA changes—you do have a choice. Some organizations have indicated they may not comply and allow employees access coverage through the Exchanges (a.k.a Marketplace) assuming they’re up and running. You might even be considering not offering health care coverage once the Affordable Care Act is implemented, instead opting to pay the resulting penalties (which may in fact be less than your school’s contributions to the cost of insurance).
There are predictions that, due to the common rating approach and guarantee issue of the ACA, many employer-sponsored premiums will rise between 25% and 40% in 2014. Wait, don’t panic yet. This will depend in part on your current demographics. For example, if you have a very young group of faculty and staff members, you’ll be on the high side of this. However, if your school has an older group of employees, say an average age of 52, you will be on the lower end—and could possibly even see a decrease!
For most schools, these choices raise both “moral” as well as practical questions. You might be thinking, “What is my duty as an employer to my employees and their families?” Or, “Can our school budget afford/support these mandates?” And most likely, “What might happen if we no longer offer coverage, will that affect our ability to retain and attract the ‘best and brightest’?"
Financial realities, emotion, and expectations will influence the answers to these questions.
Ok, now what? First, unless you have 50 or more full time employees (or the equivalent) you do NOT need to worry about the ACA in 2014. You will need to be focused on changes that will affect your school in 2016. And, if you offer no plan currently, the Exchange (a “marketplace” underwritten by the Federal government, state, private insurance carriers or all three) may be an option for you and your employees. However, regardless of your status, you must notify your employees of the Exchanges by October 1, 2013.
The flow chart to the left from the Kaiser Family, offers a visual of how you can determine if (1) you need to comply, (2) how to comply, and (3) what happens if you do not.
Additional ISM articles of interest
Private School News Vol. 11 No. 4 Health Care Reform 2013-2014
Private School News Vol. 11 No. 5 Health Care Reform and the Effect on Health Flexible Spending Accounts and Health Reimbursement Arrangements
ISM Monthly Update for Human Resources Vol. 11 No. 9 Health Care Reform, Exchanges, and School Culture
Additional ISM articles of interest for Gold Consortium members
I&P Vol. 35 No. 7 Health Care Reform: What Schools Need to Know Now