A new battle is beginning over President Obama’s Affordable Care Act (ACA) and making headlines nationwide as some health insurance companies are allowing millions of United States citizens to renew their current coverage for another year and delay compliance with new federal healthcare law changes throughout most of 2014, the Los Angeles Times reports. According to the article, a relatively unknown loophole in the legislation is letting health insurers extend existing policies for most of next year. This action is disparate from the widespread belief among many Americans that all health insurance providers will begin complying with legislation on January 1, 2014.
The ACA affects public and private sector employers
In a nutshell, the ACA mandates any employer with a staff of at least 50 employees who work full-time – 30 hours a week or more – must provide those team members and their dependents with affordable minimum essential health insurance coverage. School districts, for example, are required to pay for at least 60 percent of healthcare expenses. This cost is sometimes more, however, as the legislation says employees are not allowed to pay more than 9.5 percent of their family income to health expenses.
The ACA requires employers who break this law and do not provide healthcare coverage to pay a fine per each employee left uninsured. As the ACA rules are supposed to take effect January 1, 2014, while the rest of 2013 is supposed to be the look back period, meaning public sector employers are supposed to be tracking workers’ hours prior to the change.
Employers are also required to treat unionized and non-unionized employees equally to evade a punitive fee of $100 per day. According to the Herald Times Online, budget cuts may prompt many public school districts to reduce employee hours below the 30-hour benchmarking criteria or outsource more substitute teachers to comply with the regulations. Although most local education officials do not want to cut worker hours, some are reporting they feel forced to do so because of budget constraints.
“A lot of districts are looking at reducing hours to under 30,” Brad Valentine, interim Superintendent of Shelby Eastern Schools in Indiana told the Shelbyville News.
Instead of cutting hours, some public school districts are considering other strategies, including: changing employee eligibility, reviewing or adjusting employee contributions, making a shift in employer contributions from family to single coverage and possibly paying all of the single coverage to buffer negative consequences of the law in the future, The Journal reports.
The effects of recent ACA delays
The ACA is mainly making headlines now due to the way it is affecting small businesses because small business insurance reform was a major selling point for the health care legislation. As the legislation is supposed to provide more affordable healthcare choices to workers, the postponements, which are affecting 33 U.S. states, limit small-business workers to a single health insurance plan until 2015. The New York Times reports the Obama administration is delaying the implementation of parts of the program because of an inability to meet tight deadlines of the healthcare reform law.
Administration officials said the delays in the 33 states would go into 2015, which may affect other states and exacerbate healthcare costs affecting 29 million small-sized businesses, the NYT reports.
Loopholes allowing employers to renew their current insurance coverage may benefit some policyholders from potential rate increases for the short term. However, the Los Angeles Times reports, this move may also hinder lawmakers’ efforts to adjust the insurance market and keep premium costs reasonable in the long run.