ACA’s nondiscrimination rules may incur fines for employers

In light of the recent healthcare reform, Jay Starkman, CEO of human resources outsourcing organization Engage PEO, is encouraging employers to examine their employees’ benefits packages more closely. The Affordable Care Act (ACA) bans discrimination when it comes to providing health insurance coverage and mandates all employees are offered the same benefit options. According to Benefits Pro, Starkman is suggesting this has the potential to cost employers extra money, especially since penalty fines are built into the act. 

Not falling into alignment with the nondiscrimination rules could cause employers to garner penalty fines of $100 per day per failure to comply and make employers targets for civil lawsuits, Benefit News reported. 

In the past, employers were allowed to offer different benefits to different employees, and public sector organizations such as school districts sometimes offered better insurance benefits to employees who had more tenure. However, to maintain compliance with ACA, public employers must exercise caution when providing benefits to tenured staff members as this may be considered discriminatory. 

“It doesn’t sound like a big deal, but when you take into account two very common practices that businesses have been following for years that would violate this provision, it really becomes meaningful,” Starkman said.

ACA’s nondiscriminatory provisions go into effect January 2014 for calendar year plans or the 2014 renewal date for fiscal year plans.