No time like the present to check Obamacare speed limit

Posted November 2013 • • Bill Dragon

Obamacare is coming next year, and individuals in need of insurance must sign up now through March 31, 2014, or face a tax penalty.

For employers, a key component of the law has been delayed until 2015. That is the “pay or play” provision where employers of 50 or more full-time employees will have to start providing health coverage or be assessed a penalty of up to $3,000 per each full-time employee.

Helping local business owners to understand the implications of this massive law are several Indianapolis-area law offices. At least three local firms have been busy conducting informational seminars and webinars on Obamacare. These include Krieg Devault, Faegre Baker Daniels and Ice Miller.

One such seminar was conducted Oct. 3 at Woodland Country Club and was attended by about 400 business owners. At the seminar Harlan Schafir of Human Capital Concepts, in partnership with Krieg Devault, presented an overview of the law and answered questions.

Most of the business owners in attendance had less than 50 employees, Schafir said. A few had 200-300 employees. Schafir said that there is a lot of confusion caused by changes in the law. A lot of business owners think the law’s been deferred. In reality, it’s just the “pay or play” piece that’s been deferred. The individual mandate has not.

“They’re looking for us to help clarify some of the question and answer combinations that they have to consider confronting them so that, based on the answer, they can make the decisions as to what they want to do,” Schafir said.

He compared the uncertainty about Obamacare to driving a car.

“Right now, people don’t understand what the speed limit is. They don’t know if they’re up to speed or not. I can make the decision to drive faster than 70 mph, but I don’t even know if it’s 70.”

Defining full-time
The law is still being defined, but one common concern always voiced is the “50 fulltime employee” piece of the law and just how that number is calculated.

Employers should be taking time now to calculate who is considered full-time for determining whether they have 50 employees and thereby have to participate in the mandate. There is no such requirement if you have less than 50 full-time employees.

“The general rule is, if someone works on average 30 hours a week in a month, they’re entitled to be offered coverage,” said Gayle Skolnik of Faegre Baker Daniels.

“There is a method to calculate and determine whether those variable hour or seasonal hour employees are considered full-time by looking back at a measurement period (often 12 months) of that employee’s past work record,” Skolnik said.

“I’ve heard a lot of exacerbation expressed, particularly by the small business owner, about just how difficult it is to get a grasp on these very detailed rules,” she said.

Consult your counsel
The best way for a business owner to be sure if they are required to participate in the mandate is to consult legal counsel.

Chris Sears of Ice Miller shares this advice in each seminar he conducts:
“What we’re telling them is really use now through 2015 to understand your employee makeup, what the demographics are, how much people are working, start tracking those hours, have a really good understanding this time next year who you should offer your coverage to if you want to avoid the penalty.”

That way, by 2015, everyone will know the speed limit on Obamacare.

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