Weighing In On ACA Delay, Repeal Of Fair Share Contribution In Mass.
John P. McMorrow is an employee benefits attorney with Mirick O'Connell, representing public- and private-sector clients in the MetroWest and Worcester regions. Here, he offers insight into the recent delay of the Affordable Care Act (ACA) employer mandate, and the repeal of fair share contribution, which required firms to offer health coverage or pay a penalty in Massachusetts.
Q: Should employers relax now that compliance with the Affordable Care Act (ACA) employer mandate to provide affordable health coverage to their full-time employees has been delayed until 2015?
A: No. The delay in the employer mandate is welcome news, but it is not a free pass. It's true that large firms with 50 or more full-time equivalent employees who don't offer affordable health coverage 2014 will not be penalized. But the relief does not extend to other ACA provisions scheduled to take effect in the near future, like the requirement that employers notify workers of public health insurance exchanges by Oct. 1. The benefit mandates, including a ban on preexisting condition restrictions, and the individual mandate, are still slated for implementation in 2014.
Q: What does the recent elimination of fair share contribution in the fiscal 2014 state budget mean for Bay State businesses?
A: Businesses with 11 or more employees must still satisfy continuing obligations under state health care reform, but administrative costs will be reduced thanks to the elimination of certain fair share reporting requirements with the state. However, employers must offer a section 125 plan so their employees can buy health insurance on a pre-tax basis, and be able prove they did so to avoid a penalty. And beginning in 2014, all employers will have to pay a new state payroll tax of $50.40 per employee each year.
Q: Are most employers motivated to offer health coverage based on state and federal requirements, or is it more about attracting employees?
A: Most large employers already provide the kind of coverage required by law because they want to recruit and retain qualified workers. Those in the restaurant, retail and hospitality industries lobbied for the ACA delay because of the practical difficulties it posed, and the strain it would place on thin profit margins. The delay in the ACA employer mandate should give businesses more time to evaluate their options.
This is the first of a regular Q&A section we will include in the MetroWest495 Biz e-news update, where area experts will weigh in on issues that impact the business community.
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