Though the majority of businesses in Maine and in Lincoln County specifically are classified as “small businesses” there are a handful that, under the Affordable Care Act, are considered large. Among them are Renys, Lincoln County Healthcare, Darling Marine Center and Bigelow Laboratories, and Lincoln County government, to name a few.
Under the ACA a large business is defined as having greater than 50 full-time employees (employees working at least 30 hours weekly).
Under ACA, large business owners who currently offer health insurance to their employees must offer health insurance to all employees after Dec. 31, 2013, (i.e., Jan. 1, 2014) or employers could pay a per-employee fine.
However, because there are many large businesses in the U.S. that do not currently offer any health insurance benefits at all, the Obama administration has pushed back the deadline for having employees covered to Jan. 2, 2015.
Consequently, many big business employees will have to wait until 2015 to get healthcare insurance offered by their employers.
Waiting to 2015 for health coverage actually might be longer than that for some workers, since some employers might find it cheaper to just pay the fine instead of offering insurance.
It is also possible some organization could opt to use higher numbers of part-time staff to reduce costs of compliance with the Affordable Care Act.
According to the document, employer-based coverage has been declining nationally in recent years. The ACA supports the continued roll of employer-sponsored coverage.
Some employers (large and small) offer health coverage while others do not, which creates an uneven playing field in which employers who provide coverage incur costs (which are generally tax deductible) that employers, who do not offer health insurance, avoid.
Under ACA (http://www.healthcare.gov), and according to the Muskie report, large businesses must provide “affordable and adequate” coverage at least equivalent to the value of the Bronze level plans (meaning insurance pays 60 percent, and individual 40 percent) and generally, would have to pay $2000 or up to $3000 for every full-time employee who did not have “adequate, affordable coverage” through the large business.
This penalty has been delayed, giving large businesses more time to address concerns raised by the business community regarding complying with the law.
Big business issues raised include definition of full-time, part-time and seasonal workers definitions under ACA.
An employee who does not have “affordable, adequate coverage” in the workplace is eligible to go to the Marketplace, purchase coverage there and access premium tax credits.
According to the law, outlined in the Muskie report, to be deemed affordable, an employer-sponsored plan must assure that each employee pays no more than 9.5 percent of income for health insurance.
The affordability provision applies to employee-only coverage. While many workers may wish to buy family coverage, the trigger for affordability is based on employee-only coverage.
That is, an employee who spends more than 9.5 percent of his income for health insurance would be allowed to leave the employer’s plan and qualify to buy coverage through Maine’s Health Insurance Marketplace and access the premium subsidies provided there.
However, an employee who purchases family coverage may spend more than 9.5 percent of income for that coverage but would not be eligible for Marketplace coverage or tax credits because his or her own coverage – employee only – still costs less than 9.5 percent of his income.
As initially proposed, employers would have been required to offer dependent coverage for children but not for spouses and would not need to pay for any part of that coverage.
The cost of implementation and the impact on employers, providers and insurers can have a cost impact on consumers as well.
The cost of maintaining the Marketplace and paying for the reinsurance and risk adjustment will be paid for through fees on insurers, fees that can be passed along to premium payers.
The law is financed, in part, by other new fees and taxes on providers and health insurers. Some of those industries agreed to new fees, reflecting the fact that they will see significant new revenues as a result of millions of new, additional covered people.
High income taxpayers (over $200,000 per year) will now pay higher taxes to support Medicare and those taxes will be calculated not just on earned income but on unearned income.
According to the report, a 40 percent excise tax will be levied in the out years on high cost health plans and deductions on flexible spending accounts are limited while the floor for tax deductibility of health expenses is increased.
Of concern to business and consumers is whether and how fees on insurers will be passed on to premium payers.
It is acknowledged that the ACA is a “work in progress.”
The Maine Legislature has announced plans to re-visit whether Maine will accept federal funds and expand coverage through MaineCare.
Throughout 2014, the federal government and large business employers will be working on how to implement the provisions requiring large employers to pay penalties if they fail to provide adequate and a1ordable coverage for all their full-time employees.
However, on Oct. 1, small businesses and individuals without affordable health insurance will be able to apply for coverage in a new Health Insurance Marketplace.
Through the Marketplace, individuals will receive help with coverage decisions from independent Navigators and, if eligible, receive premium tax credits to help pay when the new coverage (and the requirement that everyone have coverage) takes effect Jan. 1, 2014.
