Now that the Employer Mandate part of the ACA had been pushed back to January of 2015, everyone gave a big sigh of relief – but should you? This changes the landscape significantly in regards to your compliance planning.
As the economy is improving and jobs in the restaurant/service segment are increasing – what is your plan for managing full time and part time employee status? Many restaurant employers held off hiring, pending the CA January 2014 date – but now there has been a surge in hiring. The average employee being hired is working thirty-three hours a week. This statistic from the recent jobs government report would indicate that these employees will end up being full-time and therefore, eligible for health care coverage. We are not sure how the “look back” period will be handled at this point, so it’s time for employers to make plans in regards to their hiring needs and employee status.
The delay in the Employer Mandate is not necessarily bad news for the restaurant industry but it has certainly sent a shock wave through the insurance industry. With the opening of the exchanges in mid-October this year we will get information that we were previously only guessing at. What will the expense of insurance be for the individual in the exchange? That will certainly influence the types of group insurance rates the carriers will be promoting to the restaurant owner and operators. There is a lot of skepticism as to whether the exchanges will open on time, but from everything we know at this point, California will be ready to go in October.
This brings up an interesting twist in the ACA plan. It is not required by law that restaurant owners provide insurance right now. Most restaurants offer insurance to their management and a few full-time employees, which is an individual decision by the operator. But is the insurance being offered to the employee as good as what they can get by going to the exchange and getting their own policy? If the employee makes minimum wage or qualifies for government subsidies based on FPL guidelines, they could go to the exchange and afford to cover themselves and their dependents for considerably less than what your plan is costing them.
Theoretically, you could cancel your insurance program for the last quarter of 2013 and all of 2014 and send your employees to the exchange. They would save money on coverage and you would have 15 months of zero health care costs. That’s pretty dramatic, but a possible scenario with this new transition of the Affordable Care Act.
Greg Kniss of Krost presented at the “Affordable Care Act” Panel Discussion on Monday, August 19, 2013 at the Los Angeles Convention Center for the Western Food Service & Hospitality Expo.