Health Care

Position: OPPOSED– SPECIFICALLY EMPLOYER MANDATES
Status: ENACTED

History
The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 30, 2010. The new law imposes numerous requirements on both individuals and employers and will have a substantial impact on the franchising community.

On January 19, 2011, the House of Representatives passed a bill repealing the PPACA in its entirety. Less than a week later, the Senate voted on a similar proposal which failed to pass. Sen. Orrin Hatch (R-UT) and Reps. Charles Boustany (R-LA-07), Pat Tiberi (R-OH-12) and John Barrow (D-GA-12) have also introduced the American Job Protection Act (S. 20, H.R. 1744), which the CFA supports and which repeals the employer mandate provisions contained in PPACA.

As Congress continues to address health care, regulations are being issued to implement certain provisions of the law. Specific regulations regarding the employer mandates have yet to be released.

Summary
In regard to employer obligations, PPACA requires businesses employing 50 or more “full-time equivalent employees” (FTEEs) to either provide “minimum essential” health care coverage for those full-time employees or pay a penalty.

FTEEs include part-time employees and is based on a 30-hour-per-week schedule. For example, two part-time employees working 15 hours per week each is equivalent to one full-time employee. Once the 50 FTEE threshold is met, employers must provide minimum essential coverage, which is defined as (1) providing “essential health benefits”; (2) limiting cost sharing and (3) covering at least 60 percent of all costs (has an actuarial value of 60 percent).

While employers with less than 50 FTEEs each month are exempt from all requirements, those who meet the threshold must provide coverage or pay penalties for non-compliance. Penalties range from $2,000 per full-time employee per year (for employers who provide no coverage) to $3,000 for each employee who receives a tax credit for participating in the exchange over choosing the employer’s coverage. Note that the employer does not pay a penalty for his or her first 30 full-time employees.

Position
The CFA supports efforts to repeal PPACA in its entirety. Absent full repeal, the CFA supports repeal of the employer mandates contained in the law.