Tag Archive for: ACA

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What is the status of ObamaCare, and why should I care?

ObamaCare | Farrow-Gillespie & Heath | Dallas, TXRegardless of your position on the Affordable Care Act, otherwise known as ObamaCare (“ACA”), you should neither panic nor rejoice just yet over the actions and inactions of the United States government regarding this healthcare insurance law.  You have probably read about the various options, i.e., “repeal and replace,” “repeal and delay,” or simply “repeal” the ACA.  What Congress is figuring out is that it is difficult to keep “good” provisions, e.g., the one related to “pre-existing conditions” (which over 70% of Americans like) but to do away with “bad” provisions, e.g., the individual mandate (which 70% of Americans do not like) and still keep an actuarial pool that doesn’t adversely affect insurance premiums in a substantial way.  Conventional wisdom is that, without the individual mandate, premiums would increase, probably at a faster rate than is current under the ACA.

All other countries that have provide universal access to healthcare for its citizens figured out a long time ago that everyone needs to be covered in order to spread the cost of insurance over the total population.  As someone who has studied the ways in which Western countries have instituted universal access to healthcare (e.g., Germany in the 1870’s) and who has lectured extensively on the ACA, I am not surprised at Congress’s inability to come up with a plan that would cover everyone, not require everyone to carry insurance, and keep insurance premiums down.  Add in the fact that any new Congressional plan will affect over 20 million citizens who have already obtained health insurance through the ACA and you can see the possibility of throwing insurance markets into chaos.

Of course, there are lots of other ideas, e.g., more incentives for health savings accounts (“HSA’s”), altering the “minimum essential benefits” list, use of high risk pools, etc., and each of these has a different effect, both on the economics of healthcare and on the hotly-debated issue of universal access to healthcare.

But something is likely to happen in the next 3 months and my recommendations for the immediate future are as follows:

  1. If you have insurance, don’t drop it or let it lapse.
  2. If you lose employer-based insurance, be sure to review your COBRA options.
  3. If you lose your job and COBRA is not attractive, you have the option of utilizing the ACA marketplace because losing your job is “qualifying life event” that allows you to access the marketplace outside of the annual “open enrollment period.”

Please feel free to contact Scott Chase or Jennifer Snow at our firm if you have any questions about the ACA.

Jennifer Snow | Farrow-Gillespie & Heath LLP | Dallas, TX

Jennifer Snow practices in the areas of health care law and business litigation. She is the author of numerous articles on health care law. Jennifer represents physicians and physician groups in health law matters, and she represents companies and executives in business litigation.

Ms. Snow has been named to the list of “Rising Stars” by Texas Monthly Magazine and Texas Super Lawyers (a Thomson Reuters service) in every year since 2014.

Scott Chase | Farrow-Gillespie & Heath LLPScott Chase has practiced health law, corporate law, and intellectual property law for over 35 years.  Mr. Chase is Board Certified in Health Law by the Texas Board of Legal Specialization.

Scott’s primary practice focus is business transactions for physicians and healthcare facilities, as well as healthcare regulatory issues such as the Affordable Care Act, HIPAA and peer review.  Mr. Chase handles general corporate matters and trademark/copyright issues for physicians and also for a variety of non-healthcare clients.

FGHW Affordable Care Act

Affordable Care Act employer information

The Affordable Care Act is a federal statute that creates new responsibilities for employers.  Employers who have fewer than 25 “full-time equivalent” employees can qualify for a small business health care tax credit if they pay at least 50% of the employees’ health insurance premium costs and offer coverage through the Small Business Health Options Program (“SHOP”) Marketplace.  Larger employers face new requirements to insure their employees—and steep penalties, should they fail to comply with the requirements.  In 2015, employers with 100 or more full-time equivalent (“FTE”) employees must offer coverage to 70% of those employees and their dependents.  And beginning in 2016, all employers with 50 or more FTE employees must offer coverage to 95% of those employees and their dependents.

For an employer to determine whether it comes within these new requirements, the employer must first calculate its number of full-time equivalent (“FTE”) employees.  Each employee who works 30 hours or more per week, over at least 120 days per year, is a full-time employee.  But hours worked by part-time employees also add to the FTE number; if, for example, five part-time employees work a total of 60 hours per week, their employer would need to add two FTE employees to its total.  Notably, affiliated companies may be treated as a single employer under the Act.  As a result, three companies each having 20 FTE employees could either: 1) qualify for small business health care tax credits, if they are treated as three separate employers; or 2) be subject to the employer coverage mandate, if they are sufficiently connected to be treated as a single employer.  It is therefore particularly important that companies who share ownership or control, or who otherwise coordinate their business activities, consult with counsel to determine their employer status under the ACA.

Once an employer confirms that it is subject to the employer mandate, it has more decisions to make.  For each year that the employer does not offer any insurance coverage to its employees, it will face a $2,000 penalty per FTE, minus the first 30 employees (or, in 2015, minus the first 80 employees).  To avoid such penalties, the employer should offer its employees an “affordable” plan that provides “minimum value” under the ACA.  These calculations are complex.  Generally, “minimum value” requires that the employer pays at least 60% of the plan’s costs, and “affordable” requires that an employee’s premiums cost no more than 9.5% of his or her household income.  If the employer’s plan is deemed to not provide minimum value, or to not be affordable, the employer will be fined $3,000 for any full-time employees who receive federal premium subsidies for marketplace coverage.  Some employers may, nevertheless, opt for “skinny plans” that may not meet the required minimum essential coverage under the Act, but which will avoid the $2,000-per-employee penalty and reduce coverage costs.

For more information about how the Affordable Care Act may affect your business, please contact board-certified health care attorney Scott Chase.