Publications

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Q: Should we undertake an immediate review of our company health care plan to determine if it meets the requirements of the new law?

A: Employer penalties for not providing “minimum essential coverage” under their health care plans (or for not providing health care at all) do not go into effect until 2014. Your health insurance provider is likely to contact you long before then with any proposed changes that would be needed to avoid sanctions. If you do not offer insurance now and continue not to after 2013 and have more than 50 full-time employees you will be subject to sanctions.

Q: How will the health insurance reforms that become effective this year be implemented?

A: Your health insurance provider may need to change the terms of your plan in order to account for these reforms and will likely contact you shortly with modified plan documents incorporating these changes.

Q: Are there any tax increases affecting my company or my employees that become effective this year?

A: Except for a 10 percent excise on indoor tanning services and specialized taxes affecting parts of the health care industry, employers and their employees generally are not subject to increased taxes this year as a result of the changes in health care. The two most significant potential tax increases for non-health industry companies are the new Medicare taxes that affect high income individuals after 2012, and the tax on high value health insurance (Cadillac) plans, which does not take effect until 2018.

Q: Am I now required to offer health insurance to my employees?

A: You are not, except that starting in 2014 you will be subject to penalties as described in the memo if you do not offer coverage or offer coverage that is considered unaffordable or does not meet certain benefit requirements.

Q: Will I be required to purchase health insurance for myself and my employees in the Exchange?

A: No, the Exchange is a place where individuals who do not have Medicare, Medicaid or an employer-provided health care plan can go to purchase health insurance. If you provide or plan to provide group health coverage you will have no reason to use the Exchange.

Q: How will my company be affected by the CLASS Act?

A. The CLASS act is a government-run long-term assisted living program that will become effective on January 1, 2011. The government will establish premiums for employees to pay to participate in this program and you will need to collect those premiums through payroll deductions. However, participation is voluntary, and any employee may opt out of the CLASS Act.

We would be very pleased to help your company work its way through HCR and respond to specific concerns about the application and interpretation of HCR that are not addressed in this memorandum. Please contact:

Evan M. Migdail

Nicole D. Carelli

Please read our other Alerts on ways health care reform may affect your business.