Installment 3 - Protecting Your Business through Compliance with Employment Laws
Welcome back to the third installment of our employment law blog series! This week, we are focusing on laws which apply to businesses with 50 or more employees. Please remember all of the laws we discussed during the first two installments still apply to your business of 50 or more employees. That said, these laws are a bit more complicated, so bear with me as we unpack these essentials.
50 or More Employees
Patient Protection Affordable Care Act (PPACA aka ACA) – Governed by Health Human Services & IRS
Generally speaking, employers classified as Applicable Large Employers (ALEs) under the law must offer affordable health insurance options (or pay a penalty). These employers must also comply with strict reporting requirements. You should note that this mandate applies to 50+ “Full Time Equivalent” workers, which means even if you have very few Full Time employees, but many Part Time employees, you could STILL be considered and ALE.
The basic requirements require employers to provide access to “affordable” health insurance, which is considered minimum essential coverage (MEC) and is a minimum value (MV) plan. The problem is, most businesses do not know what these terms mean or how they apply to their workforce.
“Affordable” Health Insurance
The cost of coverage for an employee only, basic level plan can not be more than 9.86% (for plan years in effect during 2019) of the household income - ACA Affordability Threshold - SHRM article
“Minimum Essential Coverage”
The minimum benefits which must be offered and is considered the "bare bones" of a health plan. MEC covers 10 minimum essential health benefits, including things like maternity and newborn care, mental health and substance use disorder services and prescription drugs to name a few.
A person must have been enrolled in a MEC plan from 2018 and earlier in order to satisfy the Individual Mandate requirements under the ACA. However, because it was repealed the Individual Mandate will no longer apply starting in 2019. - IRS MEC chart
A plan is considered minimum value if it pays at least 60% of the total cost of covered services - Cigna inform on reform fact sheet