With the U.S. Supreme Court taking the “where” factor out of individuals’ and families’ access to subsidies for health care, many businesses across the United States now have a regulatory call to action they can no longer ignore:

  • Figure out how to comply with the Affordable Care Act (ACA) employer mandate
  • Or run the risk of potentially hefty IRS fines.

In the 6-3 King v. Burwell ruling delivered June 25, 2015, the Supreme Court upheld IRS authority to offer tax credits and subsidies to individuals and families seeking health care coverage on an exchange, be it state or federally run. This decision, in turn, reinforced the mechanism that will be used to identify and assess penalties for organizations not prepared to comply with the ACA employer mandate. 

The case centered on interpretations of phrasing in the Affordable Care Act, commonly known as Obamacare – a statute that’s as monumentally confusing as it is political kindling. Because of what was called a drafting error as the bill was shuffled between committees (“an exchange established by the state”), subsidies available through the federal government’s online marketplace came to be at stake in the three dozen states that opted not to run their own marketplaces for insurance coverage.

With the much-hoped-for judicial remedy not prevailing, companies that adopted a wait-and-see stance must now rush to develop immediate strategies to deal with the compliance burden that the ACA layered into the Internal Revenue Code.

Though the employer mandate was implemented January 1, 2015 and the penalty assessment period began on that day for most companies, the undeniable urgency to gear up for ACA compliance didn’t become a fact of business life until the morning of June 25, 2015, when the high court ruled on King v. Burwell:

  • For companies that have not complied with the mandate for offering employer-sponsored health coverage to employees who are eligible, it’s time to implement a strategy of either accepting the inevitable shared responsibility penalties or offer required coverage.
  • For companies that have always offered the coverage to their employees, it’s time to develop a strategy for identifying those who, through the reduction of average hours of service to a 30 hours per week rule, may have become newly eligible.
  • For all companies, it’s time to develop a strategy for collecting the data needed to submit the comprehensive reporting that is part of this legislation. Both to the employees and the annual IRS submission.

Foot dragging is no longer an option.

And if you’re in one of the following industries, or if your workforce meets the following description, there’s not a second to blink.

Twitter-At Risk Employers

At the end of the day, what the Supreme Court ruled in the King v. Burwell case forced every employer to answer this question:

“What’s your strategy for ACA compliance?”

By Helen Karakoudas, ACA Education Director at Integrity Data

 

 

ACA-vulnerable industries

Hospitality

  • Restaurants

  • Hotels

  • Motels

  • Casinos

  • Resorts

Employment agencies

  • Staffing companies

  • Temp-help services

Nursing care

  • Rehabilitation facilities

  • Senior living centers

Retail

Colleges, universities and schools

Trucking

Food processing

Security services

Municipalities

Religious organizations

Construction

Not for profits

Agribusiness

ACA-vulnerable workforces

  • Predominantly hourly

  • Lower-wage workers

  • Part-time workers with varying schedules

  • Seasonal hiring

  • Frequent turnover