Speaker outlines health plan rules at Chamber luncheon

SALEM – There is a lot to know about the Affordable Care Act (ACA), but in 2014 employers with 50 or fewer employees are exempt from penalties.

That was one key point made during a presentation by Sarah Poulton of U.S. Rep. Bill Johnson’s office at the Salem Area Chamber of Commerce business connection luncheon on Wednesday.

The Salem Community Hospital was featured as the business of the month with President and CEO Steve Ruwoldt noting the hospital will observe it 100th birthday on Sept. 12 while providing a brief update on new physicians and equipment at the hospital.

The ACA was signed into law March 23, 2010 and most of the major aspects will be phased in by January 2014 with the remaining becoming effective by 2020.

The full name of the law is the Patient Protection and Affordable Care Act (PPACA) but it is more commonly referred to as Obamacare.

The law is aimed at reducing the number of uninsured Americans and decreasing health care costs.

The Congressional Budget Office projected the ACA will lower Medicare spending and future deficits through a number of mechanisms, including mandates, subsidies, and tax credits, to employers and individuals.

Healthcare outcomes and streamlining the care delivery process are other aims while the ACA also requires insurance companies to cover all applicants and offer the same rates regardless of pre-existing conditions or sex.

Poulton, who specializes in the health care area, called the Affordable Care Act “sweeping legislation” which many in congress said they didn’t have a chance to read and which 26 states later took to federal court.

Last June, the United States Supreme Court upheld the constitutionality of most of ACA in the case National Federation of Independent Business v. Sebelius.

“Pretty much everyone’s affected by it,” Poulton said while noting there are exemptions including non-citizens, members of Indian tribes, people incarcerated, specific religious sect members, people who can’t afford coverage, people under hardship as defined by the secretary of Health and Human Services, people covered by government programs and people already covered.

A single-page chart outlining the penalties for employers not offering affordable coverage under the act before 2014 was available to guests.

No penalties apply for employers with under 50 full-time employees and if there are 25 or fewer employees, and the average wage is up to $50,000, the company may be eligible for a tax credit.

If an employer does not offer coverage and at least one employee receives a premium tax credit or cost-sharing subsidy in an exchange, then the employer must pay a penalty for not offering coverage.

The penalty is $2,000 annually times the number of full-time employees minus 30 and the penalty is increased each year by the growth of the insurance premiums.

For example, a company with 50 employees minus 30 equals 20 times $2,000 would equal a $40,000 fine.

There are other aspects designating that if the coverage pays at least 60 percent of the expenses for a typical population and if the employee does not have to pay more than 9.5 percent of family incomes for coverage, there is no penalty since affordable coverage is offered.

Poulton explained that part-time employees are considered a fraction of a full-time employee, in other words, two part-time employees at 15 hours each will equal one full-time employee.

As of now, Ohio will not set up the exchanges, Poulton said while noting there is no reason to think the federal exchange will be operational by the Jan. 1, 2014 deadline.

The IRS website encourages small employers to check out the small business health care tax credit and obtain more information on the Affordable Health Care Act at IRS.gov.

Information is also available from the Federal Register website, the daily journal of the United States government (www.federalregister.gov).

The Chamber said 65 people attended the event.

Larry Shields can be reached at lshields@salemnews.net