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Posts tagged "Affordable Care Act".

The recent decisions by the Fourth Circuit and the D.C. Circuit address a controversy that could have far-reaching consequences for the Patient Protection and Affordable Care Act (the “ACA”). Under the ACA, states and the District of Columbia are authorized to establish health insurance market places (“exchanges”) where each state’s citizens may purchase health insurance.  If a state does not create an exchange, the ACA mandates that the Department of Health and Human Services establish a federal exchange to operate in the state.  At this time, fourteen states and the District of Columbia have exchanges, while thirty-six states have federal exchanges.

The ACA also creates a tax credit program that subsidizes the cost of insurance for lower income Americans. The ACA’s individual mandate requires individuals to maintain “minimum essential coverage,” which, in general, is enforced through a tax penalty. However, the individual mandate only applies when an individual’s health insurance premiums (after applying the tax credit subsidy to the premiums) are less than eight percent of their projected household income. Therefore, the tax credit increases the number of Americans who must purchase insurance, and since thirty-six states have a federal exchange, a significant number of Americans receive these tax credits without participating in state exchanges.

July 3, 2013
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Affordable Care Act Photo (00345306).jpgOn Tuesday, July 2, the Treasury Department announced that the Obama Administration will delay the Affordable Care Act’s mandatory employer and insurer reporting requirements for another year.  These requirements will not take effect until 2015 while the Treasury Department works out new rules to help businesses navigate the complexities of the health care mandate. 

The Treasury Department similarly delayed until 2015 the assessment of penalties, also known as shared responsibility payments, for large employers that do not meet minimum standards of health care coverage under the Affordable Care Act.  Large employers are defined in the act as having an average of at least 50 full-time employees on business days during the preceding calendar year.

The postponement does not affect the individual mandate regarding coverage or the on-going development of health care “exchanges”—the government-sponsored health care marketplace where individuals and businesses will be able to shop for health care plans offered by private providers.