Friends and coworkers, from left, Christina Kelsey, Donna Holmes, Michelle Partridge and Linda Boozer, chat during lunch at Broad Street Bakery in Jackson on Monday. / Joe Ellis/The Clarion-Ledger
Penalties for businesses that don’t comply with Affordable Care Act provisions taking effect Jan. 1, 2015, range from $2,000 to $3,000 annually, multiplied by the number of full-time workers at a company, with 30 then subtracted from that number. The penalty is increased each year by the growth in insurance premiums.
The year delay in implementing the insurance mandate of the Affordable Care Act is offering little breathing room for businesses with 50 or more full-time workers.
An act requiring businesses with 50 or more full-time or full-time-equivalent employees to offer affordable health care to them was to take effect Jan. 1.
But that doesn’t mean those firms won’t have plenty of work to do between now and Jan. 1, 2015, to prepare for the changes.
Penalties face those companies if they don’t offer reasonably priced health care to their workers or buy coverage in a state’s exchange and receive a premium tax credit. Those penalties range from $2,000 to $3,000 annually, multiplied by the number of full-time workers at a company, with 30 then subtracted from that number. The penalty is increased each year by the growth in insurance premiums.
Businesses not only are scrambling to make sure they’ll be compliant with the new law but also to meet more imminent deadlines, including notifying workers via information on their paychecks or through other means of their options when Mississippi’s health insurance exchange launches today, says Ron Aldridge, director of the state chapter of the National Federation of Independent Business.
“There are a good number of them that don’t know what’s going on,” he said, adding uncertainty over the ACA’s ultimate impact is hampering businesses’ ability to budget for 2014, along with a still-questionable economy. He says provisions coming this January will have an impact, too, including new taxes and changes in out-of-pocket spending.
Jeff Good has hired a pair of attorneys to help him determine how the changes will impact the three Jackson restaurants he co-owns: Sal & Mookie’s, Bravo! Italian Restaurant and Bar, and Broad Street Baking Co. The first of those restaurants employs more than 50 people, and the three eateries collectively employ 203.
Of those, 23 salaried managers and supervisors currently receive health benefits, Good said. That could change.
“The more you read (the law), the more questions there are,” he said. “It’s the same for everybody. This isn’t just (affecting) one economic sector. There are many moving parts. We’re going to do the right thing.”
Manufacturing, a bedrock industry in Mississippi taking in everything from dining-room furniture and guitar amplifiers to cars, trucks and amphibious warships, has a strong history of offering competitive health care benefits, says Jay Moon, who heads the Mississippi Manufacturers Association. But whether they’re well-situated to handle the ACA as it rolls out, one thing is certain, he added.
“Health care costs are going to go up,” as much through everyday market conditions as the ACA, Moon said. “If you go from 49 to 50 employees, does (the ACA) stymie your growth?”
He says it could lead firms with fewer than 50 employees but with the means to grow not to add jobs so as to not take on the cost of having to provide health benefits.
Other employers may provide money to workers to allow them to sign up in the state’s insurance exchange as individuals.
The state’s trucking industry varies in company size from just a handful of workers to hundreds. David Roberts, president of the Mississippi Trucking Association, says most of them offer health care but added, “the question going forward is the continued affordability of providing such a benefit to their employees. There still remains a great deal of uncertainty regarding the law and the undue burden of increased costs.”
A survey of more than 2,000 randomly selected public and private businesses by The Kaiser Family Foundation found 57 percent of firms, ranging from three to more than 200 workers, offer health benefits to workers, down from 61 percent in 2012. Just 45 percent of companies with three to nine employees offer benefits, the survey found.
The foundation wrote that impending ACA provisions “including new benefits, cost-sharing tiers and premium rating rules” for firms with less than 50 workers that do offer coverage will likely mean more drastic year-to-year changes in the overall percentage of businesses offering benefits. It also said many larger firms may proceed as if their rules were taking effect next January to ensure a smooth implementation.
While the NFIB has typically voiced opposition to the ACA, Aldridge acknowledged one positive the health care provisions for businesses could have is the ability to attract better workers by being able to offer benefits.
“That’s always an incentive that’s going to be attractive, no matter what size your company is.”
To contact Jeff Ayres, call (601) 961-7050 or follow @jeffayres71 on Twitter.