Is Your Health Insurance Plan Compliant with PPACA?

In just over a year, penalties for noncompliance with the Affordable Care Act start to take effect for those with more than 50 FTEs. The health insurance provided by an employer must meet minimum standards to comply with PPACA. Broadly speaking, some of those standards include:

• The employer plan design must pay 60% of costs (the “minimum value” standard)
• The employee contribution must not exceed 9.5% of the employee’s household income (the “affordability” standard)

Guidance regarding many parts of the Affordable Care Act is still forthcoming, and some of the existing guidance can be confusing. What assistance is your current benefits provider offering you regarding getting into compliance with the law? The Contractors Plan has focused on benefits solutions for government contractors for more than 30 years, and we’re taking a proactive approach to helping our clients get into compliance with PPACA.

Keep the following in mind:
• On Davis-Bacon or Service Contract Act contracts, the funds to provide health insurance and other benefits for your workers are included in the wage determination.
• Using these fringe dollars to offer health insurance for your workers removes money from payroll, so you save on payroll burden!
• Paying the fringe as additional cash wages rather than providing health insurance is expensive, and will be even more so for large employers when fines begin kicking in January 1, 2014.