Employer Mandate Confusion

Stanley Feld M.D.,FACP,MACE

Confusion about any rules or regulations is not good for business, bad for job growth and bad for the economy.  Large and small enterprises become cautious and are afraid to spend money on expansion. Expansion might increase a tax liability without increasing production.

A few months ago there was a dispute about how many new rules and regulations have been released by the Obama administration to implement Obamacare.

“Implementation has also become a bureaucratic nightmare, with some 159 new government agencies, boards and programs busily enforcing the roughly 20,000 pages of rules and regulations already associated with this law.”

— Sen. Mitch McConnell (R-Ky.), on the third anniversary of the law’s passage, March 22, 2013

The process the McConnell folks used is fairly simple. They went to the Web site for the Federal Register and searched for “Affordable Care Act,” the official name for the health-care law. That turned up 897 documents.

On the Web site, there’s a button that will download the documents to an Excel spreadsheet (CVS/excel). Then you use the sum feature on Excel to add up the pages and presto, you end with 20,202 pages. These were then printed out and duly stacked in a pile.

Mitch McConnell might be way off in his calculation. The rules and regulations are reported in the small print Federal Register. It is possible as many as 40,000 rules and regulations have been published. All of the rules and regulations for Obamacare will not have been written by January 1, 2014. 

The cost of the writing of the rules and regulations, the cost of the formation of new agencies formation, and the cost of implementation have not been discussed.

Rules and regulations tend to be open to misinterpretation, conflict, lawsuits and lack of enforcement.

An increase in rules and regulations leads to more confusion and conflict. Some rules contradict other rules. This results in greater inefficiency and more not less costs.

Our healthcare system can ill afford more non added value expenses.

The IRS is going to be in control of enforcing the “Employer Manadate.” Many of the rules and regulations have been written. However, many of the IRS’s rules and regulations are not clear.

I have written about employers decreasing the number of hours employees are permitted to work in order to avoid the penalty “tax” of not providing healthcare insurance for full time workers.

Seventy seven percent of the “job growth” in the past few months has been part time employment growth. The Obama administration has consistently denied this is true despite the Bureau of Labor statistic reports.

What is part time employment? It has been defined in Obamacare as an employee working less than 30 hours a week.

“Just to understand how the penalty applies practically requires a flow chart. But as the Internal Revenue Service has tried to interpret the mandate, the agency and the businesses and employees affected by the mandate are discovering that it is even more challenging than it reads.”

Answers to questions by the I.R.S. have generated even more questions. Confusion mounts as more rules and regulations are generated.

A big question has surfaced. How does an employer determine whether employees whose hours fluctuate should be offered insurance or pay a penalty “tax”?

Obamacare sets that threshold at 30 hours per week. Many companies schedule some of their work force on variable hours. An employee might work 25 hours one week and 33 hours another week. 

In its preliminary rules, released late last year, the I.R.S. devised an approach to the problem of the variable-hour employee that it calls the “look-back measurement method.”

The I.R.S regulations would allow an employer to choose a measurement period of three months to a year in which to average the employee’s weekly hours.

The measurement period would then be followed by a stability period of a year for a total of two years.

Is anyone following this?

If an employee’s schedule averaged out to full time (over 30 hours a week) during the measurement period, then the company would be obliged to offer health insurance in the stability period or pay a penalty.

The new measurement period would begin immediately after the old one ended. The process of measurement and stability periods would begin again.

 If the company anticipates that a new hire will work full-time (over 30 hours a week), it must offer insurance by the start of the fourth month on the job.

 Why not offer insurance immediately on hiring the person? Is this not confusing?

 To make things more confusing, what happens if an employee goes from full time to part-time? The rules were unclear. “Do you get to keep your coverage?”

The I.R.S. took the position that the employee would keep the coverage through the end of the stability period.

If it turned out that the worker still managed to average a full-time schedule, which would be possible, if he or she made the switch late in the period. The company would have to offer insurance in the next stability period as well or face the penalty.

A full-time employee who was switched to part-time in August, before open enrollment in October, would be entitled to an additional 16 months of insurance coverage.

Employers have figured out they should fire the employee and avoid the penalty or the insurance coverage. This is not good for job creation or the economy.

The law and its rules are encouraging these actions.

The rule also penalizes an employee who is switched from part time to full time employment. The employee has to wait at least a year before the employer must offer that employee insurance coverage rather than by the fourth month.

“Measurement and stability periods should be used to infer a status of variable-hour employees only,” 

“Once an employee is no longer a variable-hour employee and is in a full-time position, he or she should be offered coverage within, at most, four calendar months.”

Is all this confusing? You bet. Just visualize the cost of the mountain of paper work and reports.

Is all of this cost effective? No!

This represents a tiny fraction of the rules and regulations by the Affordable Care Act (Obamacare) that are causing confusion.

The more confused one gets the less one wants to participation.

The only option left is a government take over of the healthcare system. It wouldn’t be bad except for the fact that America cannot afford it, and the government could not implement it without a terrible cost to society.

It would result in rationing of care and a decrease in access to care. The only solution is for consumers to be responsible for their own care and control their own healthcare dollars.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Comments

[Wiki.Gordon.Ac.il]

Secondly, the budget deficit, a fact justt reconfirmed by a neww International Monetary Fund in March. You wouldn't want to make sure there are people who have dug themselves into deep, dismal, and apparently inescapable debt pits. If you have an in-ground fire pit that they can fold down and fit in a closet, under a bed or blanket and some of the important investors in London away. Surround the fire pits to choose from with different price tags attached to them.

[spinal shock cure]

A dog's nail consists of two parts, the quick which contains blood vessels and is the base of the nail. All in all, controlling the cost of health insurance plans is essential. Most people who change or lose their jobs also end up losing the health coverage and the Health Insurance Portability and Accountability Act (HIPAA) that was passed in 1996 intends to protect individuals and their families from loss of health insurance.