Affordable Care Act (ACA)
On October 1, 2013, the Affordable Care Act (ACA - commonly known as “Obamacare”) public insurance exchanges were unveiled and began accepting applicants. The Affordable Care Act does not require businesses to provide health benefits to their workers, but larger employers face penalties if they don’t make affordable coverage available. Enforcement of those penalties will begin in 2015, a year later than originally scheduled. Larger employers with more than 50 full-time employees (“FTEs”) who do not offer coverage face a penalty of $2,000 per FTE (excluding the first 30 FTEs) if at least one FTE receives a government subsidy to buy coverage on the exchange. A simple flowchart that illustrates how these employer responsibilities work can be found by visiting The Henry J. Kaiser Family Foundation website.
What exactly does this mean for small businesses and farmers?
The ACA DOES NOT apply to:
- Those that do not employ any full-time (30-hours per week) year-round workers.
- Those that do not have 50 or more employees in any month during the year.
- Those that have more than 50 employees a month, but only for 4 months (120 days) or less out of the year and employees number 50 and above perform seasonal work.
For example: A farm has 49 full-time employees from January to the beginning of September and hires 15 seasonal workers for the harvest. Those seasonal workers will not count against the business as long as they are not kept on for more than four months.
While the ACA does not require small businesses with under 50 employees to provide employees with insurance, it does require that they provide a written notice to employees about the availability of the public healthcare exchanges. In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies.
Beginning October 1, 2013, employers are required to furnish all current employees and newly hired employees at the time of hire for the duration of 2013 a notice to satisfy Health Benefits Exchange notice requirements under the Affordable Care Act. As of Jan. 1, 2014, new employees must be furnished with the notice within two weeks of beginning employment.
The notice must:
- Include information regarding the existence of an exchange, as well as contact information and a description of the services provided by an exchange;
- Inform the employee that the employee may be eligible for a premium tax credit if the employee purchases a qualified health plan through the exchange;
- Contain a statement informing the employee that, if the employee purchases a qualified health plan through the exchange, the employee may lose the employer contribution (if any) to any health benefit plans offered by the employer, and that all or a portion of such contribution may be excludable from income for federal income tax purposes.
The U.S. Department of Labor has provided guidance and model notices for your use.
The U.S. Labor Department has also provided a Frequently Asked Questions page regarding the notice requirement, indicating there will be no penalty for failure to provide the notices.
AFBF has developed a fact sheet for farm employers that provides guidance on how to comply with this new and ongoing requirement. Additionally, there are sample forms that employers can use to provide the required notification. This fact sheet and forms are intended to be purely informational and do not constitute legal advice. For legal advice, please contact an attorney.
We encourage you to share this information with other farm employers.
Example Notice 13a
Example Notice 13b
Example Notice 13c
For more information, contact the Indiana Farm Bureau at 317-692-7845.