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Low-income Earners and the ACA

by Andrew SzczesniakOctober 29, 2015 8:00 AM

In January of 2016, the Affordable Care Act (ACA) will begin to directly impact businesses with between 50-99 employees. While health insurance rates have been impacting business owners since the start of the ACA several years ago, those companies with 50-99 employees haven’t had to offer healthcare or face a fine. That’s changing in a couple of months.

The interesting thing about the ACA is that the very people it is supposed to help, low income workers, seem to be the ones least interested getting their healthcare, even when it’s offered by their employers.

Offering coverage and the Affordable Care Act.

How the Affordable Care Act Affect Low-income Workers

In a recent article in the New York Times, Billy Sewell, the owner of 26 Golden Corral restaurants talked about the problems he has had getting his employees to take on his health insurance.

When this law was first passed, many businesses began scaling back their employees’ hours to get them below the 30-hour workweek threshold requiring coverage. However, others chose to offer it to their employees for a variety of reasons (retain and attract good employees, take care of their company’s “family” of employees, etc.). What they were finding was that different people had different definitions of “affordable.”

According to the article, Sewell offered his Golden Corral employees coverage through a plan that was only offered to salaried management before. Even though he was going to pay 65% of the employees’ healthcare premiums, he found few takers. It turns out that people who work primarily on tips weren’t willing to even pay the $140 per month for a high deductible health insurance plan.

This is a problem that isn’t unique to the restaurant industry. There are many industries with employees working at minimum wage or slightly better that either can’t afford the coverage or don’t want it. What’s an employer to do to protect himself/herself from fines tied to the law? There are some safe harbors built into the law allowing for spouse’s income, etc. However, how does a business owner know what the laws are and how they apply to them?

How Group Management Services Can Help

If you’re offering healthcare, looking to expand who you cover or are looking to begin offering it, you should talk to some people. If you have a broker, reach out to them or you can do what more and more businesses are doing and speak with a professional employer organization like GMS. By tying together payroll, human resources, and benefits, a PEO may be able to provide you multiple options that you may not be able to get on your own.

Contact us today to see how partnering with a PEO can provide you and your business with beneficial options.

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