Benefits Management

Benefits group urges delay of health reform law's 95% coverage requirement

Jerry Geisel

January 07, 2015 Reprints

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Benefits group urges delay of health reform law's 95% coverage requirement

American Benefits Council President James Klein./ Photo via Facebook

Federal lawmakers should extend part of a 2014 Treasury Department regulation that phases in rules requiring employers to extend coverage to 95% of their full-time employees in order to avoid a big penalty under the health care reform law, an employer benefits lobbying group says.

Under those regulations, employers with at least 100 employees must, starting this year, offer coverage to no less than 70% of their full-time employees — those working an average of 30 or more hours a week — or be liable for a $2,000-per-employee penalty.

Then in 2016 and succeeding years — the so-called employer mandate will also include organizations with at least 50 employees. Those employers, to avoid the $2,000 per employee penalty, must extend coverage to at least 95% of their full-time employees.

To encourage employers to continue to offer coverage, the 70% coverage test requirement should be extended, says the head of the Washington-based American Benefits Council.

“Given the enormous complexity of the rules, policymakers should extend the 70% standard beyond 2015, and/or implement a glide path that gradually phases the percentage from 70 to 95 over several years,” American Benefits Council President James Klein said in letter sent Wednesday to House Speaker John Boehner, R-Ohio, and House Minority Leader Nancy Pelosi, D-Calif.

Mr. Klein also said the council supports legislation — expected to be considered by the House this week — that would change the Patient Protection and Affordable Care Act definition of a full-time employee to one working an average of 40 hours per work. The ACA now defines full-time employees as those working an average of 30 hours per week.