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OPINION: Employers need rules to comply with health care reform

Posted On: Jul. 29, 2012 12:00 AM CST

We hope last month's Supreme Court decision largely upholding the constitutionality of the health care reform law spurs federal regulators to get moving on guidance to help employers comply with the law.

Many of the key provisions affecting employers go into effect in 2014, but final regulatory guidance on those provisions has yet to be provided.

The importance of providing guidance to employers, as we report on page 1, cannot be overstated. One provision subjects employers to financial penalties if they do not offer coverage to full-time employees, but the Patient Protection and Affordable Care Act's definition of a full-time employee is sparse: someone who works an average of at least 30 hours a week.

That definition cries for guidance. For example, many retailers employ workers whose weekly hours can fluctuate substantially. In some months—say the December holiday season—employees may work far more than 30 hours a week. But in other months, employees may work far fewer than 30 hours a week.

Without regulatory guidance, retailers won't know whether they will be subject to a health care reform law penalty, if they do not offer coverage to those employees whose average hours can vary so significantly.

Plenty of other issues need to be settled as well. A strict reading of the law suggests that, if just one full-time employee is not offered coverage, employers will be liable for a $2,000 penalty for each full-time worker they employ.

In a notice issued more than a year ago, the Treasury Department said it “contemplated” that forthcoming regulations would clarify that the assessment would not apply, if an employer offered coverage to all “or substantially all” of its full-time employees.

Regrettably, there has been no follow-up since then, and employers still lack definitive guidance on when the $2,000 penalty will apply and when it will not.

In all fairness, regulators are overwhelmed. They are few in number and are tasked with writing rules for a huge and complicated law.

That said, employers are entitled to rules that will give them the time they need to make the necessary changes to comply with the law.

To ensure that, publishing health care reform law rules as quickly as possible should be the highest priority for federal regulators.