As you weigh the options of your restaurant’s offering health care insurance to employees, here are two important questions to consider.
How Much Health Insurance Do I Have to Offer if I Choose to Do This?
You already know this is a choice: if you have fewer than 50 full-time equivalent (FTE) employees, the health care reform act doesn’t require you to offer insurance to them. If you decide to do this — or have 50 or more FTEs — then you must offer “minimum essential coverage.”
The rub is that this has yet to be defined, beyond the idea that it offers “required essential health benefits.” There ultimately may be multiple definitions for this term — one from the federal government and a different one from the state where you operate.
However this eventually turns out, there are two requirements of you as an employer.
- First, you must cover at least 60 percent of the actuarial value of coverage.
- Second, the total cost to your employees can’t be more than 9.5 percent of their household income. This point poses a difficulty. There is no way for you to know what your employees’ household income is, or how many people there are in the household. Ultimately, each state exchange and the IRS are supposed to determine this — although it’s uncertain how that information will be conveyed to you. Realistically, that means all you can do for now is to meet the first requirement.
Do I Have to Provide Coverage to Full-time Employees from Day One?
The simple answer is “no.” When the reform act becomes law on January 1, 2014, you will have up to 90 days after a person is hired to provide insurance coverage to him or her. What happens on that 91st day depends upon the size of your company.