Capitol Hill

After a titanic, yearlong struggle in Congress, President Obama recently signed historic health care legislation into law. Now you need to fully understand the law's complex requirements and its potential effects. Although the law's major components do not take effect until 2014, there are provisions that could affect employer health care plans as early as late this year.

Early changes

First, any employer group health care plan that was in effect on March 23 of this year is considered "grandfathered" under the new law and will operate according to somewhat different rules than new plans. However, plans can lose their grandfathered status, and the law gives the secretary of health and human services wide latitude to determine, through the regulatory process, what changes to a plan will constitute loss of grandfathered status.

One of the new law's first ramifications is that all employer group health care plans must comply with insurance reforms that take effect in September. These reforms will be implemented by insurance companies but may affect plan benefits and/or premiums as early as late this year or early 2011.

The law provides a tax credit for small businesses that offer health care plans; the tax credit begins this year and ends in 2015. Businesses with 10 or fewer full-time employees with a per-employee compensation level of $25,000 or less are eligible for the credit's full amount, and businesses with up to 25 full-time employees and a per-employee compensation level of $50,000 or less are partially eligible. The credit amount is 35 percent of the employer's premium costs this year through 2013 and 50 percent for 2014 and 2015.

Beginning in 2011, employers will be required to disclose the value of each employee's health care benefits on employees' Form W-2s. Also in 2011, the cost of over-the-counter medicines will not be eligible for reimbursement from tax-deferred accounts unless obtained with a prescription.

2014 provisions

The major employer requirements will take effect in 2014 when employers with 50 or more full-time employees will have to offer employees "minimum essential coverage" or pay a penalty. Employers will not face a penalty if they pay at least 60 percent of the cost of coverage and the coverage is determined to be "affordable" with respect to an employee's income. Employers with fewer than 50 full-time employees are exempt from the requirement.

Employers with 50 or more employees who choose not to offer coverage must pay a penalty of $2,000 for each full-time employee if at least one employee obtains subsidized coverage through a newly established state insurance exchange (the first 30 full-time employees are exempt from the penalty calculation).

Also in 2014, all states must establish American Health Benefit Exchanges designed to facilitate the purchase of qualified health care plans. The exchanges will enable individuals to enroll in health care plans and small employers to offer employees a choice of plans. Insurers will be required to offer coverage via the exchanges according to new insurance market rules.

In addition, employers will be required to report to the government certain information about the health care benefits they provide employees. Further, employers with more than 200 full-time employees will be required to automatically enroll employees in their health care plans, but employees may choose to opt out of such coverage.

The battle continues

This is just a brief overview of the new law's key employer-related provisions. Precisely how these and other provisions will be implemented ultimately will be determined through an extensive regulatory process that will unfold during the coming months and years. NRCA recommends you consult employee benefit advisers and other professionals as necessary to ensure compliance.

The battle over this law is expected to continue not only in the regulatory process but also in the courts and will be an issue in the 2010 and 2012 elections. NRCA will work on all fronts to advance the interests of roofing professionals.

Duane L. Musser is NRCA's vice president of government relations.