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Employment Law Alert – Supreme Court Rules Health Care Act Constitutional

June 29, 2012 |
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On June 28, 2012, the U.S. Supreme Court, in National Federation of Independent Business et al. v Sebelius, Secretary of Health & Human Services et al, 132 S.Ct. 2566 (2012), ruled that the Affordable Health Care Act (“ACHA”), implemented by President Obama in 2010, is constitutional. Many of the provisions of the ACHA should have already been implemented and this decision provides employers with the certainty needed to plan and implement the balance.

Below is a summary of the ACHA’s provisions directly impacting employers:

Employer Penalty for Not Offering Coverage:  Effective January 1, 2014
The law will not require employers to offer health insurance however, employers with more than 50 full-time employees that do not offer coverage will have to pay a penalty. Employers will pay $2000 per full time employee, for every full-time employee in excess of 30, if even one employee receives a government subsidy or purchases coverage in an exchange.

Employer Penalty for Unaffordable Coverage:  Effective January 1, 2014
If an employee opts out of an employer plan because coverage is “unaffordable”—that is, if the premium exceeds 9.5 percent of family income—the employer must pay a $3,000 penalty for each full-time employee who receives a government subsidy and purchases coverage through an exchange.

Expanded to Include All Health Plans, the Requirement to Include Adult Children, and to Not Impose Certain Limits: Effective January 1, 2014
All employer group health (including grandfathered plans) plans must offer coverage to adult children up to age 26, may not impose lifetime or annual limits on benefits, and may not impose pre-existing condition exclusions.

Tax Credits for Small Employers:  Effective in 2010
Small employers with less than 50 employees and average annual wages of $50,000 or less are eligible for a tax credit on employer contributions to health insurance premiums, if the contribution is at least 50% of the total premium.

Breaks for Nursing Mothers: Effective in 2010
A provision in the law amended the Fair Labor Standards Act to require employers, with some exceptions, to furnish “reasonable break time for an employee to express breast milk for her nursing child” for one year after the child’s birth. It requires employers to provide a place, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public, that may be used by an employee to express breast milk.

W-2 Reporting:Effective in 2012
Employers must report the value of employee’s health coverage on employee W-2 Forms.

For more information, please contact any member of Berliner Cohen’s Employment Law & Litigation Group:

Roberta S. Hayashi

Christine H. Long

Susan E. Bishop

Kara L. Arguello



©2012 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.

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