A long-standing government tradition holds that legislation be as complex as possible, so it will come as no surprise that you'll need a compass and a guide dog to navigate the 900-plus pages of the Affordable Care Act that comes into full bloom in 2014.
The law designed to provide health insurance for the uninsured is so dizzying that not even industry professionals grasp it all. I know this because I saw several dozen of them -- agents, brokers, human resource executives -- transfixed during a two-hour panel discussion at the monthly meeting of the Golden Gate Association of Health Underwriters in Pleasant Hill, where four experts dissected the changes that health care reform will bring.
Of foremost interest to the audience was Covered California, the state-run health insurance exchange that will help direct the uninsured to affordable coverage. Brows were unfurrowed when Michael Lujan, director of the small business health options program, said his office will work with agents, not compete with them.
That was just the beginning. Each explanation begat questions. Such as: All large employers must provide affordable health coverage that meets minimum requirements.
What's large? What's affordable? What's minimum?
In reverse order: A plan must cover at least 60 percent of medical expenses. It must cost no more than 9½ percent of an employee's earnings. Large employers are those with at least 50 full-time employees or full-time equivalents.
What's a full-time equivalent?
That's the number of full-time jobs represented by the cumulative hours worked by part-timers.
How do you determine that?
Add all the part-time workers' hours in a month and divide by 120. If 12 workers put in 80 hours, that's 960 hours. Divided by 120, that's 8 full-time equivalents. If you also had 43 full-timers, your total is 51. Bingo, you're a large employer.
This law has enough complexities to make your eyeballs bleed.
A large employer who fails to provide health coverage is subject to an annual fine of at least $2,000 per employee, but with a caveat ("The first 30 employees don't apply," Lujan said. "It begins with the 31st employee). Well, sure, why count all employees?
Deciding to insure or pay a fine, known as play-or-pay, also applies to many individuals (the individual mandate). Among the exceptions: undocumented immigrants, Indian tribe members, those religiously opposed to health benefits, the extremely poor, the incarcerated and anyone receiving Medicaid, Medicare or veterans benefits.
Everyone else must play or pay ($95 per adult, $47.50 per child or 1 percent of family income, whichever is greater; the penalty increases in 2015). But take heart. There are subsidies available to persons earning between 138 and 400 percent of federal poverty level (currently $11,490 for an individual). I have no idea why 138 percent.
It all becomes a blur after a while: Seasonal employees need not be covered unless they work more than 120 days ... small businesses can earn tax credits by, among other things, paying 50 percent of employees' coverage ... new plans incur a transitional reinsurance fee of $63 per covered individual ... there will be a federal excise tax of about $500 each on any new policy. The list goes on.
"The Affordable Care Act is very flawed," Lujan conceded. "There are a lot of things that need to be tweaked or fixed."
Contact Tom Barnidge at firstname.lastname@example.org.