March 5, 2013
WASHINGTON — Congress passed the Affordable Care Act two years ago, but many of the regulations included in that legislation have yet to be written.
That gap leaves an uncertain answer to whether the law’s mandate to provide medical coverage applies to agricultural employers.
“It’s a definite maybe,” said attorney Leon Sequeira. Sequeira spoke to the Ohio Farm Bureau delegation Monday while the group is in Washington for an education and lobbying trip.
Starting in January 2014, companies that meet certain employee thresholds will be required to provide health insurance for their employees and employees’ dependents.
“There are a number of problems when you apply the mandate to agriculture,” Sequeira said. “They wrote the law with the larger economy in mind. There are thousands of regulations not written, and there’s a lot of gray area. … There’s a whole lot of stuff that’s not been said about this law.”
The federal law requires companies employing at least 50 people full time (30 hours a week) or 50 full-time equivalents to provide essential, affordable coverage. If the companies fail to do so, the IRS will fine them, potentially in the tens of thousands of dollars.
Because of the way the law is written, some companies may keep employees at 49 or may keep more employees below 30 hours a week. Also, it could be cheaper for employers to pay a fine instead of providing any health insurance at all, or insurance their employees can afford, Sequeira said.
“It could come down to an issue of math and cost,” Sequeira said. “Rational people will do what is best for their business.”
The American Farm Bureau Federation successfully lobbied Congress to carve out an exception in the law for employers of seasonal workers. Currently, someone who works for 120 days or fewer for a company is considered seasonal, Sequeira said, but he believes the IRS is planning to change that definition.
The formula to determine who is full-time and the number of full-time equivalents is complicated. For agricultural employers, it’s even more complicated. And, while employers need to use data gathered this year to determine who should be covered beginning next year, all the regulations aren’t yet written.
“It’s a hugely complicated issue,” said Yvonne Lesicko, senior director of legislative and regulatory policy with Ohio Farm Bureau. “And we’re just at the beginning of it.”