What do Hotel HR Managers Need to Know About the Affordable Care Act and the January 1, 2015 Deadline for Compliance?
By Marjorie Obod Attorney, Dilworth Paxson LLP | December 14, 2014
Co-authored by Matthew I. Whitehorn, Partner, Dilworth Paxson LLP Tax Group
What is the Affordable Care Act?
The Patient Protection and Affordable Care Act of 2010, commonly referred to as the Affordable Care Act ("ACA") or "ObamaCare," was enacted in March 2010. Many of its provisions took effect on or near enactment and many others took effect on January 1, 2014. The ACA significantly impacted the structure of healthcare in the U.S. by making major changes such as imposing waiting period limitations, mandating coverage of children through age twenty-six (26), setting limitations on out-of-pocket costs, and eliminating pre-existing condition coverage exceptions.
The ACA was intended to ensure that every American has access to affordable health care, regardless of health status and income level. In part, the ACA does this by offering consumer discounts in the form of premium tax credits or cost-sharing subsidies, on insurance plans offered through federal or state-sponsored exchanges (officially, "marketplaces"). Additionally, the ACA offered States expanded Medicaid in order to cover more people whose budgets are unable to accommodate the rising cost of health care.
At this point, most Americans are familiar with the ACA's "individual mandate," or the requirement that all applicable individuals enroll in health care coverage or pay a special tax to the federal government. What hotels need to know is that the ACA also imposes a "shared responsibility" on employers. Beginning on January 1, 2015, certain employers must offer adequate and affordable minimum value health care coverage to their full-time employees, or face steep nondeductible excise taxes. Thus, it is essential that all employers, including those in the hotel industry, familiarize themselves with this requirement, known as the "employer mandate."
Does the ACA Apply to Your Hotel?