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The major provisions of PPACA scheduled to take effect in 2014 affect employers with large numbers of part-time and low-paid workforces. For example, beginning in 2014 employers will be required to extend coverage to all employees working 30+ hours per week or face possible penalties. About a fourth of all survey respondents said they will have to take action to avoid possible penalties. This ranges by industry, from just 16% of financial services employers to 46% of employers in retail and hospitality. “Extending coverage to more employees will be a significant new expense for these employers,” said Tracy Watts, U.S. health care reform leader, “especially because other provisions regulate how much an employer can require employees to contribute to the cost and how good the coverage must be.” Also, in companies where pay is low, employees who are eligible for coverage are more likely to opt out of enrolling. For example, among large wholesale/retail and health care employers, opt-out rates average 19% and 18%, respectively, compared to just 8% among transportation, communication and utility companies, where pay is higher. Once the individual mandate goes into effect – which will require all individuals who can afford coverage to obtain it (or pay a penalty) – employers with high opt-out rates could experience a significant increase in enrollment.
The major provisions of PPACA scheduled to take effect in 2014 affect employers with large numbers of part-time and low-paid workforces. For example, beginning in 2014 employers will be required to extend coverage to all employees working 30+ hours per week or face possible penalties.
About a fourth of all survey respondents said they will have to take action to avoid possible penalties. This ranges by industry, from just 16% of financial services employers to 46% of employers in retail and hospitality.
“Extending coverage to more employees will be a significant new expense for these employers,” said Tracy Watts, U.S. health care reform leader, “especially because other provisions regulate how much an employer can require employees to contribute to the cost and how good the coverage must be.”