BizLawBuz …. The Power of Know

With all the buzz about health care reform, few are aware of a provision within the Patient Protection and Affordable Care Act (”PPACA”) that requires an employer to provide “reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth each time such employee has a need to express the milk.” In addition, employers must provide “a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by [a nursing mother.]”

I’m an employer – how do I interpret this provision?
Nursing employees should be given a “reasonable” amount of break time as frequently as needed, requiring employers to be flexible. Unfortunately, there is not much guidance as to what is reasonable, and the frequency and length of time will likely vary between individuals. One source says nursing mothers need roughly one half-hour break for every four hours worked.

As mentioned above, a bathroom is not sufficient even if it is private, but an employer is not required to provide a dedicated lactation center. Temporary spaces are acceptable, as long as the space is functional for the nursing mother’s use, shielded from view, and free from any intrusion from coworkers and the public.

You do not need to compensate the mothers for breaks taken under this provision, although employers must ensure that the employee is completely relieved from duty during the break in order to avoid paying compensation during that time. Please note, if you are already providing compensated breaks to other employees, nursing mothers must be compensated in the same way as the other employees.

Does this apply to my company?
If you have fewer than 50 employees, this provision may not apply if compliance would impose an undue hardship. Undue hardship is determined by looking at the difficulty or expense of compliance in comparison to size, financial resources, nature, and structure of the employer’s business.

Please contact Wright Penning & Beamer for any additional questions related to PPACA and how it applies to your business.

Julie Pfitzenmaier

Still wondering how the federal Patient Protection and Affordable Care Act (”PPACA”) will affect you or your business? Not sure what changes you may need to implement to avoid penalties? You’re not alone. While the nation attempts to navigate the overhaul of the health care system, here are a few key points to help you understand some aspects of this complex law:

Dependent Coverage
For all employer-sponsored health care plans that provide coverage to dependent children of covered employees, PPACA will now require that the dependents’ coverage continue until the dependents turn 26 years old. This requirement is effective for all plan years beginning on or after September 23, 2010.

Penalties for Individuals
Starting January 1, 2014, individuals will incur a penalty for each month that they do not have health insurance coverage. In 2014, that penalty cannot exceed $95 for the year. In 2015 and 2016, the maximum penalty increases to $325 and $695, respectively, for each year.

Penalties for Large Employers
PPACA defines a “large” employer as one that employs 50 or more full-time employees working 30 or more hours per week. Large employers must offer “acceptable” health care insurance to employees starting January 1, 2014, or face penalties. “Acceptable” coverage means coverage that is affordable to the employee.

If a large employer does not provide any coverage, and for that reason an employee qualifies for a subsidy (or “premium credit”), the employer faces a monthly penalty, calculated as follows:
No. of full-time employees – 30 x $166.66 = Monthly Penalty
The $166.66 represents 1/12 of $2,000.

If a large employer does not provide “affordable” health insurance coverage, the monthly penalty assessed for each full-time employee that qualifies for a subsidy because of the lack of affordable coverage is 1/12 of $3,000. This penalty is not based on the number of full-time employees; only the number of employees that qualify for a subsidy.

It is still unclear whether the penalties imposed by PPACA might still be less than the cost of providing acceptable health care insurance, as some critics of the law have suggested.

Julie Pfitzenmaier

The Patient Protection and Affordable Care Act was enacted in March of 2010. One of the first provisions to go into effect from the Act is the small business health care tax credit. The purpose of the credit is to encourage small businesses to offer health insurance coverage to their employees for the first time or maintain coverage they have, and to help small businesses that employ primarily low- to moderate-income employees.

The IRS touts “three simple steps,” which can be found at http://www.irs.gov/pub/irs-utl/3_simple_steps.pdf, to determine if you qualify for credit in the 2010 tax year:

1. Determine your total number of employees (not including owners or family members),
2. Calculate the average annual wages of employees (not including owners or family members), and
3. You pay at least half the insurance premium for employees at the single coverage rate.

If for 2010, your total number of employees is less than 25, the average annual wages is less than $50,000, and you satisfy #3, the credit is likely available to you. The maximum credit, which goes to employers with 10 or fewer full-time equivalent employees and annual average wages of $25,000 or less, is 35 percent of premiums paid by eligible small business and 25 percent of premiums paid by eligible tax-exempt organizations.

Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return. For tax-exempt organizations, the IRS will issue further instructions on how to claim the credit.

Julie Pfitzenmaier