Bureaucratic nightmare for health insurance for part time employees

[eridani]

Health Affairs Blog
August 31, 2012
Implementing Health Reform: A Summer Lull
http://healthaffairs.org/blog/2012/08/31/implementing-health-reform-a-summer-lull/

Employment Status And Waiting Periods

On August 31, 2012, the IRS released Notice 2012-58 addressing the question of how full-time employment status is to be determined for deciding whether an employer owes a tax penalty for under section 4980H for failing to provide health insurance (or adequate or affordable health insurance) to full-time employees who consequently receive premium tax credits. On the same day, the IRS, Department of Labor, and Department of Health and Human Services jointly released notice 2012-59 addressing the question of how the ninety-day waiting period limit for employment-based health insurance enacted by the Affordable Care Act as section 2708 of the Public Health Services Act would be applied.

Alternatively, if the employee worked on average less than 30 hours a week, the employer can treat the employee as a part-time employee for a subsequent stability period and not offer insurance. The employer can take up to 90 days for an "administrative period" before the stability period begins during which the employer can determine eligibility and add the employee to its health insurance program. In no event, however, can the combined measurement period and administrative period extend beyond the last day of the first calendar month beginning on or after the one-year anniversary of the employee's start date.

Ongoing employees with variable hours can also be made subject to measurement periods and stability periods, with the measurement periods lasting 3 to 12 months and the stability periods lasting for the same period of time but in no event less than 6 months. If an ongoing employee is determined to be part-time during any measurement period, the employer can deny coverage to that employee without risking a penalty for the next stability period. If the employee is determined to be full-time during the measurement period, the employer must insure the employee for the following stability period or risk paying a tax penalty.

In sum, variable-hour employees may be insured one year, not insured the next, depending on their hours of work during the prior "measurement period." An employer can take up to 90 days following the measurement period for an administrative period before coverage begins, but if an employee is already covered under a stability period, the employer must make the continuing eligibility determination before the stability period ends to avoid gaps in coverage.

Comment by Don McCanne of PNHP: The administrative nightmare created by the Affordable Care Act not only adds to the expensive public and private bureaucratic waste that characterizes our health care system, it also fails to adequately address fundamental issues such as equity and universality. This brief summary of the rules establishing whether or not an employer must provide coverage for employees based on a variable number of hours worked and on seasonal variations in employment, and how soon the coverage must be offered, demonstrates not only the complexity of just this one issue, but also demonstrates how easy it is for an individual to fall through the cracks.

Under a single payer system, everyone is covered. There would be no need to be concerned about part time and seasonal work in determinations of eligibility. And there would be no need for all of the rest of the administrative complexity that this law creates - complexity that shoves patients in and out of different programs and will leave 30 million with no coverage at all. Insane.

My comment: This does not discuss at all the problems with going on and off of Medicaid for people who lose jobs and may possibly get rehired in 6 months or so.

[Zalatix]

1. Remember, I warned people that these things would come up.

That dreadfully stupid mandatory purchase law is starting to act like the cancer it is.

[eridani]

2. Which is why single payer activists have to be ready to MOVE--

--when the wheels eventually come off.