Access to group health insurance is one of the most important perks of a modern full-time job. With the cost of health insurance increasing at a tremendous rate, decent coverage is rapidly becoming unaffordable for the average middle-class consumer. Meanwhile, thousands of small and medium-sized employers choose to cancel their group health insurance plans every year. As the economy continues to stagnate, these difficult decisions represent necessary cost-cutting measures.
If you're lucky enough to enjoy access to group health insurance, you may be wondering about your employer's obligation to provide these benefits to its employees. In recent years, the rules that govern employer-issued health insurance have gone through many changes. Passed by the U.S. Congress in 2009, the Affordable Care Act dramatically alters the way in which health insurance policies are crafted and issued. During the law's gradual phase-in period, plenty of questions about its implications have arisen.
One of the law's signature changes is a provision that requires employers to provide health insurance coverage for any employees who work more than 30 hours per week. Going forward, these employees are to be considered "full-time" and must receive all of the benefits previously reserved for workers who work more than 40 hours per week.
However, there's an important exemption to this provision that may affect millions of American workers: Businesses that employ fewer than 50 full-time employees are exempt from this requirement. Also, businesses that operate small, isolated branches located more than 75 miles from one another aren't required to provide benefits for the employees who work at those branches.
In addition, your employer isn't required to apply these new benefits on a retroactive basis. In other words, it may reduce the number of hours that it permits its current employees to work in order to avoid the obligation to provide health insurance benefits. While salaried employees who are implicitly required to work more than 30 hours per week can't be furloughed in order to meet this goal, workers who earn an hourly wage may see their hours cut as a result of the requirement.
Likewise, some full-time employees might see their positions changed into part-time "hourly" positions or eliminated altogether. On the other hand, the new requirements are a boon for the health insurance companies that must add employees to handle the expected increase in demand. Although the new law permits employers to avoid providing health insurance to full-time employees by levying a "penalty" charge on each non-covered employee, few employers are expected to pay this expensive fine.