As if the Patient Protection and Affordable Care Act hasn't had enough of an impact on the rapidly changing employee health care landscape in the U.S., a new piece of legislation may further complicate things. A new bill excluding veterans from employer-sponsored insurance plans may raise important questions on the nature of health care legislation and the responsibility employers have to their staff members.
Small-business owners have been especially impacted by the introduction of Obamacare five years ago, with companies on the cusp of the 50-employee mark sweating over laws requiring increased health care spending for full-time employees. This new bill may be the next major talking point in the balancing act between companies trying to control costs and employees looking for the best benefits packages possible.
New law excludes some veterans from employer plans
Under Obamacare, companies that employ 50 or more full-time workers must provide insurance benefits for these full-time staffers. However, a new law has provided some employers with a loophole they can use to avoid that financial obligation.
According to the Society for Human Resource Management, the Surface Transportation and Veterans Health Care Choice Improvement Act was signed into law the end of July by President Barack Obama. This legislation permits companies to exclude veterans who are currently receiving health care through the Department of Veteran's Affairs from the "50 or more" restriction governing employer insurance obligations.
Understanding the motivations
Some HR professionals may be concerned by the precedent such a law sets, introducing optional exclusions to employer health care plans. However, new law is intended to actually increase employment rates for veterans. By allowing employers to exclude former servicepeople who already have health insurance from the company-sponsored plans, employers are being incentivized to hire more veterans.
This is the aim of the stated Hire More Heroes Act of 2014, which was enacted for the same reason – namely, to encourage companies to employ more veterans by removing some of the additional Shared Responsibility mandates of the ACA.
While the law may provide some employers with financial relief, it may come at the cost of increased administrative and compliance-related headaches. For example, if a veteran eligible for exemption under the law determines the difference between a business being subject to the 50-employee-or-more rule or not, there may be reporting issues that business owners should address. Working with PEO companies is recommended in these circumstances, as this can provide access to expert HR advice to business owners who may not otherwise be able to afford to support an in-house staff.