Welfare Benefit Plan ERISA News
July 2015

 
Crediting Employees for Hours of Service When
No Work is Performed and Keeping Employees on
Your Health Plan When They No Longer Work
In our last Newsletter we explained how an employee could move from full[-time] to part-time employment status and still remain on your benefits for as long as a year and a half under PPACA. In this post we take a deeper look at:
  1. which hours count as hours of 'work' or 'service' under PPACA; and
  2. how you may have to keep an employee on your health insurance for up to a year when they are no longer working (as opposed to having gone part-time).
Read the full article by Craig Gottwals, Esq., Benefit Revolution.
Clarifying Misunderstood Terms—
Seasonal Worker and Seasonal Employee
A seasonal worker is an employee who performs labor or services on a seasonal basis.... A seasonal employee is ... 'an employee who is hired into a position for which the customary annual employment is six months or less.' ... The seasonal employee is unique compared to part-time, variable-hour, and full-time employees ... because it does not factor in an employee's hours of service.... Seasonal workers are only relevant for determining if an employer is an Applicable Large Employer (ALE). Seasonal employees are only relevant when determining if a new employee can be placed into an initial measurement period. Source: Health Care Attorneys P.C.
Supreme Court Rules in Favor of ACA on Subsidies
IRC Section 36B (added by the ACA) provides that tax credits are available to individuals who purchase health insurance only on exchanges "established by the state." Only 13 states and the District of Columbia have established state exchanges, while 37 states have federal exchanges. Loss of the subsidies for 6.4 million enrollees that purchased insurance through federal exchanges could have made coverage unaffordable, which could put ACA into a death spiral.
The US Supreme Court recently ruled (6-3) that federal tax subsidies under the ACA are available to people who purchase individual health policies in both federal and state exchanges. The Administration argued that the overall intent of the ACA is clearly to provide tax credits in both federal and state exchanges. The majority opinion said "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter." Click here for more details.
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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.

 

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