In the wake of the Supreme Court’s recent decision upholding President Obama’s healthcare reform initiatives – specifically, the minimum coverage provision of the Patient Protection and Affordable Care Act requiring every qualifying citizen to purchase a minimum level of health insurance – the ramifications of this historical legislation will no doubt be significant. For employees, there is good news: beginning in 2014, all employers with more than 50 full-time employees must provide their employees with health insurance.
However, as follows any new legislation imparting greater responsibilities upon employers, there will be companies that try to evade their new duties to the detriment of their workers. For example, the penalty smaller businesses face for not providing their employees with coverage ($2,000 per employee) may be, in some circumstances, a lower cost than actually providing health insurance to employees. These companies may be more likely to act in violation of the law. (Fortunately, employees who are not offered affordable health insurance coverage by their employers will receive an income-indexed premium and out-of-pocket cost-sharing subsidies. These subsidies will ensure that low-income workers are not disadvantaged over higher-income employees when trying to obtain health insurance.)
Moreover, some employers have tried to become creative by classifying their employees as independent contractors to avoid reaching the 50-employee mark. However, simply calling an individual an “independent contractor” as opposed to calling the worker an “employee” does not make it so; there are many factors other than mere title that factor into the analysis of whether an individual is an independent contractor or employee. For example, where employers continue to pay workers in the same manner or retain control over the manner in which the workers do their jobs, a “reclassification” from employee to independent contractor may run afoul of both federal and state laws. In addition to adverse implications the new health care law, employers that improperly classify workers as independent contractors may be subject to liability under the minimum wage and overtime provisions of the Fair Labor Standards Act and the Illinois Minimum Wage Law.
For more information about the Affordable Care Act, and the provisions most relevant to you, visit the federal government’s website, HealthCare.gov.