Jim Holland

Changes, challenges will make Obamacare the top employment issue in 2014

Updated: 2013-12-10T23:49:07Z

By Jim Holland

Special to The Star

Uncertainty about how the Affordable Care Act will unfold is creating havoc for employers. It’s possible that executive orders will unilaterally change the directives being debated, that more provisions will be postponed or changed — or that the ACA will simply implode under its own weight.

This ambiguity will overshadow every other employment issue in 2014.

While the employer mandate to provide ACA-compatible health insurance has been postponed until 2015, what hasn’t changed is the requirement to provide health care coverage within 90 days of employment for any worker who meets eligibility for a company-sponsored plan. For companies that traditionally have waited longer to provide coverage this change translates into higher employer costs.

Self-insured employers also must make sure the plan or plans they offer meet ACA requirements, which tend to be more stringent than some plans previously in place.

The ACA’s effect is far-reaching and significant, but it is not the only issue about which employers need to be fluent.

• The Fair Minimum Wage Act of 2013, introduced into the Senate in March, now is in committee. This proposed legislation seeks to raise the minimum wage to $10.10 in three annual installments by 2015. To make this increase more palatable for employers, the bill would allow small businesses to deduct up to $500,000 for equipment and expansion costs during the first year. Currently, companies have to amortize those investments over several years.

The bill is likely to be slowed by the bigger issue of the ACA and by President Barack Obama’s limited political clout.

• In March 2014, new Office of Federal Contract Compliance Programs regulations take effect. They require federal contractors and subcontractors to demonstrate that they are meeting government-recommended percentages of 8 percent veteran and 7 percent disabled employees. Employers who don’t reach these quotas will have to prove they have made good faith efforts to do so.

• Employers can expect to see increased success in the enforcement of arbitration agreements — should they use such programs. Though some people (attorneys included) argue that arbitration agreements result in “split the baby” awards and can actually increase the costs of litigation, these agreements do eliminate the risk of a “runaway jury” awarding an employee millions of dollars for a relative minor complaint against the employer.

• The U.S. Supreme Court recently announced it will render a decision regarding the ACA birth control mandate. This will be an important decision for employers that object to ACA provisions requiring all companies to cover certain reproductive health services without a co-pay. The Supreme Court expects to hand down its ruling sometime in June 2014.

• Despite recent court decisions that have criticized the Equal Employment Opportunity Commission’s position on criminal background checks, employers should expect to see the commission continuing to increase pressure on businesses who use these programs as part of the employee interview process. The commission says employers must be able to show that policies for such checks are directly job-related and do not necessarily exclude those with certain convictions.

The final implementation of the Affordable Care Act may so dominate employers’ political landscape that not much else will happen until it’s resolved.

In the interim, employers should act. Steps to take now include investigating whether to implement an arbitration program and add or expand employment-liability insurance. Most of all, understand that legal and financial implications have never been greater. When specific issues emerge, don’t guess on the answers — engage professional guidance.

Jim Holland is a partner in Fisher & Phillips’ Kansas City office and practices labor and employment law.

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