Patient Protection Affordable Care Act and SCA

Federal Contractors must focus on how the Patient Protection Affordable Care Act (PPACA) may soon affect their bottom line. As the changes brought about by the PPACA Act approach, many Federal Contractors are unaware of the potential cost increases bearing down on them.

According to Cloud Business Advisors (an innovative employee benefits brokerage and consulting firm) and Proskauer law firm for Employee Benefits and (ERISA) law. There are four key components to PPACA:

  • Individual Mandate (delayed to 2015)
  • Subsidies
  • Penalties
  • Insurance Mandates
  • State Mandates
  • Employer Mandates

Companies must also adhere to the following PPACA mandates:

  • Individual Annual Penalties for Not Maintaining Coverage
  • Premium Assistance Tax Credit
  • 2013 Federal Poverty Guidelines
  • Exchanges: What the states are doing and not doing and how exchanges work
  • What is a Large Employer
  • Parent- Subsidy Controlled Group
  • Brother- Sister Controlled Group
  • Who do you have to offer coverage to
  • What are the Penalties and how to avoid them
  • Affordability Safe Harbors
  • 90 Day Waiting Period
  • Timing and Determination of Eligible Employees
  • Taxes and Fees

When the Department of Labor, Wage and Hour Division, Washington, DC was asked a question regarding how they would be involved in integrating the PPACA with the Service Contract Act (SCA); they responded that both the PPACA and Service Contract Act are separate and must be handled individually.

For example: If a contractor does not offer fringe benefits and pays cash in lieu of benefits to service contractor employees (which is permitted by SCA), is this a violation of PPACA since no benefits are offered?

This is just one example of many questions relating to SCA and PPACA that must be resolved by individual contractors and companies prior to 2014.

If you violate the SCA Act, you may face a DOL Compliance Officer who will investigate; but if you violate the PPACA Act you can face the IRS or another Federal Administrative Agency.

These investigations are time consuming and complicated, and take an experienced individual from your company to handle them. Under SCA you may face penalties and or debarment; however we have yet to see what penalties may be handed out for PPACA violations.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe-benefit obligations and provides your employees with valuable benefits.