Six months ago, Congress passed the Patient Protection and Affordable Care Act ("PPACA" or "the Act"), as amended by the Health Care and Education Reconciliation Act of 2010. The hospitality industry, in particular, will be confronted with unique challenges to comply with PPACA's regulations, including a broader definition of a full-time employee, expanded employee protections with respect to breaks and whistleblower rights, and notice requirements. Below is a brief summary of five things all hoteliers need to know now about health reform.
1. Nursing Breaks for New Mothers
Effective immediately, you must provide unpaid, reasonable break time to non-exempt female employees who are nursing to express milk for up to one year after the birth of the child. A designated break room must be provided that is not a restroom and must be shielded from view and free of intrusion. (This space could include a vacant guest room or other private meeting space.) For small hotels (less than 50 employees), this break time can be exempted from this provision if the employer can demonstrate undue hardship.
2. New Definition of Full Time Employee
A full-time employee is now defined as an employee who works at least 30 hours per week. If an employer has at least 50 full-time employees, employers are required to provide "minimum essential" health coverage by 2014 or else potential financial penalties could be assessed. Accordingly, you must evaluate your workforce to determine if you could reach this key 50 full-time employee threshold by looking at the hours worked by all employees, including part-time employees, in a given month. This poses unique challenges when employees fluctuate their hours working over 30 hours per week in one month, but not the next. Under PPACA, the employee would be eligible for health benefits retroactively for the month he or she qualifies, and then could be cut off from the plan the next month if he or she fails to meet the hours requirement.
3. Expanded Whistleblower Protections to Employees
The Act created and expanded whistleblower provisions to the Fair Labor Standards Act ("FLSA"). Now under the FLSA, protections are provided to individuals who (i) receive a premium tax credit or subsidy for a health plan (thus, creating penalty exposure to the employer); (ii) provide information to the employer or the government regarding a violation, act or omission the employee reasonably believes to be a violation related to PPACA; (iii) testify or is about to testify in a hearing about a violation of PPACA; (iv) assist or participate in a proceeding about a violation of the Act; or (v) or object to, or refuse to perform, any activity or assigned task the employee reasonably believes to be a violation. These new protections are significant in that they provide employees with the authority to challenge your actions in administering or implementing PPACA's requirements.
Accordingly, you may not discharge, demote, suspend, reprimand, or in any other way discriminate against an employee for engaging in such activities protected by PPACA, and could face investigations or enforcement efforts from the Department of Labor based on employee complaints.
4. Potential Employer Penalties For Not Providing Minimum Essential Benefits
Under PPACA, all individuals are required to obtain "minimum essential" health coverage or pay a penalty by 2014. To help individuals obtain health coverage, the government will be offering federal tax credits or subsidies in order for eligible individuals to pay for insurance through an exchange that will be set up by the states.
By contrast, employers (with at least 50 full-time employees) are not required to provide health insurance to employees, but will be penalized if at least one employee receives government assistance or buys coverage through an exchange because the employer coverage is either "unaffordable" or "insufficient." In determining the number of full-time employees, both full-time employees and full-time equivalents are counted toward the 50 employee threshold. If coverage is not offered at all by 2014, the employer penalty will be $2,000 per full-time employee (although the first 30 full-time employees are excluded). If coverage is either unaffordable or insufficient, the penalty will be the lesser of $2,000 per full-time employee (with the first 30 employees excluded) or $3,000 per full-time employee who receives government assistance.
5. Grandfather Status
Employers with a qualifying plan as of March 23, 2010, may be permitted to grandfather their current plan in order to avoid some of the new provisions of PPACA. For example, grandfathered plans will not have to comply with certain reporting provisions and can avoid PPACA's mandate that the health plan provide "essential benefits." Additionally, grandfathered plans will not be required to have first dollar coverage for preventative health services with no cost sharing.
However, grandfather status has some downsides and can be easily lost; thus, you should conduct a detailed analysis of your health plans and future plan goals to determine whether you want to take advantage of grandfathered status.
* * *
Health care reform will have significant impact on hoteliers across the United States. By knowing PPACA's requirements and timelines, you'll be able to make informed decisions and understand how to implement the new requirements. As identified above, you should already be taking a number of steps to comply with the Act's requirements and begin to prepare for future obligations.
As appeared in American Hotel & Lodging Association Newsletter, October 2010