Friday, August 09, 2013

Affordable Care Act [ACA]/Minimum Wage

I have been trying for months to find out if there is any way an employer can provide a defined contribution to an employee so that the employee can purchase individual health insurance.  My difficulty may be that the IRS has not come out with those regulations.
There are some companies  that are promoting that  this is possible to do with a health reimbursement account [HRA]. Some are even telling employers with 2 to 50  to drop their group coverage and  set up an HRA. Beware of such claims. Do not drop your coverage until you know if this is best for your company.

Speaking of ACA the definition of full-time employees is 30  hours. If you are providing group health insurance keep this in mind as there are participation requirements for group coverage. Many  small businesses set a higher number of hours  and under the new rules would have to include people working  30 hours or more in their group coverage. The participation requirement under the Small Business Health Option Plan is 70% of full-time employees.

AB 10 is working its way through the legislature. This would increase the minimum wage to $8.25 in 2014, $8.75 in 2015, $9.25 in 2016, $9.50 in 2017 and $10 in 2018. The cost of living increase has been taken out of the bill.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA  94116

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