Healthcare Reform: The Patient Protection and Affordable Care Act

Filled under: Healthcare Compliance on June 2013

The Patient Protection and Affordable Care Act, the new healthcare reform, has been approved as constitutional by the US Supreme Court. All healthcare providers on the territory of the United States will have to put into effect the terms of the law, until January 2014. The Patient Protection and Affordable Care Act (PPACA) has become also known as the Obamacare.

All employers have to put into practice what the new law states in about seven months. It is highly important for every employer to understand his obligations. Otherwise, under the terms of the law, employers may find themselves in the situation of paying a lot of money in penalties.

According to the Patient Protection and Affordable Care Act, until 2014, employers with more than 50 full-time employees will have to offer healthcare coverage to their workers. Large employers are advised to comply with the new law, as the cost of compliance is less than the one of noncompliance.


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Employers will be required to provide all their workers with health insurance coverage if they have 50 or more full time employees, who work 30 hours per week or 130 hours each month. Failing to do so draws many penalties. Penalties may include sums of $3,000.00 to $2,000.00 per employee, per year. Naturally, the fine will be this sum multiplied with the number of the employees eligible.

How to comply? The first step employers will have to complete is to determine if they have 50 full-time employees. However, they should be careful, as even though they may only have 45 employees who work full time, 130 hours a month, and 10 more employees who work 60 hours a month, they will still have to comply, offering all their employees healthcare coverage.

Employees in a company are considered by their total, according to the new law, so it doesn’t matter if they are part time or full time workers. When establishing a compliance plan, employers need to make sure that they understood all requirements of the law and everything that applies to their facilities.

The Patient Protection and Affordable Care Act was signed by President Barack Obama, back in 2010. It has been approved this month. In less than 7 months, this healthcare reform has to be fully implemented. Implementing it will surely be much cheaper than having to pay the penalties of not respecting the terms of the law.

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