Employers Seek Flexibility with Obamacare Options for Part-Time Workers and COBRA Purchasers

Amidst the complexities of healthcare reform, employers are exploring various options under the Affordable Care Act (ACA) to provide coverage to their workforce. Two key areas of focus are part-time employees and individuals seeking COBRA continuation coverage.

Healthcare Options for Part-Time Workers

ACA regulations require employers with 50 or more full-time employees (FTE) to offer affordable health insurance to their full-time workers. However, no mandate exists for part-time employees, leaving employers with some flexibility in their approach.

For part-time workers, employers have the following options:

Extend Group Coverage: Employers can choose to extend group health insurance to part-time employees, offering them the same coverage and benefits as full-time workers.
Offer Part-Time Plans: Employers can develop part-time health plans that are tailored to the specific needs and schedules of part-time workers. These plans may have lower premiums and fewer benefits than full-time plans.
Contribute to Health Savings Accounts (HSAs): Employers can contribute to HSAs on behalf of part-time employees, providing them with tax-free savings to pay for healthcare expenses.

COBRA Continuation Coverage

COBRA is a federal law that allows employees to continue their employer-sponsored health insurance coverage after losing their job or having their hours reduced. Employers with 20 or more employees must offer COBRA coverage to eligible employees.

ACA introduced changes to COBRA that provide additional flexibility and affordability:

Premium Subsidies: For individuals receiving unemployment benefits, the American Rescue Plan Act (ARPA) provides COBRA premium subsidies covering 100% of the premiums.
Extended Coverage Period: ACA extended the COBRA coverage period from 18 months to 36 months for some individuals, including those with large medical expenses.
Premium Reduction: Employers can use their own funds to cover up to 50% of COBRA premiums, making it more affordable for employees.

Benefits and Considerations

Exploring these options under ACA can benefit both employers and employees. Employers can address the healthcare needs of their part-time workers and meet their legal obligations. Employees can gain access to affordable health insurance coverage and protect themselves and their families from medical expenses.

However, it is important to note that these options may require administrative adjustments and increased costs. Employers should consult with licensed insurance agents to determine the best approach for their organization.

By understanding the available options under ACA, employers can provide flexible healthcare solutions for their part-time workers and COBRA purchasers, ensuring that all employees have access to the coverage they need.