Farmers, ranchers and other agricultural employers expressed relief about the Obama administration's decision to delay by 12 months compliance with the employer mandate provision of the federal Patient Protection and Affordable Care Act. Farm employers say they now have extra time to decipher the regulations that surround the law's implementation.
The law, often referred to as Obamacare, requires employers of 50 or more full-time-equivalent employees to offer health coverage or face fines. The mandate was originally scheduled to take effect next Jan. 1. But Treasury Department spokesman Mark Mazur said last week the administration had decided to delay that provision until 2015.
California Farm Bureau Federation Director of Labor Affairs Bryan Little, who also serves as chief operating officer of the Farm Employers Labor Service, said the announcement brings relief to many employers who had become increasingly concerned about the cost and complexity of the employer mandate.
"You can hear employers everywhere breathing a sigh of relief, in part because they have more time to figure this out, and because it will give the regulators some time to finish writing their regulations," Little said.
He cautioned that the delay will not affect other mandates associated with the Affordable Care Act, such as the requirement for employers to furnish a U.S. Department of Labor notice of the availability of health benefits exchanges. The delay also does not apply to the individual mandate, which requires individuals to provide their own health insurance if they don't have insurance through an employer.
"There's a lot of speculation about what employers might do: If their employees are responding to the individual mandate to provide their own coverage, they're getting a taxpayer subsidy through the health benefits exchange, and they're reasonably happy with what they have, that could encourage some employers to choose not to offer coverage in 2015 and pay the tax penalty," Little said.
Farmer Justin Micheli, who grows peaches, walnuts and prunes in Live Oak, has spent the last several months working with his office staff, attending seminars and tallying employee hours to see if he qualifies as a large employer required to provide health care under the ACA.
"It's a major, looming concern for any mid-size farmer, especially because there has been no clarity of what a seasonal employee is, depending who you ask and what seminar you are attending. It's been an absolute struggle," Micheli said.
He added that while he agrees there should be some sort of plan for those who do not have access to health care coverage, he hopes the Obama administration takes the extra time to clarify the policies, "so employers have an opportunity to fully budget it, absorb it and prepare for it."
Mike Casey, who handles risk management and human resources for Harris Farms in Coalinga, has spent the past year researching how Obamacare will impact the company. He also pointed to the definitions of seasonal or part-time employees as a key factor.
"Right now, we're looking at potentially 200 additional employees that may be eligible for some form of health care with the new rules," Casey said. "We are still kind of in flux. We have not made any decisions and probably won't until the end of the month."
Casey said Harris Farms offers "rich" health care benefits for its full-time employees, but extending those to additional employees would mean "something has to give."
"With all of the extra coverage mandates, extra fees, charges and tax implications that are associated with Obamacare, all of that adds up to a lot of money that has to come out of something and unfortunately, it's ultimately going to come out of people's benefits," Casey said. "We have all of Obamacare to worry about, union contracts to worry about, and yet, we must still try and provide some form of benefit that is attractive to get people to want to work for us."
Under the law, part-time and seasonal workers—those who work 30 or fewer hours per week or fewer than 120 days in a year, are not counted toward the 50-employee threshold.
Employers with variable-hour or seasonal employees who work more than 120 days will be allowed to use a "measurement period" to establish the actual employment pattern of that employee. That is important because an employer is not required to offer insurance to workers who do not work full time during that "measurement period," which can be as short as three months or as long as 12 months.
Casey said he knows firsthand how overwhelming sorting through the ACA can be for a business, and suggested that growers and businesses that are affected "find a good insurance broker and a good health care consultant who doesn't have any skin in the game."
Small employers—with fewer than 50 full-time-equivalent employees—are generally exempt from penalties related to not providing health insurance.
The Treasury Department was expected to publish sometime this week formal guidance describing the delay in the employer mandate.
Agricultural employers seeking help in understanding the health care mandates may contact FELS at 800-753-9073 or email@example.com.