Healthcare Law Delay: What Does it Mean for Parks and Recreation?

By Stacey Pine, Kareem Murphy | Posted on July 10, 2013

Health-Care-Law-Delay-BlogOn July 2, the Obama Administration announced that it will delay the deadline by which employers must provide health insurance to full-time employees and dependents by a year, pushing it back to 2015.  

As you may recall, the Patient Protection and Affordable Care Act (ACA), enacted into law in 2010, mandated that "large employers," those who employed 50 or more full-time or full-time equivalent employees, must offer affordable and comprehensive health insurance coverage to full-time employees and their dependents by January 2014. Full-time employees are those who work more than 30 hours per week. The law applies to the private and public sector which means local governments will be penalized for not adhering to the law.

Since park and recreation agencies utilize seasonal employees, the 30-hour threshold provided significant concern as local governments feared that they would be required to offer health insurance to seasonal employees.  

Regulations released late last year, however, provided a safe harbor relative to seasonal employees by allowing employers to create their own "defined measurement period," spanning between three and 12 months, to be used in determining the employee’s full-time status. The regulations also provided employers the flexibility to determine the start and end months for the defined measurement period.  At the end of the defined measurement period, employers would enter into a "stability period" and would be required to offer insurance during that period to those seasonal employees who continued as an employee and who averaged 30 hours per week during the defined measurement period.

Since the law was enacted, employers have asserted that compliance would be difficult for a variety of reasons.  Part of the push back on the regulations was the complicated process by which employers will have to determine their full-time equivalent employees and verify that those entitled to employer-coverage have received it.  The burden of verifying coverage (in an effort to avoid the penalty) rests with the employer and not the employee.  This may be especially burdensome for local governments that employ seasonal employees as the local governments will be required to track, monitor and verify the "defined benefit" and "stability periods.”  

Fortunately, the Administration has realized the difficulties inherent to compliance and has pushed the compliance deadline from January of 2014 to 2015.

The one-year delay is, seemingly, a double-edged sword as it allows the Treasury Department to build up greater capacity to monitor businesses, but it also provides additional time for local governments to understand the reporting requirements.  

Related reading is available in the October 2012  Parks & Recreation Magazine and in a past Open Space blog post on what you need to know about the healthcare law and seasonal employees.  


DISCLAIMER: This article is not intended to provide legal advice, and none of the information in this article should be construed as legal advice or a legal opinion.  NRPA members are strongly encouraged to consult their attorneys and human resources professionals when interpreting relevant provisions of law or determining compliance strategies.