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Companies may skip health care

The (Hackensack, N.J.) Record

HACKENSACK, N.J. – Some employers will save a lot of money by not offering insurance under changes made to the health care system.

For instance, an employer with 51 full-time employees who does not offer insurance will pay an annual “free rider” penalty of $42,000, beginning in 2014, said labor lawyer Mitchell Jacobs, who spoke recently at a Rutherford, N.J., symposium on changes to the health care system.

“The majority of the time, the amount of the penalty would be less than paying for health care,” said Jacobs. “It’s about three years in the future, but the penalty provision is the one most employers know about.”

Larry Shulman, a senior manager at the accounting firm KPMG, talked about some of the tax provisions, including a 0.9 percent Medicare tax on wages exceeding $250,000 for those married filing jointly. Employers will be obligated to withhold the tax, and the employer may be responsible for paying it if it is not properly withheld, Shulman said. A new 3.8 percent Medicare tax on unearned investment income for couples making more than $250,000 begins in 2013, he said.

Those employers who do offer health care will be able to save a lot of money by offering wellness programs such as those that help employees quit smoking or lower their cholesterol, said Dan Ritson, a lawyer at Hackensack-based Herten Burstein Sheridan Cevasco Bottinelli Litt & Harz LLC.

Beginning next year, the federal government will offer billions of dollars in new grants for businesses with fewer than 50 employees that offer wellness programs, he said. Rules on how to apply and how it will work have not yet been issued, Ritson said. Discounts on health insurance premiums at companies with wellness programs will be increased beginning in 2014, Ritson said.

To avoid discrimination lawsuits, employers must be sure to give all workers one opportunity a year to use wellness program benefits. Employers also must offer alternative programs to those who cannot participate in a particular program for medical reasons, Ritson said.