Health care exchanges are getting all of the attention, but employers need to take a closer look at their benefits packages because the nondiscriminatory provision of the Patient Protection and Affordable Care Act (PPACA) have the potential to cost them a lot of money.
So says Jay Starkman, the CEO of Engage PEO, a human resources outsourcing organization.
Under the provision, employers can no longer give preferential treatment when it comes to benefit plans. Everyone must have the same benefit options. The new provision is set to go into effect in January 2014, though this could be delayed as more guidance is scheduled to come down.
"It doesn't sound like a big deal, but when you take into account two very common practices that businesses have been following for years that would violate this provision, it really becomes meaningful, especially when you couple that with the penalties that are built into the act," Starkman said.
In one case, an employer would violate this provision if it pays for a greater portion of benefits for C-suite employees than others, Starkman said.
Often, executives build agreements into their contracts that their benefits are covered at a higher level or their families might receive coverage while the spouses and children of everyone else working for the company are not.
