Employers and unions alike are scrambling to come to terms with the Affordable Care Act (ACA), which establishes new rules for employment-related health coverage. Employers, however, currently face a heavier compliance burden than unions because of the employer mandate, which becomes effective on Jan. 1, 2014. Under the employer mandate, if an employer fails to offer all full-time employees and their dependents the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan, the employer risks crippling liability. Smaller penalties can be triggered when the coverage offered fails to meet a “minimum value” or an “affordability” requirement.
But why is the compliance burden heavier for employers than for unions if the employer agrees to cover bargaining unit employees under a multiemployer plan proposed by the union? The answer is simple but disappointing: if the multiemployer plan fails to satisfy the offer-of-coverage requirement, the minimum value standard or the affordability standard, the resulting liability exposure falls only on the employer. Thus, when the employer mandate becomes effective, employers will have what amounts to a duty to see to it that their full-time employees are offered employer-subsidized participation in a health plan that satisfies the statutory description, and that the offer is made at the proper time, and yet those employers participating in a multiemployer health plan may well have no direct control over the plan and no timely access to vital information.