Frank Morris, Jr., and Adam Solander Quoted in Article, “Beware of Employee Promises Not to Seek Coverage in ACA Exchange, Attorney Says”

Bloomberg BNA's Daily Tax Report

Frank Morris, Jr., is a Member of the Firm in the Litigation, Employee Benefits, and Labor and Employment practices, in the Washington, DC office, and Adam Solander, an Associate in the Health Care and Life Sciences practice, in the Washington, DC, office, were quoted in an article titled "Beware of Employee Promises Not to Seek Coverage in ACA Exchange, Attorney Says."

Following is an excerpt:

Employers have been receiving those requests from employees who may have read something online or talked to someone about provisions in the Affordable Care Act requiring many employers to provide health care coverage to workers or face penalties starting in 2014, said Adam C. Solander.

However, employers should guard against making decisions about reducing service hours based on the word of employees who promises not to seek subsidized health insurance coverage in a state or federal exchange, Solander said.

Solander said those types of employee promises written into contracts would not protect an employer from liability under ACA's excise tax rules if employees were to disregard the contracts and enroll in subsidized coverage through an exchange.

Solander said that employers should resist that response to ACA's "pay or play" mandate, even if "it is something you feel you might want to do, especially for good employees." ?...

Employers with collective bargaining agreements might have to modify those agreements based on the Treasury and IRS proposed rules on coverage of dependents up to the age of 26, Frank C. Morris Jr.

Morris said employers might have to reopen contract negotiations to comply with ACA's proposed rules requiring employers to include dependents up to the age of 26 in any offers to provide health insurance coverage to full-time employees (04 DTR G-6, 1/7/13).

"This is just one of the examples of situations where the requirements of the statute may create situations that will impact on collective bargaining obligations and require some midcontract reopeners, potentially, to deal with those situations," Morris said.