EMILY ARMSTRONG is an attorney with Milligan Lawless, PC, where her practice is focused in labor and employment-related matters and litigation and health
care compliance and regulatory matters. She has advised employers, employees and health care providers in matters related to the Fair Labor Standards Act,
Title VII, the False Claims Act, the Stark Law, and the Affordable Care Act.
DENISE M. BLOMMEL is an attorney in solo private practice in Scottsdale. She represents employers and employees in employment and labor matters. She is First
Vice Chair of Girl Scouts—Arizona Cactus-Pine Council; and a member of the State Bar of Arizona; State Bar of Nevada; American Bar Association; Community
Associations Institute; Scottsdale Area Chamber of Commerce; Scottsdale Bar Association; Arizona Employment Lawyers Association; and the St. Thomas More Society.
CHRIS GORDON is an Employee Benefits Consultant with CREST Insurance Group. He is an accomplished broker and consultant helping to ensure clients and
employees are prepared for implementation of health care reform legislation PPACA (Obamacare).
NICOLE SIMPSON is a CPA and partner with CPA firm Regier Carr & Monroe LLP, Tucson.
Warning! PPACA is a controversial, complicated and multifaceted collection of laws. This article, limited to PPACA’s shared responsibility of employers (“Play or Pay”) and employees and individuals (“Individual Mandate”), was prepared in September and October
2013. It is possible that some details or entire concepts in this article may have changed by the time of publication. Read this article
simultaneously with the latest version of www.healthcare.gov.
President Barack Obama, with his 2008 campaign emphasis on “Change,”
convinced both houses of Congress in 2010 to create a sea change in health care insurance through
the Patient Protection and Affordable Care Act (PPACA). 1 An uprising against PPACA, also known
as “Obamacare,” occurred during the 2010 congressional elections, and Mitt Romney, the 2012
Republican Presidential candidate, ran against PPACA as much as he did the President. Constitutional
challenges to PPACA were silenced by the U.S. Supreme Court in National Federation of Independent
Business v. Sebelius2 in June 2012. President Obama won re-election in November 2012. As of this
writing, PPACA remains the law of the land.
for health care coverage or to go there
directly if the employer does not offer coverage. The government refers to this program
as the “Health Insurance Marketplace.”
Arizona does not have a state marketplace but uses the federal exchange at
www.healthcare.gov. It is not in a “brick and
mortar” environment but is online and over
the telephone. Open enrollment for health
insurance coverage through the Marketplace
began Oct. 1, 2013, which, in conjunction
with the new Section 18B of the FLSA,
required employers to provide notices to
their employees by October 1. These notices
provide the Marketplace with evidence
about coverage or lack of coverage.
All active employees must have received
this notice before Oct. 1, 2013 and all new
hires after October 1 must receive it within
14 days of their hire date. This continues as
a requirement for every new hire. 5
The Individual Mandate—
coming in 2014
Every man, woman and child in the United
States will have to demonstrate by Jan. 1,
2014, that she or he has minimum essential
health care coverage or meet an exception.
Otherwise, that individual will be liable for a
tax penalty.
If individuals have health care coverage
through their job, or through the
Marketplace, or through Medicare, AHC-CCS, CHIP, Tricare, the Veterans
Administration, a Student Health Plan or a
grandfathered individual plan, they will not
owe a tax penalty. Other exemptions from
the tax penalty include:
1. Religious conscience: Members of religious sects that are recognized as conscientiously opposed to accepting any
insurance benefits.
2. Members of a recognized health care
sharing ministry.
3. Members of a federally recognized
Indian tribe.
4. No filing requirement: The individual’s
income is below the minimum threshold
for filing a tax return.
5. Short coverage gap: Being without coverage for less than three consecutive
months during the year.
6. Hardship: Has to be certified by the
Marketplace fka Exchange,
A hallmark of PPACA is “shared responsi-
bility.” This term translates into tax penalties
for individuals who fail to obtain health insur-
ance coverage, and for certain employers who
fail either to cover their employees with
health insurance or to provide their employ-
ees with affordable, acceptable and accessible
health insurance.
On July 2, 2013, the Obama Administration delayed the employer Play or Pay
requirements until 2015.3 The Individual
Mandate, which affects employees and other
taxpayers, remains in effect for January 1,
2014. Despite the delay of Play or Pay for
employers, Arizona employers and employees
need to know now what to expect and how
to prepare to comply with PPACA’s shared
responsibility requirements. Some of PPACA
is already in place. 4 Major portions of health
insurance reform will continue to occur
throughout 2014, 2015 and forward into
2018.
Health Care Exchange
Notices—in place Oct. 1, 2013
PPACA permits employees to opt out of
employer coverage and go to the exchanges
