Many Canadian companies may be unaware of the
EMPLOYER CONSIDERATIONS UNDER THE AFFORDABLE CARE
ACT FOR CANADIAN COMPANIES WORKING IN THE U.S.
full impact of the American Patient Protection and
Affordable Care Act (PPACA) or how it applies to
them. But with the next major deadline coming up
soon, that is about to change.
As of January 1, 2015, employers with 100 or more full-time
workers in the U.S. must offer affordable, comprehensive insurance
– or face penalties of $2,000 per full-time employee. In 2016
and later years, the number of employees triggering the obligation
drops to 50.
To put it simply, it is not only American companies that must
comply with the law. Foreign companies with operations in the
U.S. also must comply. The law is all about improved access; the
law is going to urge everyone living in the U.S. – push them, as
that penalty increases – to have health insurance.
MEDIUM- AND LARGE-SIZE COMPANIES
In 2015, medium- and large-size companies with more than 100
U.S. employees must offer health care to full-time employees.
Canadian companies that have operations in the U.S. should pay
attention to the total number of employees working in U.S. locations.
Several smaller offices that together total more than 100
employees will need to offer health insurance in 2015, even if the
parent company is Canadian. These smaller offices can represent
different locations of the same business or different businesses
owned by a common parent company. It is the total number of
full-time U.S. employees that is relevant.
Canadian companies with fewer than 50 employees working in
U.S. locations won’t be required by law to provide coverage to their
U.S.-based employees. However, those employees may still need
to prove to the IRS that they have health insurance, so they may
demand insurance or larger salaries to enable them to purchase
their own insurance. In other words, to stay competitive, small
businesses may have to compensate in other ways.
Under the legislation, there are three categories of workers:
■■ Variable hour
It’s important to know which employees fall under each of these
categories, as it will impact the way the company’s compliance with
the law will be judged. Employees should be notified in writing at
By Sibyl Bogardus
Kudryashka / Shutterstock
HRPATODAY.CA ❚ FEBRUARY 2015 ❚ 53