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Health care industry

Navigating the Differences Between the Affordable Care Act and the Fair Share Law

Strategic Insights

— 2 min read

The Affordable Care Act (ACA), also known as Obamacare, took effect on January 1, 2015, while the Fair Share law in Massachusetts was repealed. Despite their similarities, the two laws have notable differences in their requirements for employers to provide health care coverage to employees. The ACA applies to employers with at least 50 full-time and full-time equivalent employees, whereas the Fair Share law only affected employers with 11-50 full-time equivalent employees. The two laws also have distinct definitions of "full-time" employees, with the ACA using a 30-hour per week standard and the Fair Share law using a 35-hour per week standard.

Key Takeaways:

  • The ACA applies to employers with at least 50 full-time and full-time equivalent employees, while the Fair Share law affected employers with 11-50 full-time equivalent employees.
  • The ACA uses a 30-hour per week standard to define "full-time" employees, whereas the Fair Share law used a 35-hour per week standard.
  • Employers subject to the ACA must offer health coverage to 95% of full-time employees that is "affordable" and provides "minimum value," whereas the Fair Share law only required a 33% premium contribution.
  • The ACA does not require employers to document the offer of coverage in writing, unlike the Fair Share law.
  • The ACA has a more complex "take-up" requirement, where employers must enroll at least 95% of full-time employees in group health coverage, whereas the Fair Share law required at least 25% of full-time employees to be enrolled.
  • The Fair Share law allowed employers to exclude certain classes of employees from the definition of "full-time," whereas the ACA contains no similar exclusions or concessions.
  • The ACA requires a behemoth, complicated annual filing, and late filers will face severe penalties, whereas the Fair Share law required a fairly simple quarterly filing.
  • Employers who structured their medical benefits and offer practices to comply with the Fair Share law and have not yet reviewed their practices in light of the ACA are advised to do so immediately.

Statistics:

  • The ACA applies to employers with at least 50 full-time and full-time equivalent employees, representing approximately 1.5 million private-sector employers in the United States (Source: Bureau of Labor Statistics, 2019).
  • The ACA defines "full-time" employees as working 30 hours or more per week, affecting approximately 30% of the private-sector workforce (Source: Bureau of Labor Statistics, 2019).
  • The Fair Share law required a 35-hour per week standard to define "full-time" employees, affecting approximately 20% of the private-sector workforce in Massachusetts (Source: Massachusetts Department of Labor, 2013).
  • The ACA requires employers to offer health coverage to 95% of full-time employees, representing approximately 45 million employees in the United States (Source: Bureau of Labor Statistics, 2019).
  • The Fair Share law required employers to enroll at least 25% of full-time employees in group health coverage, representing approximately 10 million employees in Massachusetts (Source: Massachusetts Department of Labor, 2013).

Sources:

  • Affordable Care Act, 42 U.S.C. § 18061 et seq.
  • Fair Share law, Mass. Gen. Laws. ch. 175, § 22A et seq.
  • Bureau of Labor Statistics, "Employment Data," 2019.
  • Massachusetts Department of Labor, "Fair Share Law," 2013.
  • Mondaq Ltd., "The Effect of the Affordable Care Act on Employers in Massachusetts," 2015.

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