2015-12-04 / Community

Affordable Care Act costs assessed

By Duke Harrington Staff Writer

KENNEBUNK — Obamacare could cost Kennebunk taxpayers as much as $11,918 before the end of the current fiscal year, and will require adding $23,828 to the next municipal budget.

Formally known as the Affordable Care Act, the law compels employers to provide health insurance that meets a set list of minimum standards to any person who works more than 130 hours per month on average over the course of a year. That breaks down to 32.5 hours per week, on average.

According to Town Manager Barry Tibbetts, four Kennebunk employees not already offered health insurance are eligible for coverage under the ACA mandate. All are per diem workers in the town’s rescue department.

Kennebunk offers group health insurance through the Maine Municipal Employees Health Trust Fund, with an 82/18 split on premiums. According to Tibbetts, that means the taxpayers cover $5,957 for each employee, per year. If all four rescue workers took the coverage, the town would have to come up with $11,918. But Tibbetts said there does not appear to be a bill in the offing.

“The candidates who we’d offer this to appear to have other insurance, so I don’t think it’ll be an issue for us,” he said. “But if someone decides they don’t want their other insurance and they want to come with us, we need to offer it and we’ll need to find money to cover that.”

Still, regardless of whether any of the newly eligible employees take the town coverage, the full cost for however many may be deemed likely to hit the 130-hour threshold will have to be added into next year’s budget, just in case all jump in at some point. For four employees, that’s a $23,828 line item.

And, while that money could roll back into the general fund if unused, it is an appropriation that could impact the mil rate assigned to local taxpayers, unless selectmen find a similarly-sized place to cut elsewhere in the budget.

“The ACA is just the gift that keeps on taking,” Selectman Richard Morin said.

In fielding questions from selectmen, Tibbetts said Maine’s congressional delegation did work with the Maine Municipal Association to secure an exemption to the coverage requirement for volunteer firefighters.

“The problem is our per diem people don’t qualify as volunteers,” he said. “So, we have to offer something. If we don’t, we’re going to get penalized, and the penalty is going to be greater that what we are offering [in insurance].”

Selectman Christopher Cluff said he has been helping businesses across midcoast and southern Maine deal with the ACA in his capacity as vice-president of Paper Trails, a payroll and bookkeeping service.

“It’s just such a joyous experience,” he said, dryly.

Because Kennebunk has fewer than 100 full-time employees, including parttime and per diem employees who meet the130-hour per month threshold – it has 70, counting the newly eligible rescue workers, according to Human Resources Director Carolyn Hughes – the town is eligible for “transition assistance,” Cluff said. That means the town would not have to pay a penalty this year for not offering health insurance to eligible per diem staff.

“Still, we need to report it,” he said, suggesting this will not be the last time selectmen have to deal with ACA compliance.

“The problem with the Affordable Care Act is it’s very black and white and there’s absolutely no gray area. And the IRS issues new guidance contradicting itself every single day and nobody [there] knows the right answer.”

The Dec. 8 selectmen’s meeting will include a second reading and final vote on changes needed to Kennebunk’s personnel policy needed to make the per diem workers eligible for health insurance coverage.

In addition to basic coverage, Kennebunk also offers employees a health reimbursement arrangement administered by Group Dynamics Inc. Under that component, the town reimburses employees up to $1,500 per year for single coverage and $3,000 for family plans for out-of-pocket expenses incurred with its network of health-care providers. However, Tibbetts said offering the HRA plan to per diem workers is not an ACA requirement, “at this time.”

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