(Updated June 28, 2012) - The U.S. Supreme Court has upheld most of the Affordable Care Act, including the “individual mandate” section requiring all Americans to buy health insurance by 2014 or face financial penalties. Although it may not seem that this could affect security operations, the law will have ramifications for all security professionals who either provide contract security services or who use such services.
The reason has to do with the situation as it now stands for officer healthcare coverage. Many security firms advertise that they offer major medical insurance plans to their officers. However, most of these plans require that the officers pay high premiums; as a result, officers don’t sign up for the coverage. Because no benefit is provided, there is no actual cost to the security provider.
Beginning on January 1, 2014, all employers with more than 50 employees will be required to provide affordable healthcare coverage to employees or to give each employee a $2,000 voucher per year so that the employee can purchase a plan through the federal Health Insurance Exchange. (The company will not be charged for the first 30 employees.)
If an employer chooses to offer healthcare coverage, the employee’s portion of the premium cannot exceed 9.5 percent of the employee’s income. For an officer making $10 an hour (approximately $20,800 a year), the cost of the healthcare premium may not exceed $1,976 annually or $164.67 per month.
To see how this would work out in the contract security industry, let’s assume that the fictional ABC Security Company has 100 full-time employees and, all of those employees choose to buy insurance through the federal exchange because the company does not provide insurance. ABC is now liable for a fee of $140,000 annually because it does not offer coverage.