The U.S. Supreme Court will hear oral arguments on the constitutionality of the Affordable Care Act later this month, and they plan to issue a ruling by June. The Supreme Court has allotted six hours for oral arguments in this case, which is unprecedented. At issue is whether the “individual mandate” section requiring all Americans to buy health insurance by 2014 or face financial penalties is an improper exercise of federal authority. Although it may not seem that this could affect security operations, if the law is upheld, it 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.
(To continue reading "How the Affordable Care Act Could Affect Contract Security Providers," from the online edition of our March 2012 issue, please click here)
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