Are all agricultural businesses required to provide health insurance benefits to their employees?
Beginning in 2015, all businesses with more than 50 employees are required to provide health insurance coverage to their full-time (30 or more hours) employees. Employers who do not provide minimum essential coverage will face stiff penalties. Some employers may opt to take the penalty and not offer coverage.
Are all agricultural workers required to have health insurance?
Since 2014, most individuals have been required to have health insurance or face a tax penalty. Some individuals qualify for exemptions from this requirement. If you qualify for an exemption from the individual mandate, you will not have to obtain health insurance. The exemptions are:
- cannot afford coverage (coverage exceeds 8% of household income)
- household income below tax filing threshold
- economic hardship
- short coverage gap (less than 3 consecutive months)
- religious conscience
- member of an Indian tribe
- incarceration
- membership in a health care sharing ministry
- undocumented status
What about migrant seasonal workers?
Migrant seasonal workers may purchase coverage in the public health insurance exchange (PHIE). Eligibility to buy coverage in a PHIE is based on where you establish your permanent residence. Some health insurers will offer larger networks than other plans and may offer regional or national provider networks. Once Open Enrollment begins, check the plans available in your PHIE to see if there is a plan with provider coverage in the areas you work.
Are those working on an H-2A visa eligible for coverage in the PHIE?
Yes. All lawfully-present immigrants – including “nonimmigrants” like H-2A workers and those on student visas – may purchase insurance in the PHIE. Those who are low-income and otherwise eligible may also receive premium assistance and cost-sharing reductions to lower the cost of coverage in Marketplace plans.
What about undocumented workers? Are they required to have health insurance and apply for a subsidy?
No, they are not required to have health insurance. Undocumented immigrants are not eligible to buy coverage in the PHIE.
I’m an employer with agricultural workers. Am I required to provide health benefits to all of my workers?
If you are a large employer (you have more than 50 full-time equivalent employees), you may owe a penalty if you do not provide affordable and minimum essential coverage to all of your full-time employees. A full-time employee is one that averages more than 30 hours per week of work, although there are special rules for employees with variable hours.
My workers are seasonal employees. Do I count them in determining whether I am a large employer?
In general, an employer is considered a “large” employer for the purposes of the Affordable Care Act if the employer has more than 50 full-time-equivalent workers per year. Seasonal workers do count among your full-time employees unless your business qualifies for the seasonal worker exemption. The seasonal worker exemption applies if: a) you had more than 50 employees for fewer than 120 days, and b) during the 120 period you would have had fewer than 50 employees if you excluded your seasonal workers. The 120 days (or 4 months) do not need to be consecutive. For example, Farm A has 30 full-time, year round employees, and hires 25 workers to work 50 hours per week during a 2-month planting season in the winter, and then invites the same crew back for a 3-month harvest season in the fall. Farm A is a “large” employer because the Farm employs more than 50 full-time workers for more than 120 days. Farm B has 30 full-time, year round employees, and hires 25 workers to work 50 hours per week during a 3 month harvest only. This employer is a “small” employer because the number of full-time employees exceeded 50 during a period that is less than 120 days, and during that time the seasonal worker exemption applies, because after excluding the seasonal employees you had fewer than 50 full-time workers.
What are the penalties for employers if they do not provide health benefits to their seasonal workers?
If you are a large employer, starting in 2015, you will face a penalty if you do not offer affordable coverage that meets minimum value to all of your full-time employees and their dependent children. If, as an employer, you’re unsure whether or not your seasonal workers are full-time employees, you can use a special measurement period (a three- to twelve-month look back, at your discretion) to decide if your employees are in fact seasonal or full-time. During this measurement period, you don’t have to offer coverage, but if it turns out an employee did work full-time during that measurement period, you must treat that employee as full time during a subsequent “stability” period (which must be the longer of six months or the length of the measurement period that you chose) and offer that worker health benefits regardless of their actual hours worked during the stability period. Full-time means the employee worked on average 30 hours a week over the measurement period.
I run a small farm (less than 50 employees) with a mix of full-time and part-time workers. Am I required to offer coverage?
No, there is no requirement for small employers to offer health benefits to their workers.
I use a farm labor contractor to provide most of the workers for my farm. Is the contractor required to provide health benefits or am I?
The proposed IRS rules governing employer responsibilities utilize the common law standard to identify whether an individual is an “employee” of a business, for the purposes of assigning employer responsibility to provide coverage. In general, this means that an employer has the right to direct what an employee does and how it is done. Whether a farm labor contractor or a farm itself is responsible for providing coverage thus depends on which entity “directs what an employee does and how it is done.”
Allan Phillips is a Managing Principal at UBF and has over 25 years experience as a senior health care and pension consultant. He has worked with Fortune 50, 500 and mid-size companies to assess, develop, and implement integrated benefits programs for global organizations.