March 12, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
Companies in a variety of industries are highlighting risk factors in recent 10-K filings resulting from the delayed implementation of certain portions of the Patient Protection and Affordable Care Act (PPACA). Although most of the significant reforms related to the PPACA took effect at the beginning of 2014, certain provisions are scheduled to be phased in between 2015 and 2020.
Mandatory health insurance for large employers
Some of the updated 10-K risk factors relate to PPACA’s requirement that businesses with 50 or more employees provide health insurance or a pay a financial penalty. This requirement was initially scheduled to be implemented in 2014, but was recently pushed back to Jan. 1, 2015.
The updated filings reflect potential issues related to the new deadline. Supermarket chain Roundy’s Inc. recently warned investors of increased costs as a result of compliance with the rule:
- Given our generally low-wage workforce and our current health plan design, and assuming the law is implemented without significant changes, these mandates could materially increase our costs.
In addition to increased healthcare costs, the company warned that it may “become less attractive as an employer” and find it more difficult to “compete for qualified employees.”