Page 48 - Summer 2014

There are a number of compelling reasons why gap plans are attractive. the ski area provides some limited employee’s own insurance, which is novel nature of these gap plans, it is form of health insurance coverage. bridged by these special types of insur- unclear whether they are tax-exempt, These gap plans are designed ance products. like traditional health benefits, which to supplement the seasonal employ- There are a number of compel- are not subject to income and FICA ee’s own health insurance. Gap plans ling reasons why these gap plans are taxes to the employee or the employer. are inexpensive to businesses because attractive. They are far more afford- (Historical note: This tax loophole for they only pick up the out-of-pocket able—both to the employer and the employer-provided health care arose expenses from the employee’s low-cost, employee—than full health insur- out of the wage freezes mandated by high-deductible plans and, in turn, ance coverage. The cost of a tradi- President Roosevelt during World War allow the seasonal employee more free- tional health plan for an employee II. With so many men fighting over- dom to purchase a far less costly plan and his or her dependents varies, cost- seas, businesses kept raising wages to on the Exchange, like a Bronze plan, ing employers typically somewhere attract the limited labor that was avail- which typically has high deductibles. between $6,000 and $10,000 a year. A able, so employers offered tax-free For approximately $100 per month gap plan, though, would likely cost an health insurance to get around govern- (which varies by state) a seasonal employer somewhere between $1,000 ment-mandated wage freezes.) employee can have supplemental cov- and $1,300 annually. ERISA specialists appear divided erage for deductibles under his or her Moreover, such plans do not need on whether gap plans would be tax own private plan and additional sup- to comply with onerous ACA require- exempt, so check with your plan pro- plements for surgery, cancer, accidents, ments in terms of comprehensiveness vider. If these plans are in fact con- or hospitalization. In other words, of coverage (i.e., minimum bene- sidered tax-exempt, it makes them these plans fill the “gaps” of a seasonal fits required), or affordability to the even more attractive to employers and employee. Indeed, these gap or bridge employees alike. plans are not subject to the ACA’s Lastly, these gap plans are espe- employer mandate rules, since these cially valuable with older seasonal PASSIONATE SKIERS & plans are supplements and, in this case, employees (like many patrollers and ski DESTINATION TRAVELERS TURN TO SKI AND SKIING designed for seasonal employees who instructors), a challenge most resorts FOR INSIDER RESORT are not considered full-time employees. are facing with an aging workforce. CONTENT, STUNNING Remember, with 12-month measure- Because older employees are prone to VISUALS, AND EXPERT ment periods, seasonal employees would more serious illnesses like cancer, diabe- HOW-TO SERVICE. be defined, over the course of the year, as tes, and heart disease—or face cumu- Speak To Them Where It Counts. part-time employees, and thus ineligible lative injuries that build up from past for coverage through the employer. seasons, like ACLs—such gap plans Furthermore, these plans are a sig- are a smart risk management tool. This nificant benefit to lower-paid seasonal would allow a company to segregate employees. Gap plans will not under- some of its high-risk employees from mine the employee’s ability to obtain the more traditional health insurance a premium subsidy from the govern- plan for year-round employees, pre- ment on the exchanges. Even with venting those high-risk, older employ- the benefit of a gap plan, a low-earn- ees from impacting health insurance ing employee will still qualify for all premiums with sizeable claims. of the subsidies available through the Believe it or not, the Affordable exchange, based on household income Care Act is now four years old; it was level. With a gap plan, then, an signed into law in March 9, 2010. employee can purchase the least expen- Even so, there are still additional regu- sive Bronze Plan with a high deduct- lations, guidance, and fresh ideas from ible, but essentially receive the benefits businesses and health care providers of a richer Gold or Platinum Plan. alike that will continue to evolve and skimag.com skiingmag.com However, given the unique and impact ski areas. N 46 | NSAA Journal | SUMMER 2014 w w w.nsaa. org NSAA Summer 2014 prepressed v6a.indd 46 7/3/14 4:21 PM