---
title: "PPACA Series: Ten new words you’ll need to know to understand healthcare reform"
description: A blog series to summarize the Patient Protection and Affordable Care Act (PPACA) so that you can better understand the new healthcare reform.
---

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# ShiftForce Blog - Shift Note and Shift Management Tips

# [PPACA Series: Ten new words you’ll need to know to understand healthcare reform](https://www.shiftforce.com/blog/ten-new-words-youll-need-to-know-to-understand-healthcare-reform)

** February 11, 2013 / by [Dennis Maggart](https://www.shiftforce.com/blog/author/dennis-maggart)

Now that the chaos of court challenges and the election have subsided it’s time to get down to the task of living with PPACA. Some industries will have little problem with complying with the new healthcare reform rules, while other businesses (like restaurants) will see a quantum shift in how they run their operation. Those that adapt the quickest will be the winners.

I remember the first task my high school science teacher gave us was to learn Latin, why Latin because it was the language of science. Well PPACA has created a new vocabulary for all of us so let’s start the learning.

- **Exchange**- This is the on-line marketplace where individuals can shop for medical coverage from a wide range of carriers. Think of it as Expedia for medical coverage. The Exchange is only for individuals.
- **SHOP**- This is just like the Exchange only it is for small employers. We are being told rates will be essentially the same as the average rate currently supplied by the carriers (sorry).
- **Premium Subsidy**- In order to help the working poor that make too much to qualify for Medicaid, PPACA has established a subsidy program to help legal residents who make less than 400% of the Federal Poverty Level. The subsidy is graded and covers most of the premium at the lower end and very little of the premium as you approach the 400% income level. Employees that have non-discriminatory, credible and affordable coverage offered by their employer are not eligible for a subsidy.
- **Full-Time Employee**- Trick question, we used to think that meant 40 hours a week, not anymore, anyone working 30 or more hours a week is considered full-time.
- **Employer Mandate** – Penalties may apply to employers who have over 50 full-time equivalent employees (remember to calculate FTE take the total hours worked by non-full-time employees and divide by 30). Penalties depend on whether or not you offer a plan but in general they are calculated as $2,000 times all employees or $3,000 times the ones that go to the Exchange and get a subsidy.
- **Employee Mandate** – Legal residents that do not have coverage through Medicaid, Medicare or an individual or group health plan will be subject to a tax penalty. The penalty is small in 2014 but increases each year till 2016 when it reaches approximately the value of a single plan.
- **Medal Level**- All medical plans offered through the Exchange will rates based on a value system based on the percentage of typical medical claim it pays: 60% equals Bronze; 70% equals Silver; 80% equals Gold, and 90% equals Platinum.
- **Variable Hour Employee** – Since an employer may hire a new employee and not be reasonably certain of the number of hours they may work, PPACA has created a new category for these employees, now called variable hour employees. This will become an important new term for all employers who have used “part-time” employees.
- **Measurement Period** – Employee’s who are hired as Variable Hour Employees are not required to be added to a plan until they have averaged 30 hours per week of work. Employers can choose a Measurement Period for all their employees of between 3-12 months. Using the 12 month period allows an employer to average out seasonal employees and have a de-facto 12 month probation period for these employees before benefits start.
- **Stability Period** – The only drawback to a long Measurement Period is that once an employee completes the Measurement Period and is deemed eligible for benefits then if they enroll then they must be allowed to stay on the plan for a Stability Period of at least 6 months or the Measurement Period whichever is greater.

---

"Want to learn more?  PPACA is a complex law and will affect each employer differently.  McInnes Group provides this blog series as a sample of various strategies that may work for some employers.  We encourage you to contact Dennis at [dennis@mcinnesgroup.com](mailto:dennis@mcinnesgroup.com) or at their website at [www.mcinnesgroup.com](http://www.mcinnesgroup.com/) to get specific advice to help you develop a customized strategy for compliance."

 Tags: [benefits](https://www.shiftforce.com/blog/topic/benefits), [healthcare](https://www.shiftforce.com/blog/topic/healthcare), [healthcare reform](https://www.shiftforce.com/blog/topic/healthcare-reform), [Patient Protection and Affordable Care Act](https://www.shiftforce.com/blog/topic/patient-protection-and-affordable-care-act), [PPACA](https://www.shiftforce.com/blog/topic/ppaca), [Tips & Ideas](https://www.shiftforce.com/blog/topic/tips-ideas)

![Dennis Maggart](https://www.shiftforce.com/hs-fs/hubfs/Blog%20Pictures/Dennis_HupSpot_Image.jpeg?width=100&height=100&name=Dennis_HupSpot_Image.jpeg)

#### Written by [Dennis Maggart](https://www.shiftforce.com/blog/author/dennis-maggart)

Dennis Maggart is a partner at McInnes Group, Inc., a benefit brokerage and consulting firm in Fairway, Kansas. He has over 33 years experience in the employee benefit industry focusing on group benefits for large employers and alternative funding arrangements. He has been worked with HHS and state exchange planning groups and has conducted numerous seminars/webinars for employer trade groups and associations on the impact of PPACA.

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- [manager onboarding (1)](https://www.shiftforce.com/blog/tag/manager-onboarding)
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- [new feature (1)](https://www.shiftforce.com/blog/tag/new-feature)
- [onboarding guide (1)](https://www.shiftforce.com/blog/tag/onboarding-guide)
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- [overtime (1)](https://www.shiftforce.com/blog/tag/overtime)
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- [pre-shift (1)](https://www.shiftforce.com/blog/tag/pre-shift)
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- [restaurant chains (1)](https://www.shiftforce.com/blog/tag/restaurant-chains)
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- [restaurant logbook (1)](https://www.shiftforce.com/blog/tag/restaurant-logbook)
- [restaurant pr (1)](https://www.shiftforce.com/blog/tag/restaurant-pr)
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- [restaurant trends (1)](https://www.shiftforce.com/blog/tag/restaurant-trends)
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- [menu profits (1)](https://www.shiftforce.com/blog/tag/menu-profits)
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- [overtime (1)](https://www.shiftforce.com/blog/tag/overtime)
- [pay or play penalties (1)](https://www.shiftforce.com/blog/tag/pay-or-play-penalties)
- [pre-shift (1)](https://www.shiftforce.com/blog/tag/pre-shift)
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- [spring cleaning (1)](https://www.shiftforce.com/blog/tag/spring-cleaning)
- [staff roster (1)](https://www.shiftforce.com/blog/tag/staff-roster)
- [support (1)](https://www.shiftforce.com/blog/tag/support-2)
- [t-shirt (1)](https://www.shiftforce.com/blog/tag/t-shirt)
- [talent management (1)](https://www.shiftforce.com/blog/tag/talent-management)
- [text alerts (1)](https://www.shiftforce.com/blog/tag/text-alerts)
- [text notifications (1)](https://www.shiftforce.com/blog/tag/text-notifications)
- [tradeshow (1)](https://www.shiftforce.com/blog/tag/tradeshow)

[See all](https://www.shiftforce.com/blog/ten-new-words-youll-need-to-know-to-understand-healthcare-reform#)

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