ObamaCare and Your Business: Everything You Need to Know
Even though the Obama Administration has pushed back the group insurance mandate until 2015, there are things employers need to do now to comply. Here are the important facts that you need to know about how this law will affect your business in the coming years for new and existing plans. The following information is for employees with 50 or more full-time equivalent employees. The new ObamaCare metal plans for businesses are similar to the individual plans known as the Bronze Plan, Silver Plan, Gold Plan, and Platinum Plan, but job-based insurance have a max deductible of 2k.
ObamaCare: Employers Who Must Offer Health Insurance in 2015
The Affordable Care Act (ACA) requires that employees with 50 or more full-time equivalent employees are required to offer health insurance or face a penalty -I’ll get into the penalties in a moment. It’s important to note that only actual full-time employees are offered health insurance, however employers must count every 2 part-time workers as one full-time equivalent employee ONLY for purposes of determining if employers are mandated to offer their full-time employees health plans.
For example if you have 115 employees, 100 are part-time and 15 are full-time, you are required to offer health insurance to the 15 full-time employees. Full-time is defined by the ACA as any employee who works an average of 30 hours or more per week.
ObamaCare Penalties for Not Offering Health Insurance
If the employer does not offer insurance to an employee (and their dependents**) there are two types of fines (technically called taxes by the Supreme Court):
- $2,000 per employee if the employer does not offer health insurance***
- $3,000 per employee if the employer offers health insurance but it is either not affordable or does not meet the ACA’s minimum requirements
**It is unclear at this time whether an employer will be fined for each dependent or only for employees.
***Applies after the first 30 employees. Example: If you have 100 full-time employees and do not offer health insurance, you would take 100-30=70. Then you multiply 70*2,000=$140,000 in penalties.
How Will They Find Out You are Not Providing Insurance to Qualified Employees
If your employee applies for a plan on the Exchange it would send a red flag up that you are not providing insurance (See ObamaCare IRS article to understand what is reported). Most penalties are assessed if one of your full-time employees receives an ObamaCare tax credit. The reason for this is that employees are not allowed to purchase from the Health Insurance Exchange if they qualify for insurance through a job-based program, this protects you receiving unnecessary penalties if your are offering ACA approved group insurance.
Employers Must Notify Their Employees of the Health Insurance Exchange
All employers must provide notification of coverage options available through the Health Insurance Marketplace, per the ACA. This is required regardless of whether you, as the employer, are mandated to offer job-based health insurance or if your employee is part or full-time. Employers must give this notification to their current employees no later than October 1, 2013, and each new employee must be given this notification at the time of hire after October 1, 2013 (time of hire in 2014 is considered within the first 14 days of an employee’s start date). You are not responsible to give this notice to a dependent of your employee.
The following are the two notices provided by the Department of Labor:
A Few More Things Employers Need to Do Under ACA
- Provide employees with a Summary of Benefits and Coverage for their plans
- Make a report for the IRS for all full-time employees coverage, regardless if it is an employer sponsored self-insured plan
- According to the 80/20 Rule, if an employer receives a rebate from a provider, and that rebate is considered an asset, it is at the employer’s discretion for “a reasonable and fair allocation of the rebate”
- Employers must provide employees, on their W-2, with a breakdown of the employer’s contribution and the employee’s contribution***
- Employer is responsible to add a Medicare Part A tax increase to those employees who make over $200,000 a year (there is no increase in your tax contribution)****
- Employers must provide health insurance to an employee within 90 days of their start date (including weekends and holidays)
***Employers do not need to provide this to retirees. “And the value of the employer’s excludable contribution to health coverage continues to be excludable from an employee’s income, and it is not taxable.”
****Speak with your tax consultant on how this works.
Employer Assistance
I know this seems like a lot to digest, but we are here to help. For any questions regarding your business and ObamaCare call 800-930-7956 or contact Medicoverage for assistance.
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