July 1st, 2015 is almost here!
Are you prepared for the effects the affordable care act may have on your business? For our September Newsletter we highlighted this issue, however, we would like to go even more in depth to ensure businesses are aware of the impacts; and what creative solutions are available through the Applied Staffing Companies.
The Facts:
January 1, 2014
ALL Americans required to be enrolled in healthcare coverage.
If no coverage a penalty will be assessed when filing 2014 taxes. Penalty increases each year through 2016.
Employers required to amend healthcare coverage practices. Including:
Limit benefit waiting period to no more than 90 days
Distribute to participants any premium medical loss ratio rebates
Provide reporting for Transitional Reinsurance Fee [due 1-1-2015]
Report cost of insurance for each employee on 2014 W-2
January 1, 2015
Adjusted Community Rating [ACR] goes into effect. All SMALL EMPLOYERS will be rated by their geographic zone [4 in Nevada], family/single plan, age and tobacco use. Overall health of the group is no longer a factor in determining rate.
Definition of employer size will be:
Less than 50 Full Time Employees is a small employer for purposes of purchasing healthcare coverage.
More than 51 Full Time Employees is a large employer for purposes of purchasing healthcare coverage.
99 or less Full Time Employees is a small employer for the purpose of paying the IRS assessment. In 2016 this drops to 49.
100 or more Full Time Employees is a large employer for the purpose of paying the IRS assessment. In 2016 this drops to 50.
Penalties:
Large employers that do not provide insurance or coverage that is not MEC or MVC qualified, and if one (1) employee receives a subsidy, will pay a penalty of $2,000 or $3,000 per employee.
Full Time Employee is determined by counting [The sum of all of these is your FTE count.]:
All employees who worked an average of 30+ hours per week
All employees who worked an average of 130+ hours per month
All Seasonal Employees
A Full Time Employee EQUIVALENT is determined by taking all part time hours worked and dividing it by 120 and rounding down.
Minimum Essential Coverage [MEC] or “skinny” plans are coverage of the 10 core health benefit categories.
Minimum Value Coverage [MVC] plans are those that cover at least 60% of the total allowed cost of the benefits provided under the plan.
Affordable Coverage is equal to or less than 9.5% of the employee Box 1 of the W-2 form.
***The ACA does not require the employer to contribute anything towards the coverage
Pay or Play means the employer has completed a study and determined to “pay” the penalties or “play” by bringing appropriate healthcare coverage to the workgroup.
Individual Mandate is the requirement for ALL American’s to be enrolled in some form of qualified healthcare coverage or pay a penalty when filing their tax return.
The Individual Mandate penalty begins with the 2014 tax year and a penalty 1% of gross income or up to $285 per family, and rises to 2.5% of gross income with a cap of $2,085 per family in 2016.
For even more information or to schedule a discussion, e-mail Tom Miller 24 hours a day at Tom.Miller@AppliedStaffing.com or call him between 7:30AM and 4:30PM Monday through Friday at (775)398-5126.