What You Need to Know About Health Care for Your Business
A lot of our advertisers have been expressing their fears and uncertainties with regard to the new health care laws. We have gathered some important and concise information that should help clarify some of your concerns. Look for the link at the bottom of this article for a eBook that goes into further detail.
In 2010 what may be the most massive and sweeping legislation since the founding of our country was passed by Congress and signed into law by the President. The biggest part of it is called the Patient Protection and Affordable Care Act (PPACA) or the Affordable Care Act (ACA). It is often called Obamacare. Together the laws and implementing regulations are collectively called Healthcare Reform. That is what we will call it here and abbreviate it as HCR. The laws and regulations began being phased in during 2010. The process is expected to be completed in 2018.
Regardless of your personal thoughts on HCR it is here and it appears to be staying. It will affect every business in the United States. So what exactly is it and how will it affect YOUR business?
YOUR ROLE
As a business owner your role depends upon whether your business is large or small as defined by HCR. How do you determine that? There has been a lot of confusion on that point. A clarifying quote from the law appears below
“The term ‘‘large employer’’ means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 101 employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year.
SMALL EMPLOYER.—The term ‘‘small employer’’ means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 1 but not more than 100 employees on business days during the preceding calendar year and who employs at least 1 employee on the first day of the plan year.
STATE OPTION TO TREAT 50 EMPLOYEES AS SMALL.—In the case of plan years beginning before January 1, 2016, a State may elect to apply this sub section by substituting ‘‘51 employees’’ for ‘‘101 employees’’ in paragraph (1) and by substituting ‘’50 employees’’ for ‘‘100 employees’’ in paragraph (2).”
Hopefully, this quote makes clear that a business with 51 or more employees may be considered to be a Large employer under HCR.
YOUR RESPONSIBILITIES
You do NOT have to offer health insurance to employees that work less than 30 hours per week for the year.
You do NOT have to offer health insurance to employees who are hired as temporary and whose longevity of employment does not exceed 120 days. These are seasonal employees. Although this would seem to conflict with the maximum waiting period to be offered health insurance so long as the employees were hired as temporary workers there should be no conflict.
Waiting periods for employees to receive health care benefits cannot exceed 90 days.
YOUR RISKS
Most of us would prefer to have IRS employees continue with their Star Trek skits and line dancing lessons if it keeps them away from us. However, the IRS that has been tasked with enforcing the mandates and requirements of HCR. Tens of thousands of new IRS agents are being hired and trained. Better to avoid them.
Individual Mandate: Beginning January 1, 2014 most citizens of the U.S. are required to have health insurance or pay a fine (tax). The fine in 2014 is $95 or 1% of their gross income. For many people it may be less expensive to pay the fine than it would be to buy health insurance even with a federal premium subsidy. By 2016 the fine will be $695 or 2.5% of the individual’s gross income. If you offer affordable health insurance and your employees opt to not take it you are not subject to a fine even though they may be.
Employer Mandate: Under some circumstances employers may be subject to fines under HCR. Such fines are NOT tax deductible.
If you have 51 or more FTE’s, beginning January 1, 2014 or on the first day of your health insurance plan year starting during 2014 if your business does not offer affordable coverage and you have at least one full-time employee who receives a premium tax credit through the exchange you may be subject to a fine by the IRS. The fine would be $2,000 per full-time employee (30 or more hours), excluding the first 30 employees from the assessment. These fines are not tax deductible.
CONCLUSIONS
HCR has made planning challenging for business owners. The body of laws and regulations is still a work in progress. Some regulations have yet to be written. The thousands of regulations that have been written have not all been thoroughly analyzed and scrutinized for legality, means of compliance and risk of non compliance.
The year 2013 is nearly half over. 2014 comes closer every day. It’s time to have a course of action planned and to begin implementing it. The best way to plan a course of action is to get the best advisors available, consider what they say and make decisions that you feel are best for your business. The rewards of the decision and the risks of the decision belong to you and you alone. To use a sports analogy: Keep selling; that’s your offense. Keep complying: that’s your defense. Balance the two and win.
To read our free eBook on Health Care Reformclick here. It’s a short easy to read guide that gives you more detailed information and provides links to online resources.
At TheHomeMag, we are always looking for different ways to help you grow your business.
Happy Marketing!
–Kimberly Estrada, Publisher
Please call 949.478.5991 if you have any questions.